Case Study: Using LinkedIn, Twitter to Cultivate Local Relationships

Foiled Cupcakes isn’t like most dessert spots. The Chicago-based business doesn’t even have a traditional storefront. Instead, owner Mari Luangrath has created a delivery-only enterprise that primarily sells to other businesses in her local area. By tapping into networks on LinkedIn and Twitter and keeping a close watch on reviews posted on sites like Yelp, Luangrath has been able to cultivate relationships with potential customers and position her business as the go-to destination for companies in need of desserts for in-house events or client gifts. She estimates that 4 out of 10 businesses that her company initiates a conversation with through social media will end up becoming Foiled Cupcakes customers.

What are the challenges in marketing a business without a traditional storefront?
We kind of fell into social media as our main way of marketing. The biggest challenge we have is being able to wade through all the noise and really identify the key target people that we want to interact with. Over the past three years, social media has been the primary way that we get our business. But over the past three years it has become supersaturated and noisy; so having to identify the key people that we want to target and then figuring out a way to get in front of them or start a conversation with them—either on Twitter or inviting them to a LinkedIn group—is a lot more difficult now than it was three years ago, when those channels were still fairly new. It’s just becoming more of an advertising race to the top.

How do you identify the people you want to interact with online?
It’s research. We don’t buy any lists, and we don’t believe in cold calling. We have very targeted verticals that we go for. For example, let’s say we want to start a relationship with accounting firms. We will target specific accounting firms with 35 to 50 employees [in our area]. We will go ahead and figure out which ones those are, who is working there, and who is handling social media. It’s definitely more research than buying a list. But obviously the returns that we have on our marketing efforts are significantly higher. For a lot of companies, pay-per-click is a popular way to go and target attractive customers. We have never paid for a pay-per-click campaign because we’ve found that this way has a conversion ratio of basically 4 out of every 10 people we talk to end[ing] up becoming a customer of ours. We obviously spend our time on people who are going to really fit well within our business model and really appreciate the services that we offer.

Which networking sites are having the biggest impact on your business right now?
It’s Twitter and LinkedIn. Another thing that we’ve started to employ is networking through blogs. We’ll read the blogs that other [companies] are posting, and we’ll start developing relationships with them. Usually it’s through there that we connect with them on LinkedIn and invite them into a private group where they can discuss ideas on customer retention and relationship building because that’s what we specialize in. Using our products, we help [businesses] maintain birthday lists and [plan for] special meetings. If we can provide insightful [information], then all of a sudden we become a go-to place when people think, I need to find a gift for my client. LinkedIn has been huge because it’s more of a professional B2B space, but Twitter is absolutely the best for this business model we have. Facebook is a totally different challenge because we can’t go and talk to people without their permission. But on Twitter, we can join conversations.

How important are the reviews that customers post on sites like Yelp?
To any business, reviews are huge. I can’t remember the last time [I], as a consumer, went to a restaurant or hired a plumber without checking the reviews. I don’t think a negative review itself is a bad thing. I think it offers a diversity of opinion, and it shows exactly the kind of clientele a business is trying to serve. But at the same time, the way the business is handling the negative reviews and the way [it’s] treating customers is super critical. My experience as a consumer is that reviews are super important, and my experience as a business owner is that your consumer[s are] going to check them out. They’ll look us up online, and they’re going to see what’s been written.

What’s the proper response when a business gets a negative review? Should you ignore it or contact the customer directly?
We don’t have a storefront, so if somebody posts a negative review, then we for sure know who it is. We have a very multi-touch-point process, so we know exactly who the person is. If there is ever something that is even marginally negative, we’ll reach out to [the customer] privately. We’ll do it offline, and we’ll just say, “We saw your Yelp review. We wanted to know what the circumstances were, and if there’s anything we can do.” At no point will we say, “Can you go fix the review?” I don’t think that’s a classy way to do things. But we obviously want to address the issue and make sure the customer knows that we’re monitoring this. It works in two ways. One, it helps the customer know that we do care about [the] experience, and secondly it makes [someone] realize, I better watch what I say online about businesses. It’s sort of training the consumer to be more objective. I think it’s really easy to be subjective in online reviews, especially when it comes to food. We have people that say there is too much frosting or not enough frosting, it’s too sweet or not sweet enough. You can never please all these palates.

I know that you use the Review Trackers platform to monitor customer reviews. Can you explain a little bit about how that works?
Basically, we log into Review Trackers once a day and it takes us literally 30 seconds to see what has gone on over the past 24 hours. It saves us so much time because all we have to do is just scan it and see if there is anything on the Internet about us. We don’t have to log into multiple sites to see what is going on. With all the positive reviews, we go ahead and write a personal note and say, “Thank you so much for your review.” Obviously, we never include a gift because we don’t want it to seem like a bribe. I think time is your biggest enemy when it comes to online reviews. If you let [a negative review] fester and grow, it can become devastating for your business.

How do you determine the value of a platform like Review Trackers?
It’s really easy for us to track because it’s based on the number of hours somebody would spend looking at all the different sites. You can quantify that. It’s something we were doing every day, but now I don’t have to pay somebody for six hours’ worth of work over the course of a week. If you do the math, over the course of a month that’s several hundred dollars instead of just paying for a platform. It’s obvious when you put it into numbers just how much you save. We have so many different key initiatives that we have for this year and next year, and I would rather put my people on that. So if there is a technology that is going to save us time and it’s going to save us money, then I’m all about it.

Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.

Click here to read more Street Fight local merchant case studies.