Should Restaurant Franchises Use Social Media: Facebook?

A Guide for Franchisees Using Social Media

Authored by: Thomas Kovoor Spring 2012

INTERACTIVE COMMUNICATIONS ENTERPRISES

Should Restaurant Franchises Use Social Media: Facebook?

This guide is intended to provide strategies for social media practices with Facebook for public or private national franchises managing local franchises as well as local franchises interested in utilizing social media as a marketing strategy. The purpose of the report will be to identify the validity of using social media and highlight several approaches to marketing through these platforms. In addition, the report provides recommendations based on qualitative and quantitative research of both local and national Facebook pages.

Executive Summary
National and local franchises need to re-evaluate their marketing strategy specifically for Facebook to drive their business. In this report, social media is evaluated as a viable strategy for franchises, the theory of distributed capitalism is explained to support the mutation of traditional marketing into social media, the use of national and local Facebook pages are analyzed, and recommendations for implementing a local franchise page are explained. Our research recommends that local franchises create an engaged local Facebook page if they have support from the national franchise. As digital economics rise, the use of technology in the business world is ever present. Therefore, as traditional marketing mutates into a new approach through use of social media, we can engage our consumers by creating a platform for conversation and sharing ideas with a consumer-centric mindset. This is not to say the bipartite strategy is without potential hazards. Empowering local franchises to represent the national brand presents a serious risk of incoherent marketing strategies which could result in dilution of the brand. Successful implementation can only occur through thorough due diligence and careful monitoring. Despite the risks, the benefits of creating a customer-centric experience and engaging the customer at the local level will improve brand loyalty and profitability for the local franchise. As a result, the national franchise will benefit

Why is social media a viable market strategy for national restaurant franchises?
The franchise industry has largely been successful by its defined uniformity and consistency. With the rise of social media, the traditional ways of marketing are being stirred up. Social media platforms are quickly becoming an important part of franchise companies marketing strategies, especially in a time of lower marketing budgets, says Alisa Harrison, vice president, communications and marketing at the International Franchise Association.1 Since 80% of restaurant operators now identify social media as a marketing tool, there are 20% of restaurant operators that need to consider adjusting their strategy as internet use and social media rises across all demographics. The Pew Research Center for Internet & American Lifes Project has developed quantitative research on internet use showing the following: 80% of all adults are online (81% men, 79% women) 94% of adults aged 18-29 are online 88% of adults aged 30-49 are online (Internet User Demographics, 2012) 64% of adult users use an online social networking site (Trend Data, 2012) 43% of adult users use an online social networking site daily (What Internet User Do On A Typical Day, 2012) Figure 1: The market potential of Facebook Source: Infographics Lab As you can see in the Facebook infographic to the right, it demonstrates the large population actively using Facebook as well as highlight data showing the widespread reach across the world. These represent potential consumers for advertising purposes.

There continues to be a rise of social media usage over time. Not only is it evident from the graph of Daily Activities that both internet usage and social media usage are increasing, but it can be seen that the increase from 2008-2009 for social media usage is greater than that of the net gain in internet users in that time period. This shows that not only new users to the internet are joining social media sites, but that people who used the internet in previous years are becoming more active in social media as well. This demonstrates how Facebook is a viable option for a franchise due to the number of users, likes, etc. and a primary platform for franchises to engage with the customer in the short term and in the future. According to a recent study released by Aberdeen Group, 63 percent of companies plan to increase their social media marketing budgets in 2009, despite the poor state of the economy. Gini Dietrich, CEO of Arment Dietrich expressed that Ninety-three percent of Americans expect companies to have a social media presence and are using social media to participate in conversations, engage with brands, and find job opportunities. Furthermore, the following data collected from Franchiseknowhow explains that not only is social media growing in general, but also has shown a significant response from various restaurant franchises. o o 80% of restaurant operators say they now see social media as a marketing tool 17% plan to increase social budget from 2010-2011; social media tied with display media as largest budget areas of growth (Texeira, 2011)

These notions are supported by a theory of digital economics. As we advance, there is a strong belief that the post-industrial world economy will fundamentally rely on advanced technology. As Shoshana Zuboff wrote in Creating Value in the Age of Distributed Capitalism, the consumption shift in Fords time was from the elite to the masses; today, we are moving from an era of mass consumption to one focused on the individual. (Zuboff, 3) Mass consumption still exists, but as individual needs and wants are prioritized, we notice a high degree of customization for consumer products. Franchises like Chipotle and Burger King allow consumers to customize their meal to fit their individual preferences, rather than taking a one-size-fits-all approach. In a way, there is a transition from the masses to the individuals but now we have to consider how technology is creating an impact. In marketing, there has been a similar shift from mass consumer focus to an individual consumercentric model. We can observe this through the shift in use of social media over traditional

marketing. Social media allows enterprises to create public yet individual conversations between the consumer and the business through direct interaction on sites like Facebook and Twitter. This allows the company to put on a human face and relate directly to individual customers; other customers who witness this are more likely to conduct business with the company even if they are not directly involved in these conversations. In addition, social media offers enterprises the opportunity to target consumers at the individual level based on their actual interests which they publish on the site rather than their suspected interests based on the subject matter of a particular show on television. We see this practice in both Googles AdSense and Facebooks addelivery system. Merriam Webster defines a mutation as an alteration or change, as in nature, form, or quality. As new marketing techniques evolve, social media can be seen as a mutation of traditional marketing. Zuboff identifies the differences between mutation and innovation. Innovation in technology improves the framework in how goods and service are delivered whereas mutation creates new frameworks and new approaches to how to deliver goods and services. (Zuboff, 3) Social media exemplifies a major mutation from traditional marketing where Facebook can be used to target ads at consumers with individual interests. This mutation enables us to develop a different and better approach to business. As we can see through Amazon.com, Apple, eBay, and YouTube, there is a shift from products and services to tools and relationships enabled by interactive technologies. (Zuboff, 3) The main takeaways are that successful mutations like that of traditional marketing to social media exemplify new sources of value that the internet can bring to consumers. In a sense, it strengthens the sense of personal control, delivers opportunities for voicing ideas, and enables freely chosen social connections. This defines social media. Through the emerging understanding of the benefits of distributed capitalism, businesses with a consumer-centric focus have their consumers interest in mind rather than their own internal interest. In a society that transitions towards individual needs and customization, the mutation of traditional marketing into social media delineates how successful social media with in an era focused maximizing the experience of the end user. Social media is one of the best mutations that we can take advantage of as business owners. Overall, we can see the massive audience that social media appeals to and the potential that it has to simultaneously reach this large audience as well as create a more interactive and personal experience for each consumer.

