Companies that use Facebook and Facebook fan pages to market themselves to potential clients can increase sales, word-of-mouth marketing and client loyalty significantly among a subset of their customers, according to new research from Rice University's Jones Graduate School of Business. The study is featured in the March 2010 issue of the Harvard Business Review.



Research for the article, "How Effective is Facebook Marketing?", was directed by Utpal Dholakia, associate professor of management at Rice University's Jones Graduate School of Business, and Emily Durham, a Jones School alumna and founder of Restaurant Connections, a Houston-based restaurant consultancy.

Dholakia and Durham surveyed customers of Dessert Gallery (DG), a favorite Houston-based café chain. Prior to the study, Dessert Gallery did not have a Facebook presence.

The research, based on surveys of more than 1,700 respondents over a 3 month period, discovered that compared with typical Dessert Gallery customers, the company's Facebook fans:

· Spent 33 percent more at DG's stores.
· Had 14 percent higher emotional attachment to the DG brand.
· Had 41 percent greater psychological loyalty toward DG.
· Made 36 percent more visits to DG's stores each month.
· Spent 45 percent more of their eating-out dollars at DG.

According to Dholakia, the results of the study indicate that Facebook fan pages provide an effective and low-cost way of social media marketing.

Dholakia said Facebook marketing programs may be specially effective for iconic brands, which appear to attract a higher percentage of their customer base as Facebook fans.

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