Suddenly, the use of social media has become big business for small business.
That is, small businesses are using sites such as Facebook, Foursquare and Twitter to expand their market shares to increase sales as well as profits.
Reid Carr, president and CEO of 10-year-old downtown San Diego digital marketing firm Red Door Interactive, for example, says more and more area restaurants are using Foursquare to pull in customers who like to spend money at their favorite haunts.
For the uninitiated, Foursquare is a location-based social networking website for mobile devices that encourages users to “check in” at businesses, usually businesses where people congregate, such as restaurants.
In fact, Carr said “some of the more interesting success stories are happening in the restaurant space.”
He noted that Cucina Urbana located in Bankers Hill “uses Foursquare for its Saturday happy hour, so customers are kept apprised of it, and then they share it, which bring other customers out for it.”
Seeking Repeat Business
When users check in, they are encouraging friends of the users to participate, he said, “to let them know you are there.”
Foursquare encourages its users to compete for “badges,” such as becoming “mayor” of a particular venue. This game-like approach encourages repeat business for the restaurant, he added, as well as discounts and other incentives for users.
“Every time they come, they tell a lot of friends,” said Carr. “It’s validation that the friend likes the place.”
Carr also notes that the new gourmet food trucks roaming San Diego, as well as the rest of Southern California, use Twitter, as well as Foursquare, to let customers know where they will be stopping to better promote their business.
“They use Facebook to tell them whatever fresh items might be on the menu,” he said. “They also urge customers to take photos of the foods and push them to Facebook” for their friends to see.
Sometimes the social media involves the hardware as well as the software.
Carr notes that a bar in Del Mar has installed iPhone chargers at each station to encourage plugged-in patrons to “tweet out on Twitter that they are there,” which encourages friends to show up for impromptu get-togethers.
“The chargers are a physical interpretation of engaging when customers are there, using social media to bring people to their location,” said Carr. “If you are already there, and you have friends that are nearby, using social media encourages friends to participate, too.”
“Even if they don’t go immediately, they get constant reminders that someone is there, and patronizing the restaurant,” added Carr.
Charting a New Course
Privately held Garden Fresh Restaurant Corp., parent of the Souplantation chain of eateries, has been a client for a number of years, and as a result has become a pioneer in using social media to promote new business and build customer loyalty.
For example, customers can use the company’s Facebook page to offer up comments, and disgruntled patrons can send complaints via email, which allows company representatives to respond immediately.
“When you get to that level, it’s also customer service,” he said. “Not just promotion. You’re dealing with real problems. They want to show people that they solve problems in a public way, and that they have the protocols in place to show that they are listening and they are on top of it.”
Meanwhile, Jason Kulpa, founder and CEO of 3-year-old digital marketing firm Underground Elephant, says using social media allows his clients to pinpoint potential customers on a variety of data points.
For example, one client, a private university, can target potential students down to ethnicity, as well as income and marital status, such as single Caucasian recent college graduates or African-American mothers with two young children.
That’s important because only certain demographic slices tend to succeed at the school.
Underground Elephant mines the personal information taken from Facebook and other sites, and then uses the information for a finely targeted campaign.
Client Campaign Lists
Kulpa said his firm comes up with as many as 100,000 people a month to put on client campaign lists.
“We’ve been able to bridge that gap between qualified and interested,” said Kulpa. “More importantly, the data is self-reported, so we know that is accurate. And there is a lot more personal information they give to us.”
With the use of social media, the private university can analyze the data behind its most successful students, that is, those that graduate, and then use the results to find potential students who are most likely to succeed.
Even the smallest of businesses can develop social media strategies.
Stephanie Shkolnik, social media strategist at 14-year-old San Diego digital agency Digitaria Interactive Inc., said, “I think social media is critical today, as well as a huge opportunity for small businesses, especially local businesses, as we look at everything from engaging with local customers to monetizing opportunities.”
Shkolnik said a small retail business, such as a clothing store, is the perfect candidate for utilizing social media.
She said the store could appoint one of the clerks to handle social media, and that the clerk could perform such chores as writing entries twice a week for the store’s blog, or keeping up the store’s Facebook pages.
“The employee can ‘own’ all of the store’s social media presence, as well as their brand,” said Shkolnik.
“There are so many brands that are out there in digital talking to consumers,” she said. “Being able to identify that person, and then creating content is absolutely key” to success in social media.
Subtle Informational Tool
However, Shkolnik said businesses must avoid “shamelessly” promoting products and services blatantly.
Instead, she said retailers should use social media to provide information about the product or the service.
“If we look at the retail sector, we have to be careful to identify your customer, whether you’re targeting tweens, girls ages 10 to 13, or students in college or women over 40,” she said. “Then you create content around that.
“What kind of content can you serve them that provides value to them?” she asked. “You can speak about the product, and then integrate sales around the product.”
Shkolnik said her husband, Alex Feldman, has long operated a small eyewear store in San Francisco’s trendy Marina district, home to professional sports stars, Hollywood celebrities and national politicians, like Nancy Pelosi, who is the U.S. House minority party leader.
He was the first to use the Web to promote sales, and continues to use social media, such as Twitter and Facebook to pump sales.
“It’s been very effective for him,” said Shkolnik.
Because of the low cost but high impact, social media has become one of the major sources of marketing for an increasing number of smaller businesses.
“Right now social media is the primary space for small businesses that they turn to to drive sales,” said Carr. “It’s effectively free, aside from the time it takes to manage it, and what you choose to offer on it.
“It’s quick and easy,” he said. “And social media is not that hard for a small business to manage.”
Tom York is a contributing editor for the San Diego Business Journal.