Hey Facebook, Show Me the ROI

By Christina Volpe, Associate Editor | October 08, 2010

It's used by millions the world over, has huge potential to drive brand awareness and loyalty, and the overhead is relatively low. But there's just one problem, a pretty big one in fact, that has left many hospitality marketing and IT executives scratching their heads: how do we measure its success?
 
If you haven't figured it out yet, we are talking about social networking. While this may be one of the hottest emerging technologies in hospitality (according to Hospitality Technology's July/August reader survey, 45.1% of lodging and foodservice companies plan on investing in it in the next 6-12 months), the struggle to find a return on investment is great. In fact, results from a recent Colloquy/Direct Marketing Association (www.colloquy.com; www.the-dma.org) survey indicate that nearly two-thirds of U.S. marketers "do not know" how to measure their companies' social media success. Luckily however there are a few hospitality operators who have had some pretty significant breakthroughs.

Virtual gifts you can touch
In late June, Cold Stone Creamery (www.coldstonecreamery.com) became the latest third-party to get in on the virtual goods business with the launch of its eGift application. Developed through a partnership with First Data Corporation (www.firstdata.com), the eGift application allows customers to send a code for a tangible gift to any recipient's Facebook account or e-mail address that can then be redeemed in any of Cold Stone's 1,300 nation-wide locations.

A little over 18 months ago, Cold Stone's executive team hit the road on what can best be described as a nation-wide franchisee tour to get a better understanding of their economic standing. What they identified was this: franchisee profitability was going to be their number one focus for the next three-to-five years, and that the investment in social networking needed to play a big part. "We knew that the virtual goods industry is a big market upwards of 1.6 billion dollars, and those are just for images or pictures," says Suzanne Schultz, VP of marketing for Cold Stone Creamery. "We thought it was a win-win for us; for our brand certainly I feel that it is something that our fans are looking for, given the virtual gifts market and how big that is, and there isn't any outlay of cash or investments on the franchisee side. We just thought that this was something that we definitely couldn't pass up."
 
Cold Stone currently offers five different eGifts to choose from, all priced under $7, ranging from shakes to ice cream sundaes. "What's great about the eGift application is it's a virtual storefront and we can have as many or as few gifts as we want," says Schultz, who notes that the company plans on expanding the offering to all product lines once the program receives more traction. Within the first ten days of its launch, Cold Stone sold more than 800 eGifts, and the company hopes to sell between 1,000 and 1,200 gifts per week.
 
When brand identity and reservations collide
For many travelers, the hotel booking process may involve visiting more than one website before making a selection; this can include visiting TripAdvisor to read guest reviews, Flickr for amature hotel photos, or destination-specific guides for information about area events. Some in the industry argue that Facebook is quickly becoming a one-stop-shop for potential guests who are trying to "feel-out" a hotel before making a reservation because of its ability to do all of the above. However, up until recently the ability to book a room through Facebook was not an option.
 
"I think a lot of people are just sitting on Facebook all of the time, and they are chatting on Facebook, and I think the less pages that people have to go through to do something the better," says Jeremy Vandermejj, creative director for Toronto's The Gladstone Hotel (www.gladstonehotel.com). In June, the hotel began offering guests the ability to book hotel rooms directly through Facebook with Northwind-Maestro's (www.maestropms.com) ResWave booking engine. The application enables Gladstone's guests to select the arrival/departure date, number of people, and enter a promotional code on the hotel's Facebook page, which then re-directs them through the rest of the reservations process, including the selection of one of the hotel's 37 unique, artist-designed rooms.
 
"So as they [guests] are on our Gladstone Hotel page reading the last five or six posts and trying to get an idea of who we are, they can on a personal level really connect with our brand. For them to have to go from our site and then find our booking engine is another step that we don't need them to do," says Vandermejj. "I think the real thing is that people make decisions really quickly. If you can catch them making the decision sooner, then you are more likely to get the sale."
 
In early September, Vandermejj reported that the hotel had more than 3,000 bookings come through the Maestro booking engine on their website, with a little under 100 coming through their Facebook application.
 
Don't forget about loyalty
It isn't so uncommon today to see a loyalty program that allows customers to manage their accounts online, or for customers to acknowledge their favorite brands via their social networking activities. But how about a program that actually lets customers earn loyalty points through those social network connections? That's the question that Tasti D-Lite (www.tastidlite.com) asked itself while working on its TastiRewards loyalty program.
"We were launching the online portion of it [the loyalty program] where guests could check their points balance, and eventually we would grow that into a branded online community with some other functionality," says B.J. Emerson, social technology officer for Tasti D-Lite. "And then while we were in the midst of that, the idea came up to enable them to automatically share their experiences with their friends because we were already seeing them do this on a daily basis. You have people who are checking in on Foursquare and then they have that enabled to go to their Twitter account as well, or they are just taking pictures and they are sharing those, so the idea really came from the customers."
 
Those who do decide to opt into this feature of the TastiRewards program are rewarded with an additional point whenever their loyalty card is swiped at the point of sale. Once the card is swiped, a message is posted to their social networking site, or sites, of choice. The program is made possible by Tasti D-Lite's partnership with Mercury Payment Systems (www.mercurypay.com) and pcAmerica (www.pcamerica.com).
 
"We think it is going to scale pretty well because we have somewhere in the neighborhood of 12,000 loyalty customers at this point, and right now we have about 17 percent that are actually enabling these connections," says Emerson. "About 50 percent of the people who are opting in are going for Facebook. That's a big one obviously, and then Twitter and Foursquare. So as the base number grows of loyalty customers, more will go online; and the more they go online the more opt-ins for enabling these network connections."
 

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