Using social networking sites for sales lead generation
When Jim Amos announced the opening of Tasti D-Lite's new store in Nashville last July, he got an unexpected publicity boost. Country music star and Nashville resident Taylor Swift took it upon herself to promote the opening, sending an enthusiastic Twitter message to her 800,000 followers on the social networking service. "We're getting a Tasti D-Lite in Nashville," Swift wrote. "YES!!"
Amos, who became CEO of Tasti D-Lite in 2007 after leading a buyout of the company, was certainly pleased, but high-profile endorsements of his product have become almost the norm. Since its founding in New York City in 1987, Tasti D-Lite, which sells frozen dairy desserts that taste like ice cream but are lower in fat and calories, had grown with the help of plenty of celebrity endorsements and prominent placements in television shows like Sex and the City.
But as Amos looked to expand beyond New York City, where most of Tasti D-Lite's 60 stores are located, he decided to focus on winning endorsements of a more pedestrian kind: those made by regular customers on social networks. "The celebrities helped us with word of mouth before the technology was there," says Amos. "But now with Twitter and Facebook, regular customers are having conversations that can be used to build our brand." Amos imagined thousands of happy customers raving about his company's low-calorie desserts to their online pals.
The strategy makes sense. Both Twitter, with some 60 million monthly users, and Facebook, with more than 350 million, encourage people to spread the word about rock bands, television shows, and companies they love. (Users do this by "following" a person or company on Twitter or becoming a "fan" on Facebook.) The services have helped turn C-list celebrities into hot commodities, insurgent political campaigns into well-funded machines, and struggling companies into hip brands. But how do you get followers if you are not famous? And how can you persuade people to endorse a seemingly mundane company or product?
It's not easy. "Most people won't spontaneously want to become fans of your company," says Victoria Ransom, the CEO of Wildfire Interactive, a Palo Alto, California, company that specializes in helping businesses attract fans on Facebook and followers on Twitter. "You have to give customers a reason to engage with your brand." For anywhere from a few hundred dollars to thousands of dollars, Ransom's company will build you a Facebook application designed to attract new fans to your company's page. The applications typically try to entice users with a contest -- say, a chance to win a $50 gift certificate -- or a coupon. Once a customer clicks on the link, she is directed to a page that asks her to input her Facebook account information. When the customer completes the form, a link to the promotion typically will be published on her Facebook page, which can attract more fans.
Wildfire's approach worked for Edible Arrangements, a Wallingford, Connecticut, franchiser that sells fruit baskets in the United States, Europe, and the Middle East. In a ploy to boost holiday sales, the company announced in October that it would be giving away a coupon that could be redeemed for a $15 box of chocolate-dipped fruit to the first 100,000 people who became a fan of the company on Facebook. Within four days, Edible Arrangements had reached its goal. Many of the new fans went on to make a purchase. Sales were up more than 10 percent compared with the previous year. "The Facebook program exposed a lot of new customers to the company," says Stephen Thomas, the company's vice president of marketing. Edible Arrangements paid about $15,000 for the promotion, plus the cost of the free merchandise.
If you can't afford to give stuff away, you can always just ask customers to give you some Facebook love for free. That was the approach taken by Powell's Books, a bookstore in Portland, Oregon. Beginning in 2008, the company placed small graphics at the bottom of every page on its website and e-mail newsletters. These little advertisements entreated customers to "Find us on Facebook" and "Follow us on Twitter." For a month, Powell's even used the marquee in front of its store to ask for Facebook fans, which was surprisingly effective, says Megan Zabel, who manages the company's social media efforts.
Over the course of a year, the company went from roughly 3,000 fans on Facebook to 38,500 and from a few hundred followers on Twitter to more than 12,000. Although the campaign has not directly produced a large revenue increase, Zabel says the fans' and followers' online purchases have more than offset the cost of the campaign. In addition, having a large fan base creates the impression of a vibrant community that she thinks will help Powell's in the long run. "The more fans we have, the more people are proselytizing our brand," she says. "Word of mouth is one of the most powerful selling tools."
Tasti D-Lite's social networking strategy represents a new twist on the approach taken by Powell's. Rather than simply asking for followers, in January, the company began asking its customers to turn over their Twitter account information as part of Tasti D-Lite's loyalty program. Frequent shoppers get a point for every dollar they spend and an extra point if they post a message about their purchase on Twitter. Fifty points gets a customer a free medium cone or cup.
To get points for tweeting, a customer submits his Twitter username and password. Then, every time he buys something at a store, he swipes a loyalty card at the register. Tasti D-Lite's point-of-sale system automatically logs in to his Twitter account and sends a tweet informing his followers of the purchase. "I just earned 9 TastiRewards points at Tasti D-Lite New Rochelle," was the Twitter message posted on the account of Drew King after he and his wife treated themselves to dessert in mid-January. It included a link to a website that encouraged King's friends to sign up for the program.
Creating the world's first tweeting cash register didn't come cheap -- Tasti D-Lite spent more than $10,000 to modify its point-of-sale system -- but Amos expects the program to pay for itself as more customers sign up for it. "It's going to be very profitable," he says. "Word-of-mouth marketing has always been extremely important to this company, but Twitter has the capacity to increase word-of-mouth discussions exponentially. It's like the difference between snail mail and e-mail."