Case Study: Boutique Uses Foursquare for Broader Customer Demos

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At Dragonfly Shops & Gardens in Orange, California, owner Beth Davidson is always on the lookout for low-cost ways to get the word out about her boutique. In the last few years, she’s found that hyperlocal platforms offer a much better ROI than print advertising. With the help of social media consultant Jennifer Anastasi, Davidson is now using Foursquare as a marketing tool to reach a more diverse clientele. Although 93% of the people who view her promotions on social media sites like Facebook are female, the customer breakdown on location-based platforms is much more split. 41% of the people checking-in to her shop on Foursquare are men, versus 58% women.

How did you used to advertise before hyperlocal platforms came about?
Beth: I was in the newspaper for quite a while. I was pretty consistent with the paper, but it never really brought in a lot of business. The best thing we had going on for us in the paper was the calendar section, which is actually free. We got more people from [putting] our events in the calendar than we ever did from any advertising or coupons in the paper. In the [Orange County] Register they have the local section on Thursdays, Fridays, and Saturdays, and people definitely read that with their cup of coffee in the mornings. So we still do the calendar, but I don’t do any paid advertising in the paper at all.

[I’ve] been offering a rewards card program for a while that’s phasing out. It looked like a credit card, and every customer who came got this little card that had our logo and all of our information on it. Basically, they would get a point for every dollar they spent. When they got up to, say, 200 points, they could redeem it for $20. In essence, they were getting 10% back on their purchases. The point of that was they would carry it in their wallet; they would keep us in front of them and in view, and most customers loved it. The reason I’m phasing that out is I want to do something social-media based as a rewards program. So that’s the direction we’re heading and I’m not quite sure what that’s going to be yet.

It’s a different target audience on the location-based services. The men who come with their wives or girlfriends are starting to check-in.

Is the lack of upfront costs the main thing that has attracted you to hyperlocal platforms and social media sites so far?
Beth: Absolutely. And I realize, too, that social media is much, much bigger than I thought it was. My customers are way more social media savvy than I thought they were.

Who are your target customers?
Beth: The shop itself is a funky little place. It’s in an old house in an old section of Orange. On the outside we have garden art, and on the inside we have a clothing boutique, a jewelry boutique, and a classroom. We sort of have two segments. We have one segment of young moms with kids who will come in and buy some of the funky jewelry and clothes, and have their kids take our classes. And then we have the segment of women who are probably 40 and over who have lunch, and then come in after lunch and shop. Our customer base is really broken up into a lot of different segments because we offer so many different things.

So where are your customers? What platforms do they seem to be using?
Beth: Facebook, Twitter, Flickr, YouTube, and Foursquare. I also send out an email blast or an email newsletter weekly and I have a great deal of response from that.

How have you been using Foursquare as a marketing tool?
Jennifer: For [Beth], some metrics that are important to know are that from a social media perspective, 93% of her base is female. But when it comes to the location-based services, with her check-in metrics, we’ve got 58% females and 41% males that are checking-in. So, it’s a different target audience on the location-based services. The men who come with their wives or girlfriends are starting to check-in. About two or three months ago, we started running Foursquare check-in specials for newbies, and we’ve seen a lot of activity. Not a lot of unlocks, but a lot of activity in people around the neighborhood seeing [the Dragonfly] when they’re looking on Foursquare for what’s around. And then, we’ve seen a lot of activity from the check-in perspective.

I’ve heard you talk before about how people don’t have to be unlocking specials to see a boost in business. Can you explain how that plays out?
Jennifer: When you have a special, you stand out because [Foursquare] highlights your business. If you look at the area we’re in currently, when you pull up Foursquare, [Beth] and one of my other clients are the only ones that really show up. [Dragonfly] is technically just off of the main area of the Old Towne Orange Circle, so this drives a lot of people to know that Beth is half a block up the street.

You’ve also done a promotion with Groupon, right? How did that come about?
Jennifer: In March 2011, I started working with Beth from a social media perspective. One of the first calls that we made was to Groupon, to get on to their list, because we wanted to explore doing a deal with some sort of app. But Beth has a unique situation here in that there are multiple vendors within the shop, so she couldn’t just do a pure product discount. Instead, we focused on the classroom. It took us about six months for Groupon to get us in line. When we crafted the deal, it was specifically around the classroom, which had already seen a pretty substantial growth in the six months prior to that, based on the social media effort and a new website.

Were the people who bought your Groupons your typical customers, or new people you hadn’t seen before?
Beth: It was completely different people we hadn’t seen before, which was great. During the time that the Groupon ran, [a number of] people who had seen it called us to find out a little bit more about the Dragonfly because the Groupon was for such a specific thing. [The Dragonfly’s Groupon was for a private party, or $20 for $40 toward DIY classes.] We typically have about 72 hits a day on our website and when the Groupon ran, we were having about 1,500 a day. It was nice.

Did Groupon give you any idea of what to expect before your deal ran?
Jennifer: I would say that they didn’t really offer any merchant education. Part of that, I suspect, was because they were working with me as well. So, I would be advising Beth on some of the pitfalls and some of the things that we wanted to make sure were avoided. I was advising her on how to structure it and what to expect: Groupon people were going to review her differently; they wouldn’t be your typical customers. I would say, from a merchant education perspective, it was: Here’s our salesperson, lets make a deal, sign the contract, get in the system, and go.

Did you have any idea of how many coupons you’d sell?
Beth: I was hopeful that it wouldn’t go over 100 because we weren’t sure how we were going to assimilate that. We wound up selling 81, which was perfect for us in that it’s doable. It brought people in who did not know who we were. My goal is to get people in here, because once people come to the Dragonfly, they’ll come back.

Have you been able to tell yet whether the people who’ve come in are turning into repeat customers?
Beth: I’m confident they will. We just did a Groupon beading party for this woman’s 11-year-old daughter’s birthday, and she had no idea what was in here. So yes, she will absolutely come back. And then, [she’ll] bring her Girl Scout Troop. We’ve probably [redeemed] five Groupons so far, and I’m confident that those people will come back. Now that they know what’s here and all the things that are available, they’ll come back. So from my perspective, the Groupon was successful.

Why do you think you were successful with daily deals when some other companies have not been?
Jennifer: I think we went into Groupon with our eyes wide open. We knew that there were only certain aspects of the business that could support the model so that we didn’t walk away with a total loss. One thing we knew [was that] to be successful, we had to limit the number to be sold. We had to carefully construct what the Groupon could be applied to. We have multiple instructors here for the classroom and every instructor had to [sign] off on it to make sure they understood what was going to happen. I think the biggest key was that Beth was very clear in understanding that Groupon was for advertisement, not necessarily for the money she was going to make from it. To us, it was an investment in advertising and she got her name in front of people who would have never seen her before.

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This interview has been edited for length and clarity.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.