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Home » Customer Engagement, News, Social Analytics, Social Media News

Forget EPS, how did your portfolio do on Facebook last quarter?

Submitted by Bernhard Warner on April 22, 2010 – 3:11 pm5 Comments

Come earnings season, executives will turn to any rosy metric they can find in the financial statement to placate restless investors, particularly during an economic downturn like the one we’re in. All kinds of calculations have emerged over the years to get shareholders to fix on the promising bits of the business, not the slow-growth segments. And so, we’ve all become familiar with the emphasis on, say, same-store sales and with handy acronyms like ARPU for “average revenue per user” and EBITA, or, better yet, EBITDA (earnings before interest, taxes, depreciation and amortization).

But one metric we haven’t yet seen (just give it time, it will come) is the Twitter-followers-to-sales or Facebook-followers-to-sales ratios. Or, let’s just combine it altogether into one handy sum and call it “SMA” or the “social-media-appreciation” metric.

I’d like to start with Yum Brands, the international fast food conglomerate behind the Pizza Hut deep dish pizza and the triple-bypass-deluxe, a.k.a KFC’s “Double Down” sandwich.

Last week, Yum’s Ceo David Novak could have earned some mileage with the Street (okay, maybe just Main Street) by slipping in that while U.S. same-store sales fell by a disappointing 1 percent last quarter, the Twitter following for its top three brands of KFC, Taco Bell and Pizza Hut grew by a solid 26 percent. (Instead, he focused on the promising growth in China.)

Here’s how the three Yum brands fared over the past quarter, courtesy of Twitter Counter.

Each of the brands saw respectable double-digit percentage gains on Twitter in the past three months; Taco Bell grew the quickest of all, adding over 7,100 followers between January 22 and today, a 53% rise. KFC, thanks to all the attention heaped on its “Double Down” sandwich in recent weeks, saw a 19.5% jump. Looking at Facebook too shows the three brands have a combined 3.4 million fans there. Not bad.

Admittedly, this social media number crunching is still too raw to be basing a solid investment decision upon. But watch this space. Examining quarterly growth in terms of social network growth will give the canny investor or fund manager insight into customer loyalty โ€“ in other words, the ones who will stick by their favorite brands even when the economy turns sour.

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