Aug 19, 2013

Customers declare increased spending due to Fan Club (customer survey)

Over 85% Of Customers Say They Tend To Visit F&B Outlets With Fan Clubs On Facebook. The Survey also finds that 56% say they would spend more at outlets with Fan Clubs and 67% say they are less likely to visit an outlet without one.

In the social media fueled rush to accumulate Facebook fans, many businesses and organizations had not invested much thought into what the value of a virtual fan of their Facebook page is and how it benefits their business.

High number of “Likes” or fans was promoted as an indication of an establishment’s popularity but this did not provide a direct link to how it can provide footfall or repeat business or how to use the collected consumer data.

Results of Taggo’s survey indicate that outlets are getting up to five times increase in repeat sales, seven times increase in fan acquisition rates and ten times increase in word of mouth coverage.

Key findings of Fan Clubs Survey 2013:

  • 86% expect to come back more often because of the Fan Club
  • 57% declare spending more than expected, this results in an average increase of $10 per F&B transaction
  • 67% would come back less often without the Fan Club
  • 96% of members say it is easy or very easy to join the Fan Club
  • 92% say the checkout process is fast or very fast
  • 87% prefer the Fan Club over a traditional membership card

Fan Clubs are immediately profitable. A $10 average increase per F&B transaction with a $4 average discount offered results in a $6 profit. This also provides future profits due to increased visit frequency and word of mouth impact on brand awareness among friends of customers.

At Rock and Ash, a local diner in Singapore's business district, close to 30% of revenue now comes from loyal customers, a big increase from 5% prior to the Rock and Ash Fan Club.

Unlike traditional programs, it’s easier to grow the member base because fan clubs are social by design, connecting directly to the restaurant’s existing page on Facebook, and creating opportunities for word of mouth engagement with friends of customers. “Before launching the fan club, we got 200 fans in six months,” said Mr Chua, owner of Rock and Ash. “One year after launching the club, we had close to 2,000 fans, most of them actual repeat customers.” Mr. Chua simply engages customers through Facebook on a daily basis, something most businesses already do. The difference is that Mr. Chua is engaging a large portion of his customer base, not simply a small minority that have become fans.

“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.”

A Facebook Fan Club is a new generation loyalty program designed to increase sales from repeat customers, much like traditional discount card programs but with built-in social media benefits.

“It’s very easy to post photos and I can easily do it via my smartphone,” said Mr Chua. “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.”

Mr Chua considered other forms of social marketing but decided against it. “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,” said Mr Chua. “I expect that sales would be dramatically lower if not for our fan club.”

Banks and payment brands get merchant funded deals that are crucial to driving card usage. Merchants are reporting a three to four times increase in debit card usage after launching fan clubs sponsored by Singapore’s national debit card brand, NETS.

Taggo’s patented technology turns any existing Facebook fan page into a loyalty program Fan Club, eliminating most of the costs of operating traditional loyalty programs. The company’s unique business model consists of enrolling banks and payment brands as sponsors, charging nothing to merchants.

In Singapore, Taggo is seeing a 100% month-on-month growth in new outlets signing up for its service.

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