In order to make it easy to understand how these two terms are totally different, I'd like to make a simple analogy to compare a business as a kid in the school. Thinking like this might help me to set out my plans for two different approaches depending on whether I am a new kid in the school or not. Let's discuss each strategy one at the time.
#1. In case that I'm a new kid at the new school = a brand new business
As a new kid, of course, I would be so nervous to introduce myself to other kids on the first day but no matter what I still have to do this to get to know who would be my friends. At first, I probably "reach" out as many kids as I can and introduce myself to them.
It's just like I'm creating a "brand awareness" of myself to other kids to know about me. At this moment, I probably don't care much how many kids actually want to be my friends but at least I put my name out there even they slightly know who I am. Obviously, it doesn't mean that everyone who knows me would come to talk to me but just some kids decide to introduce themselves to me and get to know each other more.
#2. In this case, I want to find my close (best) friends = an established business
Once I stay in the same school for awhile, now it's time to find my best friends and be a part of a group. This would be a harder part since I might need to do some studying on each group of kids in my class and see who they are, what their interests are, or even what they don't like about. Then I have to think which group(s) I really fit in and whether they will accept me to be their friends.
Now it's time to create some "engagements" among these kids to know more about me. I have to make my personalities shine, show them how cool I am, and why they want to be my friends. As you know, not all of your friends are your best friends. It takes a long time to build "trust, loyalty, and relationship" to have best friends whom I can freely communicate with. It's very important to keep a great relationship with my best friends no matter how hard to do but I still keep in touch with them regularly.
I hope that my analogy makes sense enough to explain what differences between "reach" and "engagement" are. If you're running a business, first of all, you should ask yourself what your goal of using Facebook is, what stage of your business is, and, more importantly, how you can make it better to reach your customers or get them to get involved with your Facebook pages!
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