Mar 8, 2013

Case study: Local Restaurant Gets 5x Increase In Repeat Business

When Rock and Ash opened its doors at Marina Square Link (Singapore) in July 2010, the owner, Mr. Chua Koon Teck, was already looking for a customer membership program. His initial loyalty program was the traditional method which requires customers to fill out membership forms and carry cards. Only a handful of customers signed up. Then Chua discovered Taggo’s Fan Club solution, which makes it easy to use the restaurant’s existing Facebook Page as a loyalty program. Customers join by “liking” Rock and Ash and simply give their mobile number to the cashier whenever they pay.

"Before launching our Fan Club it took six months to get 200 likes and I thought it would take a few more years to reach a thousand," said Mr. Chua Koon Teck, owner of Rock and Ash. "With the Fan Club, I passed the 1,000 mark in less than six months and 2,000 in less than a year. Now we have close to 3,000 fans, 80% of whom are registered Fan Club members."

With lots of customers now fans, daily updates on the Rock and Ash Facebook Page reach a large number of customers. This makes it very easy to inform customers of special promotions and activities at Rock and Ash. Thanks to these daily updates, customers are encouraged to come back sooner and more often.

“Our Facebook Page is like a newsletter on steroids," said Mr. Chua. "Updates appear on fans’ newsfeeds where they can comment, like and even share updates with their friends. It’s very easy to post photos and I can easily do it via my smartphone. My posts are related to meal times and tea breaks. I post food images from my menu to remind fans it is lunchtime. I post images of my specialty coffee and drinks in the afternoon to remind fans that they can visit my cafe during their breaks.”

One of Chua’s favourite features is that the Fan Club has dramatically increased repeat visits. A small increase in repeat visits can have a significant impact on profits. Previously estimated at 5% of sales, Chua now sees 30% of sales coming from repeat customers.

The Fan Club solution is free for merchants as it is sponsored by payment brands. Currently, the Rock and Ash Fan Club is sponsored by NETS, Singapore’s national debit card network, similar to Plus and Maestro in other countries.

“A traditional CRM solution that allows me to identify repeat customers would have cost me about SGD5,000 or more. I appreciate that I can have a similar solution free, sponsored by payment brands like NETS.”

Besides being able to identify fans, the act of checking-in customers at the point of sale produces a wall post on the customer’s Facebook Wall so that friends can see the Fan Club benefit at Rock and Ash. The wall post is automatically converted to a paid Sponsored Story ad which ensures that the message reaches a maximum number of friends.

In the month of February 2013 alone, over 10,000 friends of customers saw the wall post and Sponsored Story ads on Facebook. The restaurant received over 300,000 ad impressions, worth potentially hundreds of dollars, all free.

“Without the Fan Club, I would have to spend money on other types of marketing which are more expensive and don’t encourage repeat business. I expect that sales would be dramatically lower if not for our Fan Club.”

1 comment:

Gary Rice said...

Terrific example of the impact of social media for building growth and loyalty.