Case Study: Food Truck Says Single Deal Campaign Saturated Market
A food truck is often its own best advertising, as notes Kate Carrara, owner of Buttercream, a cupcake truck in Philadelphia. Still, to increase awareness, Carrara tapped into the daily deals craze in 2011 with campaigns through both Groupon and LivingSocial — which she’ll never do again. “I think I’ve saturated the market with it. I did it solely for the marketing,” she says, pointing to the 9,000 Twitter followers accumulated after the Groupon deal. Since then, she’s also tapped into Xipwire and LevelUp to combine hyperlocal marketing and commerce, two experiments with open outcomes. Here, she walks through the campaigns and how they worked out — or didn’t.
How do you tend to get the word out about Buttercream?
I have exclusively used new media. I would say that mainly my sources have been my website, Twitter, and the truck itself travelling around, which has its own cache. I’ve also run deals on various websites. I’ve done both LivingSocial and Groupon.
Looking at everything you’re using for marketing right now, what seems to be working best?
I think Twitter is the best. That’s basically a billboard into people’s homes. I actually run my Twitter feed through Facebook. I didn’t want Facebook [at first] because I just disagree with the company and I don’t know what they do with the information and their lists. I try to be cognizant of that, [when people] send me their emails. People are like, “Make those lists and send [marketing emails],” but it annoys me when people do that, so I don’t do it.
How have your deals on Groupon and LivingSocial stacked up? Is one company better than the other?
I would say that the LivingSocial experience was probably better, in terms of customer service and in terms of people calling and checking on you. They were obviously the second company to come along. Groupon was the first. I felt like Groupon [offered] no bells and no whistles; they just do what they do. But there wasn’t a great understanding, from the customer service standpoint. I thought LivingSocial had a slightly better experience in terms of the people that were there. It seemed like it was structured. I did it with them twice. The first time, they didn’t have the structure all around them, but I still found there were more people there to answer my questions. I pay attention to marketing — where they post banners, their ads on television — and I think LivingSocial [does] a better job.
Now that you’ve run a handful of deals, would you do it again?
No, I wouldn’t. I wouldn’t do either again because I think I’ve saturated the market with it. I did it solely for the marketing; I looked at it that way. I knew there was a curve of it and I knew it would end. From a marketing standpoint, it does work. It got my name out there, and I have almost 9,000 followers between Twitter and Facebook now.
I think this Groupon model is too easy to replicate, and there are too many people with listservs. Ultimately, why would you give up half [of your price]? The only reason you’re giving up half — by cutting your price in half and sharing it with these [deal] companies — is because they have a following and you know the eyes are going to be on it. It has reached critical mass. The problem with doing daily deals is that [afterward] every one of them comes out of the woodwork and finds you. They call you and say, “Hey, we’re BuyWithUs.com.” They’re pushing it so hard, and I’m like, “Yeah, but no one goes to your website, so why would I run this deal with you?” It makes no sense.
You have your people that are coming to [deal sites], and they’re getting eyes on [your company], but a lot of times, the people that are coming there are just looking for a deal. They’re not necessarily looking for the best . That’s the other issue. Do you want to just [offer] deals? Do you devalue yourself in any way by doing that? It’s a tightrope.
How about mobile payments. You worked with a company called Xipwire in the past, right?
Yeah, they approached me. I never [accepted] credit cards inside the truck because then I would have to have an Internet connection and all that stuff. But I knew early on, I said, “When are they going to have an app that is going to do this?” Xipwire was one of those in the early stages. I guess a guy from [University of Pennsylvania] came and made it, but there were a bunch of different ones going on at the same time. I tried it out, but I found it too difficult to use. This was a couple years ago. Then, when LevelUp came out, it was obviously much easier to use. Xipwire was with texting, and LevelUp is with a smartphone — I just take a picture. LevelUp is a heck of a lot easier.
Has LevelUp become a popular form of payment at your truck?
I don’t feel it’s growing in popularity. I think there’s a certain user that uses the app, and [that person] is a bit more savvy. I call them early adopters. They’re definitely there and those people do use it, but am I finding it to be a huge revolution? No. Cash still wins the day.
In terms of the merchant transaction fees, is it cheaper for you to accept payments with LevelUp than credit cards?
Well, that’s an issue I have. Right now LevelUp is in the testing phase. They tell you the percentage [discount], but it does get confusing for the merchant to know what the bottom line is. If I do a $20 transaction, what is going to come out of it? I feel like credit cards are the same way. So have I really figured it all out yet? No. I know from the standpoint of ease-of-use for the merchant, it’s easier. All I need is a phone. I don’t need an Internet connection, I don’t need a computer, I don’t need a card. From that standpoint, it’s definitely a good idea. But I don’t know if it’s been marketed in a way that people are going to pick it up — or if it’s even the right time. People might not be ready for moving away from credit cards yet. I think it will happen, but how is it going to happen? Will it be a PayPal-type thing? I don’t know.
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This interview has been edited for length and clarity.