Case Study: Hotel Boosts Business, Cuts Costs With Facebook Contests

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In the decade since Ronan McAuley purchased the Glenside Hotel in Drogheda, Ireland, the hotelier has spent approximately $20,000 a year on newspaper and radio advertising to promote his business’ holiday events. That changed in December 2011, when McAuley decided to forego traditional advertising and focus his resources on social media. McAuley now uses Offerpop to run competitions and promotions on his hotel’s Facebook page. McAuley says business is already up 18% since he started focusing on social media, while his marketing costs are only 20% of what they once were.

What are the biggest marketing challenges you’ve run into as a hotel owner?
I always struggle with regard to the return on investment that you’re making with different mediums. I always had difficulty trying to tangibly see what we were actually getting from local newspaper advertising and radio. I would spend significantly in this area, but for our core business, which is the wedding business, trying to see whether the amount you’re investing is worthwhile or not — I always struggled with that. I was in that position when we started to look at social media and Facebook. I made the decision starting last Christmas, where I would usually spend maybe $20,000 on advertising for Christmas events at the hotel, newspaper-wise. I just didn’t do any ads. I braved it out and did it through social media, and we were busier than ever.

In terms of social media, what did you do that worked so well?
I hired a young lady who [has a] master’s in hospitality management, and she came on board last summer. When she came on board, she said, “You’re missing out here. It’s an opportunity for you.” So I dedicated a couple days a week for her to work on social media; predominantly on Facebook. We do a little bit on Twitter, but not as much because Facebook is a lot more visual, and from the point of view of our core business, which is weddings, you want images. So what we did last Christmas was we ran a competition [on Facebook] in order to try and stimulate interest, to which there was a great reaction. Then in January, we ran a competition to give away a wedding. That is really what made our page excel.

I suppose the main thing is to keep the page active and always have something going on — within reason. You don’t want to annoy people, either. We jumped from 1,000 ‘likes’ to 15,000. Now I think we have 28,000. We have the largest amount of ‘likes’ of any hotel in Ireland. I [try to] be conscious of not just putting up posts for the sake of putting them up. We try to think of them in advance, and we try to keep our page looking interesting and representing what we do and who we are.

What made you decide to use Offerpop to run your Facebook competitions?
The young lady who looked after social media for me did some research [after] the competition in January. With the [wedding] competition, there were some big issues with regards to the software from the company we were using back then, and it created a huge amount of frustration. The way these competitions work, you’re trying to get them [to go] viral in order to increase [the number of] people ‘liking’ your page. But Facebook has very stringent rules in this area, and you have to be careful because if you break their rules, they’ll shut your page down. You’re not really allowed to say on your wall, “Go and ‘like’ our page in order to get into our competition,” and you can’t announce the winners on Facebook. We adhered to the rules, but what happened was the app that was in place crashed quite a few times during the competition, and that drove people crazy. Therefore, we weren’t happy with that company and we went to see who else was out there. We went with Offerpop because we liked the look of it, and we liked the way the software worked.

How would you describe Offerpop’s services to someone who had never heard of the platform before?
We’ve been using it for a couple months now, and what we’ve found is the software is super easy-to-use. Literally, it [took] 30 to 40 minutes on the phone with Offerpop [to get] us up to speed. They’ve got a variety of ways to keep your page interesting. It’s not just a case of having competitions only or photo contests. They’ve got little apps that allow referrals. They’ve got a tug-of-war app we used here with regard to two menus that we offer. Everyone went online and voted for their favorite menu, then we randomly picked a prize winner for a dinner. They’ve got sign up apps, they’ve got quizzes, fan pages that people can use to look at each other’s details when their on the Glenside page, and photo contests. We just ran another one, where we gave away a holiday worth $2,000 or $3,000. Now we’re going through a caption contest where [we’ll] put up an image and [fans] think of the best caption. There’s a baby boom going on in Ireland, so we’re looking at the christening business. So we’re giving away a 1,000 Euro meal for someone. We’re going to put up a cute picture of a baby and get them to put captions up for it.

How do you compare the cost of using a platform like Offerpop with the cost of traditional newspaper and radio advertising?
I suppose you’ve got to be feeling brave to do this type of stuff. In reality, Offerpop would maybe be about 20% of the cost of what I would have spent for newspaper and radio advertising. It costs about 20% of that spend. But we’re having an interesting time because with regard to Facebook in particular, we’ve done no other type of advertising since Christmas. I haven’t put in a newspaper or radio ad since last year while we continue to work on the Facebook end of things. The average increase in sales in our business of hotels in Ireland is about 4%. In our first six months of this year, we’re up 18%. So for 20% of the cost, you’re getting a nearly 20% increase in sales. That is huge. And by the way, that was a risk. That could have gone the other way on me, but I had a feeling.

Was it just a feeling, or had you talked to other hotel owners who’d tried similar marketing tactics before?
Some businesses are doing this really well, and some of them have huge followers but their might not be a strategic reason for it. I talk to a lot of hoteliers over here, and not a lot of them are up to speed in this area. That will change once they see the effect this can have on your business. When I saw the immediate reaction we were getting from people when we were doing our very first [Facebook] posts before last Christmas — when I saw the way the business was being talked about locally, that’s when I saw there was something in this. I bought the hotel 10 years ago, and in the last 10 years I never heard so many people talking about any ads I put in any other mediums [like] they were talking about Facebook.

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.

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.