Facebook pageUnless your organization watches its Facebook stats carefully, you may not have realized Facebook has become increasingly less accommodating to brands and companies over the course of the platform’s recent updates.  Some notable business owners, like billionaire Dallas Maverick’s owner Mark Cuban, have even spoken out against Facebook’s latest changes.

For example, in late 2012 TechCrunch noticed that posts made by brand pages were only being displayed to a tiny fraction of a page’s following, and were being hidden from the rest.  Facebook has been restricting how many of a page’s followers see a given post, a statistic known as “Reach,” for several years now.  However TechCrunch found that in late 2012 Facebook made changes to the newsfeed that caused the reach for brands to drop as much as 40% compared to what it was earlier in the year.

Posts for the average Facebook brand page are now being seen by less than 10% of their audience!  For example, if you spent time, money and effort to build your Facebook following to 4,000 people, that means now each post you make is going to be seen by less than 400 of them.

Facebook has a solution for this though…you can pay them money and then they will show your post to more people.  That doesn’t quite seem ethical though, does it?  First you spend money to build your following on Facebook, and then you spend even more money to reach the following you worked so hard to build?

It’s no wonder so many business owners, like Cuban, are upset and considering leaving the platform.  So, is it time for you to close your Facebook page?  Here are three important things to consider:

1. Does your business model allow for recurring purchases?  There is a rule in marketing and sales that says it’s always cheaper to sell more to an existing customer than it is to find a new customer.  If your business allows for customers to make repeat purchases, like an online store or clothing company with new items every season, then the chances are better that your company will get value from a Facebook page.  However, if your customers only need to buy your product once, like a video game or a book, then you will always have to be finding new customers because your product doesn’t lend itself to repeat purchases.  That will make it harder for you to come out with a positive return on your Facebook investment if you are continually having to find new customers instead of simply re-selling old ones.

2. Do you have other contact information for your Facebook followers?  Depending on your company’s approach to Facebook, you may know that most of the people on your Facebook page got there because they were already following your company on its website, email list, or elsewhere.  If that’s the case, there shouldn’t be much negative consequence to closing your Facebook page, because you can still reach those customers another way.  However this situation is probably rare, so what can you do if you don’t have other ways to contact your existing Facebook fans?

Start by going to your page and looking at the cost for promoted posts.  Figure out how much money you’d wind up spending to reach your desired number of fans each month.  This will let you know how much money you can potentially save by moving people to another platform like Twitter, Tumblr, or an email list.

From there, come up with a budget for a contest, and an ad campaign to promote it to your Facebook following, that encourages people to switch to your new platform of choice.  This will allow you to justify the expense of the contest and the promotional campaign because you can show that after a certain amount of time, say six months, you will have saved enough money in Facebook expenses to pay for the contest.  And every month after that those savings will be contributing to higher profits for your company.

3. How are you measuring the value of your Facebook fans?  This is the most important question to ask yourself about whether or not you should keep your Facebook page.  Do you know the average revenue generated per fan?  Or how many new fans you need to acquire in order for one to make a purchase?  Unless you have some way of proving that having a Facebook page is making your company money, you’re running the risk of wasting a substantial amount of time and resources.  It’s time for you to start making sure your Facebook page is creating a positive return on investment.

For example, if you know that for every 10 new fans you acquire on average one makes a $20 purchase, then you can look at how much it costs in advertising and administrative costs in order to get 10 new fans.  It’s important to factor in the labor and admin costs because those are resources that could be doing something else potentially more effective at generating money for your business if they weren’t tied up running the Facebook page.

So, if it costs you less than $20 to acquire 10 new fans on Facebook, then it’s worth it to keep your page and pay money to grow your following.  However, even if you’ve determined that your page is generating positive ROI now, that doesn’t mean that it will continue to do so.  Especially if your business doesn’t allow for repeat customers, like the first question pointed out, make sure that you check in on your Facebook ROI regularly.

First, there’s no guarantee that Facebook won’t make changes in the future that will further reduce your ROI.  You may also find that as you sell more of your product it will become harder to sustain the same volume of sales.  You may reach a point where all of the people who are most likely to buy from you have already done so, and the only people left to target aren’t as interested.  This would cause your sales to drop and require you to look at a new strategy to address the changed marketplace.

The bottom line is if you’re going to have a Facebook page, make sure you’ve got a justification for it.  And “I’m doing it because all my competitors are doing it” doesn’t count.  Just because they like to waste money doesn’t mean you should.

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