July 18, 2013, 10:59 AM

For fast-growing Fab.com, there’s nothing like Facebook to win over customers

The social shopping site says the social network is key to its fast growth.

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When Fab.com launched in 2011, it based its fortunes on letting shoppers see what other shoppers were viewing and buying. So it made sense, the retailer says, to start its marketing and customer acquisition efforts on Facebook.

The strategy has worked exceedingly well, Fab says, as new customers acquired through the social network produce on average twice the revenue and profits, measured over an extended period as customer lifetime value, gained from customers not acquired through Facebook. “We’re gaining a higher lifetime value via Facebook than we are from anywhere else,” says Tom Beverley, Fab’s vice president of marketing, Europe.

Although operating as an e-commerce site for barely two years, Fab says it has a customer base of 14 million people in 27 countries. In the 2013 Internet Retailer Top 500 Guide, it’s No. 150.

When Fab.com launched as a members-only e-commerce site in June 2011, it kicked off its growth plans by working with Nanigans, a marketing firm that specializes in helping marketers plan to build the lifetime value of customers through social media. Nanigans assisted Fab in using Facebook tools including Custom Audiences and Lookalike Audiences to target with Facebook ads Facebook users that already had a relationship with Fab and those that didn’t.

The Custom Audiences tool enables marketers to interact with Facebook users that already have a relationship with a brand, such as through clicks of the Facebook Like button and responses to Facebook ads. The Lookalike Audiences tool lets marketers target Facebook users with consumer attributes similar to those of a marketer’s existing customers, but with whom a marketer doesn’t already have a relationship.

In addition, Fab added a “Login with Facebook” button on its site to encourage its members to participate on Facebook while shopping.

Although Fab didn’t discuss the particular campaigns it ran on Facebook, it noted several results of its overall efforts of using Facebook as a marketing and advertising channel:

● For consumers targeted with ads through Custom Audiences, Fab found they were ten times more likely to make a purchase; compared with consumers targeted through other types of marketing;

● For new customers acquired with the Lookalike Audiences tool, Fab has found them over the last two years to have a lifetime value 50% larger when compared to customers acquired through other forms of targeted marketing;

● Customers acquired overall through Facebook have produced a lifetime value twice as large as that of customers Fab has acquired though other marketing channels.

Fab didn’t go into detail on other marketing channels it uses, but says it expects Facebook to become ever more important as a marketing and acquisition channel. “We believe Facebook could become as important as traditional loyalty channels such as e-mail and direct mail,” Beverley says.

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