What is the value of a "fan" or a "follower" to a brand?

I saw this question posted on Linkedin awhile back. "What's the value of a "fan" or a "follower" to a brand? Aren't these fans likely your loyal customers already, so how is capturing them on Twitter increasing revenue?" I answered the question back then and I think the same still holds true today and going forward. Since then there has been at least one study trying to determine an exact dollar amount to a fan. But I think that there are far too many factors and variables to determine that sort of thing across the board. So here is my answer to that question, updated a bit for clarity.

Let me answer that by asking these questions: What is the value of any of your business' loyal customers? What does it mean to your business to have repeat customers? How much are they worth to you over a month, a year, a lifetime? Put a value on that and you will have your answer.

Traditionally it has been much cheaper and easier to market to an existing customer than to find a new one. I suspect that is still true, but the internet and social media- Twitter and Facebook in particular- are quickly changing that. It is now much easier for your consumers to find information about and connect with businesses. Do you want them to connect with you, or with your competitors? It is also much easier for your competitors to find and connect with consumers. So again, do you want to connect with your customers, or do you want your competitors connecting with them? You can bet that if you are not staying in touch and building relationships with your customers, someone else is!

Customer loyalty is crucial for small businesses to maintain and grow their sales and profits. But consumers can be pretty fickle, especially in tough economic times. So you need to do all that is practical to earn and keep that loyalty.

One of the best ways to do this is through social media. It’s such a great tool for this because you can use it to learn more about your customers (prospects too) and to let them learn more about you. It makes it much easier to establish a personal connection with them.

People prefer to do business with people they know, like, and trust and social media is wonderful at facilitating interactions and exchanging communications between consumers and the people behind a business. What other medium allows one to conduct research, share information, advertise sales/promotions/events, generate publicity, drive traffic to a website, and communicate directly with customers and prospects (thus building relationships and establishing trust) as quickly, easily, and affordably as social media?

Those kinds of benefits are well worth the time, effort, and money spent developing fans and followers. If you can calculate the savings to your company that social media brings and add that to the business won through your social media efforts, you will have your answer to what the value of a fan or follower is.