Today’s Guest Post courtesy of Rod Phillips – buyer for Liquor Plus in Victoria, BC.
Since July 2009, the day I started playing around with Twitter at the behest of Doug Brown at Copeland Communications, our business has grown by one store and now has revenues of over $25M. In that same period, our customer counts have increased by 25% and the average spend per customer has increased by 32%.
Those are the facts but they don’t tell the whole story…
In 2006 we commissioned a marketing study on the impact of actions used in traditional grocery retailing as applied to the Liquor industry.
In traditional marketing, price has the most impact on consumer behaviour. This is followed by things like location, parking, hours, selection, and shopping environment. When we received the results of the study we were very surprised to see that 85% of all liquor buying decisions were based on location.
Price ranked last.
Our path was clear. If we were going to be change people’s liquor shopping behaviour we needed to promote our locations, parking, hours and build a case for value.
Traditional vs. Social Media Marketing
Until the summer of 2010, growth came from using traditional advertising methods such as radio, print, and television. I say the summer of 2010 because that seems to be when we reached the tipping point for our social media efforts.
It had been a year since I started on Twitter and 6 months since we’d developed our Facebook Page but it was becoming increasingly difficult to tell if our traffic was coming from our social media efforts our from our printed flyers in the local paper.
So, in December of 2010 we did a little test to see which marketing efforts were having the most impact. We pitted our social media marketing platform – a combination of our new website, Facebook, Twitter and foursquare accounts vs. 48,000 full colour flyers distributed through the Times-Colonist newspaper to Victoria and Duncan as well as throughout all four of our stores.
The cost of our electronic efforts was $1528.99 while the cost of the flyer was $5128.62.
Customer Acquisition Cost – Social Media vs. Print
We saw 56,227 customers from Dec. 10-31 (the promotional period), of which 785 were new customers. Of the 785 new customers, we were able to determine that 465 came from our social media efforts.
We calculated that we spent $3.29 for each new customer obtained via social media whereas those obtained via traditional print cost an average of $16.03 to obtain. That’s almost 5 times as much to acquire new customers via print when compared with social media!
As 2011 starts we have decided to cut out flyers, radio, TV and print advertising and we’ve diverted most of our marketing budget to our social media marketing efforts.
In our specific case, we are confident in our decision to forego our investment in traditional print media (focusing on social media marketing instead) as a result of 18 months of authentic, consistent messaging on Twitter, Facebook, and the daily maintenance of our website.
These social media efforts are more likely to be successful if conducted by you or someone on your staff who is naturally social and communicative. These days, social media savvy consumers demand a two way conversation with their brands and you must be prepared to give the customers what they want.
A hallmark of any successful business is the ability to identify with its customers and vice versa. We are just being ourselves and our customers seem to identify with that.
Social media has also offered us the opportunity to discover more about who we are as a business and a brand while at the same time providing us an unparalleled opportunity to find out and who our customers are as well.
This has added more ‘capital’ to our business than any bank can provide.
What do you say
Have you embraced social media marketing in your business? Do you still use traditional marketing methods like print, radio, yellow pages? Let us know by leaving a comment below.