Dunkin' Donuts Notches 120% Conversion Using "Intent-Based Marketing"
Does a 120 percent conversion rate on a social media marketing campaign sound appealing? Yes, that's right: a conversion rate of more than 100 percent is exactly what First Cup LLC, a large Dunkin' Donuts franchisee in Arizona, realized from its "Free Medium Hot or Iced Coffee Campaign," which from March 26 to Nov. 10, 2013.
So how do you get a conversion rate of more than 100 percent? Chalk it up to the power of Twitter, mobile phones, and marketing automation software. During the 7-month promotion, First Cup responded to 1,827 relevant Twitter conversations, and 2,201 people took advantage of the free coffee offer.
When someone redeemed the free coffee offer, First Cup offered an additional incentive for sharing it (Dunkin' Donuts Cash). One Dunkin' fan shared the offer with 1,745 followers, and two of his followers re-tweeted it to another 1,150 people. In all, referrals accounted for an additional 1,485 customers for First Cup during the campaign - a pretty good ROI, by any standard.
The free coffee campaign not only brought new customers into Dunkin' stores, it exposed them to the brand's menu items. "A lot of people in the valley know Dunkin', but there still are a lot of people who haven't tried us, particularly our specialty beverages and sandwiches," said Alex Apodaca, COO of First Cup. "They didn't know we carried these items - they thought we were just coffee and donuts."
First Cup, founded in 2008, and one of three franchise groups then responsible for expanding the brand into Arizona, signed an agreement for 63 locations. In February 2011, First Cup received $5.8 million in financing from GE Capital Franchise Finance to reduce debt and provide capital for expansion. At the end of 2013, First Cup had opened 33 Dunkin locations.
So how did First Cup pull it off? By using SocialCompass, a social media marketing application from HipLogiq, to tap into Twitter's word-of-mouth marketing and grow its customer base in Phoenix - specifically, to find local, geographically targeted tweets about "want coffee" and "craving coffee," as well as a number of other keywords.
Says Apodaca, "SocialCompass is relational and provides a personal touch for customers that you can't use with traditional marketing or coupon mailers. It gave us real-time metrics, and we could react more nimbly to the market. That's exciting. What used to take us at least a week to create, approve, and produce, now we can do in an instant with SocialCompass."
This year, First Cup plans on expanding its use of SocialCompass to promote its menu choices, reach the Hispanic market, and target teens through 25-year-olds, where the chain competes with Starbucks.
"We knew that Dunkin' fanatics existed back East but didn't know they existed here in Phoenix," said Apodaca. "With SocialCompass, we not only found those fans locally at the exact time they wanted coffee, we offered them an instant reward and reaped additional benefits from them spreading the word to their followers on Twitter. It was incredible to see the results of a few Dunkin' fans connecting with their friends and the viral effect of our campaign."
"Dunkin's success with SocialCompass is a great example of how a brand can integrate social media into a marketing strategy and yield ROI," said Bernard Perrine, CEO and co-founder of HipLogiq. "Many brands focus on building friends or followers lists. Dunkin' has shown that you can find new customers as well and increase your exposure significantly with automation."
SocialCompass searches Twitter based on industry, keywords, and location and flags relevant tweets in real time, when a consumer tweets about needing a product or service. A business can then reach out directly to that consumer with an offer. Once the person downloads the offer, their contact information is entered into a database that follows up a couple of days later with a reward offer when they refer friends.
HipLogiq now also offers SocialCentiv, a web-based, do-it-yourself product tailored for smaller companies. SocialCentiv allows businesses to "listen" to real-time social media conversations, respond with offers, and use the automated platform to provide follow-up incentives to customers to share through social media and email. When a friend takes advantage of the offer, the customer receives an instant reward.
According to HipLogiq, conversion rates, based on an offer download, average 34 percent, although some industries, such as QSR and casual dining see rates 100 percent and higher. (Compare that to the traditional direct mail conversion rates of 1 to 3 percent.)
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