Social Media's Impact on Offline Sales

Businesses bridge the gap between the online and offline worlds with social media strategy.

Turning campaigns into in-store foot traffic and sales is the goal of any retailer. And new tools are helping them make that connection between the online and offline worlds. Social media in particular can combine word of mouth, speed of information, and the cool factor. And the low cost of many of these tools entice even small businesses that in the past haven't had a large online presence.

According to American Express OPEN's Fall Small Business Monitor, 40 percent of the 726 small businesses surveyed indicate that they use at least one social media platform; Facebook is the most popular platform (cited by 27 percent of respondent). By comparison, only 10 percent of business owners a year ago were using online social networking to market their businesses.

Merchants use social media to both acquire and retain customers for their offline properties. The study found that 34 percent actively use social media to stay connected with customers. What's more, consumers say they're more than willing to listen when it comes to special promotions and deals when using social media.

Roma Kumar, owner of Sonterra Laser Med Spa in San Antonio, TX, knows firsthand the value of connecting social media to offline activity. A technophile, Kumar has a website, a Twitter account, Facebook page, and listings on Citysearch to promote the spa's services, such as skin treatments, facials, laser hair removal, and massage therapy. In the past, however, her marketing focus consisted mostly of traditional advertising. "I spent thousands of dollars on magazine, radio, television, and newspaper ads," says Kumar. "It cost me $1,000 for a half-page ad in a newspaper and I got nine customers."

In March 2010 she worked with social media site Groupon to offer a special deal to San Antonio area Groupon members. They were offered a 70 percent discount on a facial treatment and were encouraged to share the deal with friends. If a minimum number of people signed up, the deal activated. Kumar says the one-time email produced 707 redemptions in one day. "It took us years to get to 707 patients," she says. "This changed my business overnight in one email." The influx of business led to the spa's expansion. Sonterra doubled its staff from three to six employees, opened a second floor, and bought more medical devices to meet new demand.

Kumar points to the interactive elements of the initiative as success factors. Customers could forward the deal to friends, post comments about the spa directly to the deal page, and redeem it on their mobile device or online.

Interested customers could also use a discussion board run by Groupon to chat with each other and ask questions of Kumar before accepting the offer. The day the initiative launched, Kumar worked the board answering about 40 questions in real time while other employees took questions over the phone. "I felt good, customers felt good, and it was very interactive."

She says that most of her new social customers are not just in it for the one-time deal. More than 67 percent of her Groupon customers have returned or booked future appointments, and one customer bought a $5,000 treatment. "People come back and refer friends," she says.

Scale has been the biggest challenge to the coordination of online and offline efforts. "Trying to accommodate everyone has been a challenge," Kumar says. She adds that customers who use Groupon tend to be very patient and accommodating, willing to wait months to redeem the offer. They know how the system works and that it may be overwhelming to the merchant, she says.

In preparation for the deal, Kumar made sure the staff was available to field calls and answer any questions. Even now, she says social customers are very valuable, and the staff is encouraged to go the extra mile for customers who come in redeeming social media offers. Coordination is critical for success.

Groupon deal for Sonterra Laser Med Spa

Kumar recommends that companies think about costs and scale before jumping into a social media marketing initiative. For small businesses and merchants with small margins, it may not be worth the effort if you can't deliver the promise. But, she adds, it's important to try to reach out on any network you can. "You want to make it an easy experience for your customer to get them in your doors."

Kumar is planning another Groupon deal later this month, and has high hopes for social media marketing. "I stopped spending money on other media."

Say no to social media campaigns

Becky Carroll, social media correspondent for NBC San Diego and founder of social media consultancy Petra Consulting, says that social media efforts need to be more than just campaign tools to drive one-off traffic. "It's great to get them in the door, but you have to think about how you retain customers," she says. "Building up Twitter or Facebook followers isn't a relationship." She says companies need to think about long-term strategy, using social media as a relationship tool, not one-and-done campaigns.

Geolocation social sites like Foursquare hold much promise for offline integration and ongoing customer engagement, Carroll says. The "mayor" model encourages people to come back and compete for the most visits. A restaurant in San Diego offers free drinks to anyone who checks in three times, for example. "It drives repeat business." She also recommends that frontline employees identify mayors or other active social customers when they come in their store. Put a picture of a mayor at the register, so employees can recognize him or her and provide a special greeting, she says.

Geolocation can also be used in interactive games that integrate online and offline activities., a Minneapolis-based apartment search site, works with social media firm Chief Ingredient to offer a sweepstake to renters who look at properties. When they visit apartments, they collect codes that can be submitted into the sweepstakes to win prizes.

For companies using social media coupons and discounts, there is the danger of cannibalizing the customer base. Carroll advises companies to think about who they're reaching before launching a program. If the potential redeemers would come into the store without the discount, it might not be worth it.

In general, Carroll sees a large gap between online and offline customer efforts. In small businesses, the integration is easier because the staff is small, but as companies get larger, their online and offline marketing becomes more siloed. And in many cases, third party agencies handle social media. "Social media isn't tied together because it's not thought of strategically," she says. "The words social media and strategy are not usually used in the same sentence."

Companies should brainstorm among online employees, offline employees, and customers about ideas for social media endeavors. "The first thing to do is to listen to find out if there are conversations about your business happening online," she says. "If there's conversation, there's opportunity."

Micah Johnson, CEO of Chief Ingredient, agrees. "Social media is the buzz, but it's so connected into everything offline," he says. "It only makes sense not to silo it."

Chelsea Piers connects online and offline efforts

At New York's Chelsea Piers sports and entertainment complex, Senior Vice President of Marketing & Sponsorship Dana Thayer uses a mix of online and offline marketing activities as part of a holistic marketing strategy. The company uses traditional print ads in newspapers and magazines, billboards and other display advertising, and social media.

"Each of our sports venues has a Facebook page, we have a complex-wide Twitter account, we're active on Yelp (and respond to all reviews), we have a YouTube channel, we offer discounts for checking in on Foursquare, and we consistently monitor our brand on all of those platforms," Thayer says. She has also run 13 Groupon offers, netting 14,000 redemptions.

As with Sonterra spa, coordination across channels is crucial. Thayer says the front desk staff needs to understand the terms of the social media deal when customers come in to redeem the offer.

According to Thayer, the key is to think of the entire customer experience and be able to deliver on the promise you send to customers and prospects. "Be sure you have the capacity to welcome all buyers," she says. "Don't plan an offer you cannot fulfill.Also, be flexible during the redemption process. At the end of the day, we want to ensure a positive customer experience, which in turn generates additional business and positive word of mouth."