Debby Icide had never used Twitter, but all it took was one tweet to boost sales at Gaia Essentials, her small boutique in Moss Beach, California, that sells homemade organic soaps and all-natural skin care products. The enticing missive, which increased traffic to Gaia Essentials's website 400 percent in a matter of hours? It was part of a game called a Twitter treasure hunt.

Icide's is one of several small businesses in the Bay Area that participated in the game, in which Twitter users are asked trivia questions about local companies for the chance to win prizes. Jason Sutherland, the founder of Peninsula Shops, a Web-based community portal, devised the game as a way to promote local businesses. Every morning for a month, Peninsula Shops tweeted a trivia question about a company. In Icide's case, Twitter users were challenged to name the third ingredient in Gaia's Cacao Tangerine Soap for a chance to win a $25 gift certificate. To find the answer, visitors flocked to the store's website, and many stuck around to do some shopping.

A former Web designer who grew up in the Bay Area, Sutherland founded Peninsula Shops last year to be something of a "chamber of commerce on steroids," he says. Businesses pay Sutherland a fee -- $180 for an annual membership or $20 a month -- and Peninsula Shops markets them on Facebook, Twitter, and its website. The idea is to help small-business owners who either don't have the time or the technical know-how to promote themselves online. One of the store owners Sutherland signed up didn't even have a website or a company e-mail address. "The question is, How do you stay relevant?" Sutherland says. "At this point, it's important for every business to have some sort of digital presence."

Since last year, Peninsula Shops has signed up about 80 businesses, many of which, facing competition from big-box retailers and feeling the effects of the recession, desperately needed a new tactic to get customers in the door. That's what prompted Martha Merz, owner of Martha's Pastries, to join. Merz's bakery has been in operation for 21 years, but sales have slowed in recent years. "The whole environment has changed," she says. "We used to be busy early in the morning; now we're not. My guess is that it's because of unemployment. We're missing people who used to swing in before work." Before joining Peninsula Shops, she hadn't spent anything on advertising. "I'm not a tech-y person; I don't even use a computer," Merz admits. "And I've always thought advertising is too expensive, especially if you don't know what you're getting from it."

But with the Twitter treasure hunt, she quickly saw results. Whether drawn by the spirit of competition or the promise of free stuff, participants seemed to go out of their way to answer the questions. To win a $10 gift certificate, Twitter users had to identify which business was located at 325 Sharon Park Drive in Menlo Park, the address for Martha's Pastries. Of those who answered correctly, one winner was randomly chosen. Although the answer was easily tracked down with a bit of Googling, Merz also saw an increase in foot traffic that month; quarterly sales rose 7 percent. "What's special about Peninsula's approach is that it has created a level of brand engagement, which is rare," says Lon Safko, CEO of Innovative Thinking, a social media consulting company. "The treasure hunters who answered the clues were participating frequently." Certain giveaways in the Twitter treasure hunt garnered response rates of up to 26 percent, says Sutherland. By comparison, click-through rates for e-mail marketing campaigns usually hover around 5 percent. Plus, those who participate in the Twitter treasure hunt now receive frequent updates on Twitter and Facebook about deals and promotions from local small businesses.

Later this year, Sutherland plans to launch a campaign using Twitter's location-based features to automatically send special offers to Twitter users when they are near Peninsula Shops's members. For instance, when a Twitter follower gets within, say, 100 yards of Martha's Pastries, he or she might receive a tweet or text message saying something like: "Looks like you're in the neighborhood. Stop by Martha's Pastries and get a free coffee with the purchase of any baked good." Until then, Sutherland will continue to offer this sort of reminder manually. After someone tweeted about visiting the Barnes & Noble in Redwood City, California, Sutherland responded, suggesting that the person check out Kepler's Books, a 55-year-old bookstore in Menlo Park.

Kepler's Books, now a member of Peninsula Shops, had abruptly closed its doors in 2005 because of competition from national chains and sites like Amazon.com. The community rallied, and Kepler's reopened later that year with a new business plan and more than $1 million invested by locals who didn't want to see the family-owned business perish. Customers want to support cool small businesses like Kepler's, says Sutherland; they just need a little nudge. "Sometimes people just need to be reminded that they're part of a community," he says.

To learn more about how Kepler's Books survived its near-death experience, read Bo Burlingham's three-part series at www.inc.com/keyword/may09.