Social & Fun - A Winning Combination

More retailers are getting their toes wet with social media. And that's turning out to be fun and save money.

The recession has not been easy on most retailers, and marketing budgets have been slashed. Not to fear - social media is inexpensive and contests that emphasize fun over the value of the prize are winning customer hearts and minds these days.

Whole Foods is the latest to get with the program. The upscale grocery held a contest to hit the 1 million Twitter followers mark. But unlike the Lottery, where higher cash prizes fuel a Lotto frenzy, in Twitterdom, small gestures have a big impact. So, Whole Foods offered a million grains of quinoa and $50 gift card to the millionth follower.

According to Mike Duff's story on BNET Retail, they offered up 10 more $50 gift cards — and 50 more pounds of quinoa – as rewards for Twitter pals who could came up with clever five-word summaries of their food philosophies. The additional awards will be parceled out through the end of the contest period, which is Friday, but the first of the “micro-philosophies” winning a gift cards was: “Can you pronounce those ingredients?” Others entries that the company highlighted include “Peanut butter goes with everything.” And, my personal favorite: “Just say yes to chocolate.”

No doubt, many of these followers are not and will not become die-hard loyal customers. But a good number are or will, and their care and feeding is worth far more than a few hundred dollars. Oh, and since the retailer gave away Whole Foods gift cards, the money they spent comes back to the cash register, hopefully as partial payment on a much larger grocery tab.

Earning Customer Loyalty By Serving Up Fun

For five years, Chik-Fil-A has been celebrating "Cow Appreciation Day," giving guests who come to the restaurant dressed in full cow regalia an entrée, choice of side and a drink for free. This year's celebration starts today (though the official holiday begins on July 14) and the promotion is expected to draw over 130,000 visitors to Chik-Fil-A.

While Emily Bryson York's story in Ad Age calls the promotion a "gimmick" and a "stunt," it is actually something more than that. It is one example of the fun side of the brand. The event has gained momentum since its inception, and operators expect to serve free meals to as many as 150 cow-clad customers in their stores today! They have even extended the event by hosting parties for groups to come in before Cow Appreciation Day and eat while working on their costumes.

The whole thing is very tongue in cheek, and designed to win smiles, and fans. It's more engaging than than just offering discounts, and fun for those who dress up as well as those who don't.

Chik-Fil-A's emphasis on grass-roots marketing and its focus on fun are having seriously positive effects on the bottom line: as of June, systemwide sales were up about 10% year to date, and same-store sales at malls and stand-alone locations were up 3%. That's a whole lot better than the industry as a whole, which is down almost across the board this year vs. last.

Just another example of how fun makes (dollars and) cents.

Brands that Build Consumer Confidence

An NPR story earlier this year talked about small ways people could regain their feeling of being in control of their own destinies amidst the bumps and bruises of this recession. “Washing your car yourself…buying a small amount of stock” were some of the suggestions.

Fast forward to stories about the Obama's vegetable garden and thousands doing the same thing either coincidentally or because of their example. According to a survey by the National Garden Association, 43 million US households plan to grow their own fruits, vegetables, and herbs this year, up 19% from last spring. These are boom times for Burpee seeds, Ball canning jars, and Scotts Miracle-Gro. The Wall Street Journal ran a story recently about booming sales for devices to help rooftop and balcony gardeners produce plentiful fruits and vegetables in containers. Savings on food costs are an obvious benefit of growing and canning your own. But there’s something else at work here.

By learning how, and caring for the seeds and plants that put food on the table, home gardeners gain a feeling of control, and have colorful reminders of their own competence: the bigger the tomatoes or the more flavorful or more plentiful the crop, the greater the ability. And capability ladders up to feelings of confidence - something we need more of these days, as rolling layoffs and the ongoing recession continue to spook markets and individuals.

Gardening has played role in building feelings of competence on a massive scale before. According to Wikipedia,

“Victory Gardens were vegetable, fruit and herb gardens planted at private residences in United States, United Kingdom, Canada and Germany during World War I and World War II to reduce the pressure on the public food supply brought on by the war effort. In addition to indirectly aiding the war effort these gardens were also considered a civil "morale booster" — in that gardeners could feel empowered by their contribution of labor and rewarded by the produce grown. Making victory gardens became a part of daily life on the home front.”

Businesses that can help consumers feel a greater sense of control and competence stand to win big – in sales and by building their confidence. I wrote about the boom in sewing classes and home sewing earlier this year, before seeing the morale booster angle to the story.

