Interesting post at American Express Open Forum titled “The Secret to Repeat Business: Grow Your Fanbase.”
After noting that small merchants are “soured by $500 rate cards and the 50 percent cut that flash sales sites take from merchants,” Paul Rosenfeld, CEO of Fanminder, lays out two alternative, more successful strategies:
1) Engage your customers through fan lists that inform and provide deals; and
2) Grow your fanbase.
He then outlines five (5) specific steps for growing your fanbase, (which I’ve modified slightly for our purposes here):
1) Ask your customers to join in person. There still is nothing like the personal touch.
2) Post signs where people look. Savvy Cellar has posted signs above the bar, on the back of the menu. We are thinking about adding signs in or outside the restroom (seriously people do text in there) and on our customer receipts. The latter idea has helped grow Savvy Cellar’s email list.
As co-owner of Savvy Cellar Wine Bar & Wine Shop, I get to experiment with promotional services that are designed to help local businesses. Over the course of several years we’ve tried (in no particular order): Google Adwords, Yahoo! Local, MerchantCircle, local newspapers, local magazines, email, Twitter, Facebook, FourSquare, Peninsula Shops, Movie Theater Advertising, Rumbafish and now Groupon.
An online coupon site, Groupon is organized by major metro markets in the U.S. Each day, the company features unique offers in the local market (restaurants, spas, entertainment, etc.) at a special “group” price. There is a minimum level set for each offer – meaning that a certain number of people have to sign up for the daily groupon in order for everyone to get it. This drives sharing among friends on social networks. If enough people opt to take the offer, then the offer is “on”. At the end of the day, everyone who took the offer is charged. Then Groupon takes its cut of 40-60 percent and pays the merchant the balance.
Here is my guest blog post on The Savvy Sommelier . . . .