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Stop Making Friends And Start Making Money

Written by Todd L. Michaud
August 26th, 2010

Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

Can you imagine your company not showing up in the Google search results for your own company name? If you keep “dipping your toes” in social media, you may be unlucky enough to find out exactly what it feels like. I am amazed by how many people cannot see the fundamental shift that is heading for the retail industry.

The first retailers who can crack the code of how to maximize their relationships with customers via social media will win. The rest will become irrelevant. If you don’t have a social CRM strategy in place, you are behind.

I can’t help but smile when I read polls about how many companies are experimenting with social media. Responses along the lines of, “We are trying different social media tactics but have not landed on a solid strategy,” tend to be the most popular answer. Can you imagine a CIO making the statement, “We are playing around with ERP to see if we can build a business case”? The world is moving to an open, sharing, social platform at a lightening pace. As a result, people behave differently today than they did yesterday. How have your sales and marketing strategies adapted to this change?

Let me give you an example of how some companies cannot see the forest through the trees. Currently, the hot topic with social media for restaurants is location-based applications such as Foursquare and Gowalla. These applications let people “check in” at a restaurant by pressing a button on their phones. That update is then posted to various social tools such as Facebook and Twitter and lets users’ friends know where they are. The thinking is that if your friends know you are enjoying a drink down the street at the pub, they may join you.

These same companies were also smart to add a “game” element to the application that rewards users for frequent check-ins. On Foursquare, for example, if you have the most check-ins at a location you become the “Mayor.” People have fun trying to capture and re-capture the position of Mayor at their favorite hangouts.

To capitalize on this trend, many restaurants and bars have started to offer specials for Foursquare users. Some restaurants offer perks for simply checking in, while others offer specials like free drinks or free appetizers for the Mayor. Early results are positive, with many restaurants seeing increased traffic as a result. (Although there doesn’t seem to be much incentive to publicly state how your social media program is a complete failure, let’s just assume that we’re not getting the “whole” story.)

Rewarding your most frequent customer is one thing. But I think great companies will figure out how to take that knowledge to the next level. What if you could create a comprehensive view of each customer that includes online, in-store and offline? It’s one thing to know that I am the Mayor, but it’s another thing to know my average frequency, spend per visit and lifetime value.


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3 Comments | Read Stop Making Friends And Start Making Money

  1. Vikas Goyal Says:

    Point well made Todd. Companies should quickly move to next level by implememting social crm and start creating new business model through social hubs.

  2. Fabien Tiburce Says:

    Crooks rejoice, you can now rob the “Mayor” of the local Firkin pub while he is at the bar! Now that’s progress! The privacy implications of that application run deep. Being impersonated and burglarized because of one’s careless social media exposure doesn’t just happen to other people. Companies beware: just because an app/platform lets (or encourages you to) share personal data, doesn’t mean you should put your users through this.

  3. Pete Reilly Says:

    The data location based services are collecting on bricks and mortar locations is so valuable – equivalent to web analytics – that brands will figure out a way to leverage them in a way that makes sense for the consumer and the brand. I believe that this will be through white label services integrated into the retailers mobile web/app offering.

    If I’m a brand, why do I want to advertise Foursquare’s brand? Why do I want them to collect data on my locations and customers simply to have them sell it to my competition? Why do I want to direct my users to an application like Foursquare that is going to attempt to lure me to the location down the street with a better deal?

    Mobile and location based services represent an amazing opportunity to engage and influence the consumer like never before. I believe once brands understand the data they are giving up and the ability to leverage their customers ‘fan base’, they will start to add this functionality to their own mobile presence in addition to leveraging these service.

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