New concepts like Tech Shop may also fit the bill. TechShop is a 15,000+ square foot

"membership based workshop that provides members with any skill level access to tools and equipment, instruction, and a creative and supportive community of like minded people so you can build the things you have always wanted to make. TechShop is perfect for inventors, 'makers', hackers, tinkerers, artists, roboteers, families, entrepreneurs, youth groups, FIRST robotic teams, crackpots, arts and crafts enthusiasts, and anyone else who wants to be able to make things that they dream up but don't have the tools, space or skills."

From a single location in Menlo Park, Tech Shops have been added in Portland, OR, Austin, TX, and Durham, NC, and more are reportedly in the works.

The recession is eliminating jobs, draining our savings accounts and eroding our confidence. Learning a new skill could turn out to do more for our collective confidence than any politician's speech or rise in the Dow. Welding classes, anyone?

Engagement is the New Loyalty

Historically, loyalty has been the “get more” industry, offering customers a reward for purchases – more purchases generate more discounts, points or other rewards. All the effort has focused on motivating a purchase, and on the person making the purchase.

A recent Financial Times story is the latest in a series of wake-up calls for discount-driven, points-based loyalty programs and the retailers that promote them. The CMO Council study found that:

Big brands' best customers have been defecting in droves since the beginning of the US recession. By this year, more than half of a typical US brand's most loyal shoppers in 2007 had switched to rival products. A two-year analysis of 685 grocery and pharmacy-stocked brands, using data from 32m consumers’ supermarket loyalty cards, found that in 2008 the average brand lost a third of its formerly highly loyal customers.

If points are out, what’s in? To earn customer loyalty, smart brands are becoming engaging, immersive, interactive and fun. One example is a unique promotion by Hyatt featuring, 'random acts of kindness' like unexpectedly paying a customer's bar tab. The point is to maximize surprise by having no apparent program or pattern. This approach can do more to delight customers and build buzz and goodwill than another 100 points in any traditional loyalty program.

Fun also works for engaging employees. The VP of Brand Experience for a national retail chain we know tried something fun after attempts to get her store teams involved in a new promotion by offering them points and coupons fell flat. She offered to have the VP of Store Operations wash cars for the winning store team. The promotion took off by tapping into the team's sense of humor.

The message to CMO’s is clear: In the new world of frugality, where conspicuous consumption is "out," marketers need to move beyond consumption- based programs to engage and even entertain us.

Points are out. Bring on the fun!

Making Mobile Work for Marketers

While pundits debate mobile’s uses as an marketing medium, examples are all around us of brands experimenting with this new medium. New to the fray is General Growth Properties, a mall developer and owner of Water Tower Place in Chicago, Fashion Show at Tyson's Galleria outside Washington and South Street Seaport in New York. According to a recent story in Mobile Marketer Daily, the mall operator partnered with Mobisix to extend its email-based The Club program to include The Club Mobile, an alerts service that relies on SMS.

These are clearly early days for what’s being billed as the nation’s first national mall-based mobile advertising network. And it’s understandable that General Growth would follow its retail customers’ embrace of offer-driven loyalty. Here’s how the program currently works:

Consumers who sign up online with mobile number and other preference data at http://www.theclubmobile.com will receive discounts and offers via regularly scheduled text messages. Those who sign up stand a chance to win a $1,000 shopping spree.

The loyalty business is waking up to the fact that earning loyalty requires more than offering customers deals. At Loyalty EXPO earlier this month, there was lots of discussion about the shortcomings of across-the-board discount oriented programs and the need for a more nuanced approach.

Here are a three ideas for General Growth and others like them to harness the unique opportunity that mobile affords them to drive profitable business to their tenants and provide real value to end users:

1. School’s out, and moms are looking for low cost things to do with the kids. Mobile alerts about local mall activities like face painting, story telling, and other goings-on would be welcome news and smart uses of SMS for moms on the go.
   
   
2. People are looking for value, and stores are offering all kinds of discounts and deals on services like gift wrapping, not just merchandise. Marketing these service type deals in advance of a shopping trip may fall on deaf ears as they really become relevant once the shopper is at the mall. Mobile alerts about tenants offering free gift wrapping, or other services would be useful and again, don’t require any additional spend or discounts beyond what the retailer is already offering.
   
   
3. Shoppers at high-end properties like General Growth’s are tuned into good-works and brands with a social conscience. Malls are a great venue for supporting those good works. Whether it’s hosting a local area clean up that gets the locals involved or a pancake breakfast honoring the local fire department, the mall is a gathering place and natural community venue. General Growth could use other media to promote these events in advance and mobile to promote them the day they’re occurring to drive participation.

General Growth is in deep trouble. So are malls in general. As CB Whittemore suggests in her recent blogpost “Rethinking the Mall & Uncovering Retail Creativity” the next stage for retail is socializing the retail environment – and I would argue, that extends to the mall experience.

Increasingly, community is where we make it…and that includes the mall.

