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MURTEC Insights: Calculating the Benefits of Social Media Marketing

Social media has experienced explosive growth over the last few years. For example, Facebook has more than 500 million registered users, which equals one in every 13 people on Earth. Out of this, there are 200 million+ Facebook users in the United States, which means an excess of 70% of the Web audience in the United States is on Facebook. Other social media channels and platforms have also experienced similar growth and success. With the evolution of social platforms such as LinkedIn, Facebook, Twitter and YouTube, the restaurant industry faces tremendous opportunity for unprecedented communication and marketing access to the existing and potential customer base.
Social media has become a part of everyday life and has become a mainstream form of communication. This makes Social Media Marketing (SMM) of the upmost importance. SMM is the utilization of social networks, online communities, blogs or any other Internet form of media for marketing. There is an abundance of advantages when using SSM such as low cost investment, direct customer communication, brand communication and it acts like word-of-mouth promotion in that people tend to believe it more than commercial advertising. Given its global reach, the active engagement of users, and the ability to connect with these users, social media is a powerful marketing channel that cannot be ignored by marketers wanting to connect with their guests in the restaurant industry. 
At the recent MURTEC (Multi-Unit Restaurant Technology Conference), a grouping of industry executives, including IT professionals from Caribou Coffee Company, Ruby Tuesday, Sizzling Platter, Jason’s Deli, Boloco and Garden Fresh Restaurant Corp., discussed how to experience success in driving measurable results from social media programs.
Analyzing success of social efforts
A common theme when discussing social media metrics is that results are measurable, but are not as significant yet. One participant shared how social media engagement at Sea World was integrating both Facebook and Four Square as part of a strategy to engage guests which led to the discussion of key ways that social media programs are monitored.
Monitoring is conducted through campaigns and targeted offers. Forty-one percentof social media interactions in the restaurant industry are loyalty-based and thus linked to ROI. One of the most effective social media communication mediums to achieve effective ROI success is using SMS. Once a guest opts in for SMS engagement and communication, this medium has the greatest redemption rate for promotions and customer engagement.
Matching expectations and results to cost
The executives then focused on the challenges involved in social media strategies and engaging the customer. The participants all agreed that currently there is no low cost strategy and the ROI needs to be measured frequently. It is important that the ROI is captured and calculated through data analytics, as top management needs to know the ROI when they observe loyalty rates that the social media programs have induced. Some suggestions for the ROI measurement are summarized in the table below.
There are different levels of engagement for e-mail communication. There is a lot of variation in open rates depending on the subject line and how an offer is presented. The biggest difference occurs once an e-mail is opened and the guest has to click or go to another page to view the related content. This is the point where a number of executives concurred that they “lose” the guest and their active engagement.
Another aspect for restaurants to consider is the variation in redemption rates based on whether the guest needs to carry a paper coupon for a particular promotion or whether it can be accessed on smartphones. It appears that there is a higher utilization rate when the guest does not have to print a promotional discount voucher. In order to keep track of the success of each promotion, each offer needs to be serialized.
All of this also boils down to the important issue of how to decide on which technology modality to invest in social media. The biggest decision for companies is choosing when to take the first step. Once that step has been taken the social media team can try out different tactical strategies and see which one works.
Social Media Metrics
Activity Ratio – Events that are being initiated
Number of posts
Frequency of updates on post
Returns – Brand Loyalty and ROI
Number of leads
Conversion rate
Track through promotional codes
Size of network
Numbers of members that will re-share the information
Frequency of members who re-share
Positive and Negative
Overall, restaurant executives are challenged by social media metrics and the biggest issue is to measure effective linkage to a significant ROI. The social media arena is constantly changing the state of affairs in marketing communications and loyalty programs and thus restaurant operators’ approaches to the technology must be continuously evolving.
Natasa Christodoulidou is a faculty member in the Marketing Department at California State University. She is also a member of Hospitality Technology’s Research Advisory Board.

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