A few months ago, I shared with you the 5 basic rules of calculating the value of a Facebook fan (or like, tweet, share, follower, etc.). If you missed it, check it out here. This week, I bring you a little more on that topic.

Above  is a short video that touches on many of the same topics:

– The $ value of a fan (or follower, subscriber, etc.) is based on transactions, either from that individual or from someone whose transaction behavior they can be shown to have influenced.

– These transactions are usually reflected in one of three ways: Net new transactions (new/recently acquired customer), increased buy-rate/frequency (existing customer starts buying more often), and increased yield (existing customer starts spending more, on average, per transaction).

– The $ value of a fan is therefore variable.

– The value of a fan changes from fan to fan.

– The value of a fan changes from company to company (or brand to brand).

– The value of a fan often changes over time. (Insight: This change is what your social media activities are supposed to be influencing.)

– Social media activity that is expressly intended to be connected to actual ROI should, as a principal aim, focus on increasing the $ value of the brand’s fans, followers and subscribers – either by converting them into new transacting customers, increasing their yield and/or buy rate, and/or having the same effect on peers within their circle of influence.

The video also brings up the danger of cookie-cutter equations or “values” for fans and followers, and the danger of mistaking costs for value (media equivalency equations).

Production notes: The video was shot in London in July of 2011. I dug it out of the vault just for you guys. The background noise is a little high. Sorry.