First, it was Web sites and email marketing. Now, it’s all about mobile phones, smart coupons that know your location and sites and services that hook straight into local communities. Restaurants aren’t just places to grab some grub anymore. They are active participants in the social conversation with legions of tech-savvy customers.
Location-based social networks like foursquare and Gowalla are all the rage right now. It’s Facebook meets Yelp with addictive gaming elements and a strong Twitter tie-in. Users check in at various locations, rack up points and collect badges or other game items. The power comes in sharing this location-hopping with friends and keeping track of where buddies are. Foursquare, in particular, has embraced working with local restaurants by letting businesses offer specials for foursquare players.
Joe Sorge, owner of Milwaukee restaurant and bar AJ Bombers, noticed that Twitter users were busy tweeting about checking in with foursquare at his restaurant. That was all the incentive he needed to check into foursquare himself. One Yelp-like aspect of foursquare is that users add tips, to-dos and comments about the places they visit. “I have been able to prompt our foursquare users with rewards like free desserts for adding tips and to-dos about their experience,” says Sorge. “People are talking about you anyway, so you should be doing your best to manage what they are talking about and participate in the conversation.”
AJ Bombers occasionally hosts swarm events that bring in big numbers of foursquare users to the restaurant all at once. The users come to collect special badges given out for large gatherings. “The gaming aspect of foursquare fosters business growth. People want to go to new places and check in to earn new badges,” says Sorge. Discounts and specials help to bring these customers back in on a regular basis.
Founded in 2009, AJ Bombers has skipped the usual advertising routes. “I have not spent a single dollar to advertise the restaurant. It has entirely been a social media campaign,” says Sorge. His biggest sales day so far came during a foursquare swarm event. “We grabbed ahold of this very early. The reward for us as an early adopter is that we’ve become this sort of social media clubhouse,” Sorge says.
Your phone knows exactly where you are. Mobile coupons harness GPS and location technology to stuff your virtual wallet with bargains wherever you may roam. Download an app to your smartphone, let it find your spot and then browse deals nearby. Restaurants have always been big on coupons, but these services up the ante in terms of convenience and cost.
Viga, an Italian eatery and caterer with three locations in Boston, is known for having long, but fast-moving lunch lines. That’s the sort of challenge any restaurant would like to have. Edward Wilson, co-owner of Viga, helps to keep those lines stocked with customers through his use of Peekaboo Mobile, a startup Boston mobile coupon service that has plans to expand across the nation.
Wilson has been using Peekaboo for several months, testing the waters with a $1 off a $6 purchase coupon. Everybody walks around with their BlackBerries or iPhones, so it just makes sense as a marketing tool. It’s very convenient. Six to seven people a day come in and show it on their cell phone,” he says. Peekaboo is free for businesses to use, a fact that Wilson found attractive when deciding to try out the mobile coupons. “We have not done any type of full blown advertising because we’re a mom and pop. We can’t do a 30 second TV advertisement. Peekaboo is easy, it doesn’t cost a thing and you can get your word out,” he says.
Paper coupons may not be going away anytime soon, but Wilson is happy to move on up to a new medium. “The problem with coupons is a lot of people really don’t read them. You pass out thousands of those things. It’s a waste of paper. I would rather go this route.
They don’t have to print anything out,” he says. Wilson’s future plans include exploring a daily special coupon and offering catering discounts.
Deal of the day
Broad spectrum deal-of-the-day sites like Woot.com have achieved big success. It only makes sense to bring it down to the local level with sites like Groupon and Living Social. Businesses sign up to offer deals with huge discounts. Users receive a daily email and decide whether to buy or not. Restaurants have gotten behind the concept as a way to reach a large mailing list and bring in new business.
On April 21, 2010, a $5 Groupon good for $15 worth of bread went live for Breadsmith, a European-style bakery franchisee in St. Louis. “My product is really good. If we can get people to sample it and try it, there is a good chance I will get them back as a regular customer,” says Duane Johnson, co-owner of Breadsmith. 3,487 Groupons were sold for the restaurant that day. That’s a lot of potential new customers netted from a one-day campaign.
Johnson has been looking for cost- effective ways to market. “There was no out of pocket expense, which was key,” he says. “This is a great way to use current and contemporary technology. It’s a great fit for my kind of advertising needs.” His restaurant name and details went out to 85,000 Groupon watchers in the St. Louis area. The site also allows users to share deals by email, Twitter and Facebook, adding a social element to the proceedings.
One month after the Groupon deal, 20 percent of the Groupons had been redeemed. Johnson estimates that 60 percent of the customers were new. “I was convinced it would be a way to reach new customers and drive traffic during my slower months,” he says.
Manufacturers get in the game
PepsiCo used the Restaurant Leadership Conference in April as a chance to pitch its new “location-based” service called Pepsi Loot, a sort of social media loyalty program.
The way it works is customers load the Pepsi Loot app on their smartphone. Then when they’re out and want a bite to eat, the app shows the restaurants and stores—Pop Spots—nearest them that serve Pepsi. The customer can earn points, “Loot,” whenever they visit a Pop Spot and cash them in for prizes.
Restaurants can also offer coupons through the application. After the service is in operation for a while, Pepsi plans to offer restaurants tips on what’s working best: what offers customers are responding to, what days of the week they are responding to them, etc.
“This has the ability to drive traffic at the point of decision,” said Margery Schelling, VP/CMO of Foodservice at PepsiCo.