Loyalty’s Changing – What’s Next?

According to a recent story in DMNews,

“Retailers are looking to get more from their loyalty systems because people will collect membership cards and shop at whatever store is most convenient, so [these programs are] not really building loyalty.”

Offers, points, discounts and rewards can be motivating. Until they become ubiquitous. When they’re everywhere – which one can argue is the case today – they become ineffective at best, and potentially counterproductive.

So, what works in this new age of frugality and points/rewards-based program saturation? What are today’s consumers looking for – besides a great price?

Featured at the recent Loyalty EXPO in Hollywood, Florida, SpeedPass by ExxonMobil is one of the examples of a brand that understands this shift and is gaining traction with consumers. No one would say that filling the gas tank is “fun” and everyone who drives has to do it on a regular basis. ExxonMobil came up with a secure way to speed up the process so drivers could get back on the road and onto the rest of their day faster.

Consumers with a SpeedPass fob on their key chains can pay for gas or convenience store merchandise simply by waving the fob in front of the scanner. That saves time – no digging around for cash or a payment card, no need to enter a PIN or sign a receipt. And SpeedPass is more secure than cash or cards – no card information or personal details are stored on the fob, so there are no financial or privacy concerns if the fob is lost or stolen.

The program provides real value to consumers, and the data on utilization, average transaction size, and gasoline market share shift bears that out. In addition to these quantifiable benefits, the fact that SpeedPass only works at Exxon and Mobil casts a halo back on those brands, particularly with millennial consumers who are more tech-inclined and more impatient that the rest of us.

It’s back to the basics of what makes experiences compelling in the first place. Things like service, opportunities for personal interaction or to learn something new, an escape from the daily routine, help in solving a problem, or features and functions that save time – these are meaningful to consumers. And they create stickiness – they engage consumers in ways that are enduring.

Twitter-Powered Retail Business Models

A lot of people are on Twitter these days. Most are trying to figure it out, wondering whether and how to use it. For many, it’s a way to meet people online who share common interests. A friend of mine is thrilled with the contacts she has made with others in her field across the country and around the world and gushes “I never would have met these people if not for Twitter!”

But to me, the interesting news in Twitter-dom is the potential of the medium to enable new local business models and new formats. Thanks in part to Twitter, Meals on Wheels no longer just refers to home-delivered meal services to people in need. As reported in the Wall Street Journal last week, “New technology has been a game changer, allowing trucks to pick and move to where the customers are on short notice."

Here are three concrete examples that illustrate a range of new ways Twitter is helping locavores find and eat great food.

#1 - TAKE OUT WITH NO SET MENU:
With no retail storefront, no waiters, no tables or silverware, dishes, or hardly any overhead - KitchenetteSF serves fresh takeout-only lunches Monday through Friday from the garage door of their warehouse in the Dogpatch neighborhood of SF.

Their chefs have worked at some of the best kitchens in the Bay Area: Foreign Cinema, Chez Panisse, Incanto, Eccolo, Betelnut, Fog City Diner etc. Menus are posted on the kitchenettesf.com blog at the end of each day for the next day’s lunch.

“Whatever we find that is super fresh and delicious is what we’re serving. Everything will be organic, local, street food inspired, spontaneous, affordable, handmade from scratch, and delicious (we’re eating this for lunch too!)"

The easiest way to know what’s for lunch today is to follow KitchenetteSF’s tweets so the menu comes to you. And over 1,000 people are following the tweets of this self-proclaimed “spontaneous organic covert nourishment” innovator.

#2 - COMBO SIT DOWN-MOBILE:
Last month, Chez Spencer in SF added a mobile component to its bistro repertoire with Spencer on the Go!—according to Urban Daddy the first food truck to serve white tablecloth French fare. With 1,001 Twitter followers as of today (6/15/09), the converted taco truck serves customers in SoMA on weekend evenings, and will soon be a regular at the Ferry Building farmer’s market during the day on Tuesdays and Thursdays.

#3 - MOBILE ONLY:
Kogi BBQ is run out of a truck serving Korean-barbecued meat inside Mexican-style tacos in Los Angeles. The company operates the kitchen in superhip, late night hangout, The Alibi Room, but the truck is its direct to consumer business. KogiBBQ currently has over 31,000 followers on Twitter.

According to the Wall Street Journal, more truck operators are following Kogi’s example and have begun using Twitter to post messages on followers’ cell phones, alert customers of their whereabouts and even ask for tips on parking spaces. These things are not hard to do - they just take creativity and follow through.

Today, creators of movable feasts are using high tech to drive up close and personal local experiences. Could the Helms Bakery Truck, the Good Humor Man, and the Oscar Meyer Weiner Mobile find new life in a Twitter-powered world?