Can Facebook generate leads for a brick-and-mortar business?

For most brick-and-mortar businesses, Facebook didn’t present a good ROI until it went public and started getting serious about revenue generation through marketing.Facebook

Fortunately, now it has great potential for small, local businesses like yours!

As with all marketing you have to define the GOAL of the marketing and that boils down to whether each type of marketing is Interruption (billboards, radio, TV, YouTube) or Response (SEM, SEO).

Most social media including Twitter, LinkedIn, Instagram and Facebook is unique in that it can be both Interruption AND Response marketing.

When you buy Facebook ads to reach people who don’t already “like” your page, you are Interrupting them.
However, when you show content to people who have already “liked” your page, you are Responding to them.

See the difference?

You can go even further than that so you should prioritize the following potential goals for Facebook marketing:

  1. Generate leads
  2. Build relationships with existing customers
  3. Gather reviews
  4. Improve SEO

No matter how you prioritize the 4 items above, all marketing should have a measurable impact.

Once you’ve categorized ALL of your marketing mediums as either Interruption or Response you can start comparing the value and ROI between each.

With Facebook, your key metrics for measuring the Interruption marketing benefits are:

  • $ Invested/Like
  • Impressions (referred to as Reach in Facebook)
  • CPM (Cost/Thousand Impressions) of target demographic

Here’s where it gets interesting!

Radio, TV, magazines and even billboards have their version of Impressions (Reach). If you gather the points data from broadcast marketing, the circulation of your newspaper, or the traffic passing a billboard each day, you can compare that to your Facebook Reach.

Then if you convert your Reach to CPM, you can compare across all Interruption Marketing mediums.

For example you invest:

  • $2,000 in TV ads for the local news station. You run 3 ads each weekday morning for the month. The show is watched by 100,000 people in your area so your Reach is 100,000 and your CPM is $20.00.
  • $1,000 to boost your Facebook posts to your target demographic and have a cumulative reach of 60,000 impressions. Your CPM is $16.67.
  • $400 in Google Display Ads and receive 100,000 impressions. Your CPM is $4.00.


Only Your Target CPM Counts

If you’re advertising your spring dress sale during a UFC fight, you may have a great overall CPM however the CPM for the demographic most likely to buy your dresses, is probably a horrible investment.

Facebook users input their age, gender, location, relationship status, and things they “like” which means, demographic and psychographic targeting is better with Facebook than any other marketing medium.

In our example above, the $4.00 CPM for Google ads might sound like a great investment but if you’re selling products to senior citizens and your Google ads are being shown to millennials, the CPM of your Target Demographic might actually be $40.00.

Because of that, you should use the Cost/Thousand Impressions of your target demographic.

Frequency Matters

When comparing across mediums, CPM of your target audience is your most important metric however don’t forget about Frequency.

If you are running a radio ad multiple times every day for a month, a regular listener may hear your ad 20 times. However CPM only counts that as 1 Impression.

Since people often need to hear your message several times before they accurately associate your brand name with your products and services, mediums that deliver a frequency below 3 should be evaluated differently than those with a frequency of 4-8.

Once you get beyond 8 impressions, you should change your message (i.e. run different commercials).

ReesesWhen you eat that first Reese’s cup it’s quite delicious. But by the 10th one you’re starting to get pretty sick of chocolate and peanut butter.

In economics, this is called the diminishing rate of returns.

Your Interruption marketing ads are similar to a Reese’s cup. What’s a brilliant ad the first few times someone hears it becomes ineffective when repeated too often.

However, the first few times someone hears or sees your ad is often just as ineffective.
Which I think is why Reese’s cups come in packs of 2. One is just never enough!

Not all Impressions are Equal

Don’t forget that Social Media is also much more highly targeted once people like your page. In other words, the value of a “like” or a “follower” is unparalleled in other marketing.

Imagine if people watching your TV ad who are intrigued but not-yet-ready-to-buy, could easily “follow” your company to learn more? (This has been tested for TV but was largely dropped.)

When people “like” your page they are asking you to share information with them about your business.

However, if only 50 people like your page, the effort required to produce great content is not justified.

You should shoot for a base level of 500-600 page “likes” for a local, service business.

Once you have that base, you can start sharing great content with call-to-action posts spliced in between.

Those call-to-action posts are the lead generation aspect of Facebook and ultimately where you measure the Return-On-Investment of your Facebook marketing dollars.

If you have a great CPM, low Investment/Like, and awesome Reach to your target prospects, but you can’t convert any fans to leads, stop investing in Facebook.

This is true for every marketing medium.

In summary, if you categorize all of your marketing as either Interruption or Response, then determine your key metrics (CPM of Target Demographic for Interruption and Investment/Contact for Response), you can compare Facebook to the other marketing mediums you’ve been using for years.

In the markets where we’ve done this comparison, Facebook presents a great potential ROI for small businesses!

To simple, accountable metrics for all marketing,

P.S. If you’d like help creating a Facebook marketing strategy, drop us a message.



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