Comparing National and Local Franchise Social Media Practices

There are several key differences between the national Facebook page for Buffalo Wild Wings and their places page for the Oxford, OH location. The national page can be characterized by a much wider following of people, but this can be somewhat discounted because a national page would appeal to a national audience while a local page would only appeal to a local one. One of the distinguishing characteristics of this page is that there are many more posts by Buffalo Wild Wings itself, and they are more prone to use company slogans. Of the few posts by patrons, the majority of posts are recommendations, but they tend to get lost in all of the posts that the company makes. One major drawback of the national page is that they are unable to advertise special events or specials that may only be occurring at one or a few locations.

The local Facebook page on the other hand is listed as a place as opposed to the group category and is followed by fewer people. Even though it is followed by fewer people, the patrons have a much more active scene on the front page of the page, with various reviews and comments being prevalent. The local franchises usually post reminders of local events as well as showcase their manager, employees, and other events. This page is far less developed than the national page, but the corporate management encouraging local franchises to better their page could quickly resolve this. Another main difference between the two pages is that the local page has a much greater feeling of community involvement, and is much more likely to have more comments such as Thank you for making me feel so welcome than the national page .

Analytics behind Buffalo Wild Wings

Source: Wildfire Social Media Marketing This graph demonstrates several key aspects of social media utilized by both the local and national Buffalo Wild Wings. The most evident finding is that significantly more people like the national page as opposed to the local page. However, if one considers that there are over 800 franchises throughout the United States, then that averages a total of 8972 likes per franchise on the national page (Buffalo Wild Wings, 2012). Although this may seem significantly higher than the Oxford, OH location, one must also consider that Oxford has a much smaller population than many of the larger cities that have a lower number of Buffalo Wild Wings per capita. The 2,110 likes that the Oxford, OH constitute roughly 10% of the total population of Oxford, OH, and that percentage is growing at a higher rate than the national organization. This Facebook page was also created several years after the Buffalo Wild Wings main page was created. When these facts are considered, it becomes evident that focusing efforts on local Facebook pages for each franchise would impact a significant portion of the community in which that franchise exists. Another benefit that this approach provides is that it allows other local businesses to like the page which builds a vast network in the community. Buffalo Wild Wings was used as the example because it had the most developed local page

available out of several restaurants in the Oxford, OH area. Several other restaurants had sites as well (e.g., Taco Bell and Jimmy Johns) but there was little to no information on the sites, and they were extremely underdeveloped, which may demonstrate the need for the franchisor to push at a corporate level for individual franchisees to develop and maintain a Facebook place page. Conversely, it may identify the restraints national franchises put on local franchisees decisions towards social media.

There are multiple reasons franchisors control social media under the franchise brand which include:
Allows for a consistent and single message to be communicated from one source, the franchisor. Reduce social media ability to disperse negative news rapidly. Monitor and respond to customer feedback on an as needed basis with the right response. Develop a franchisor media crisis plan to respond to serious threats. Concern that some franchisees may not effectively monitor their individual sites especially as pertains to negative customer feedback. Control the impact that terminated franchisees who feel disenfranchised have on the national franchise (Texeira, 2011)

In addition, there are several of state and federal laws that apply to social media campaigns. Issues to consider are the following:
Using false advertising and defamation Using other companys trademarks and copyrighted materials in social media posts using logos and copy without permission can give rise to infringement claims Using social media to screen employees and prospects, under certain circumstances, can give rise to privacy violations Using internal social media policies to restrict employees use of these platforms, if done improperly, can create legal liabilities Using social media can be a threat to maintaining proprietary rights in confidential information that is negligently disclosed (Fabian, 2011)

There are necessary risks and precautions to take when implementing social media at the local level. First, it is important to understand the terms of contract and the restrictions of social media. In Franchise Directs article on How Does Your Franchise Use Facebook?, one major concern is the lack of a coherent Facebook strategy. Carpenter, founder of Wild Birds Unlimited Inc., expressed his concerns stating that If you have no policy, [franchisees] will do whatever they think they should do. As with everything in franchising, a national vision and local mentality must go hand in hand when launching a Facebook page.

Recommendation
There has been an extreme push towards developing social media platforms to grow a business but few understanding the functionality of social media platforms like Facebook and how it interacts with consumers to expand product and brand recognition, drive sales and profitability, and engender loyalty.(Mckinsey, Demystifying Social Media) A local franchise operates under the umbrella of a national office. The national franchise provides support and strategy for local franchises to succeed. In certain franchises, there may be restrictions in how local franchises practice social media. From our research, we realize that local franchises should utilize create a local Facebook page if managed properly and supported by the national franchise. A Facebook page can be very useful to centralize pertinent information for consumers including a restaurants menu, hours, local events, etc. In addition, it is a cost effective way to engage consumers and initiate a customer-centric conversation to grow your sales/ profitability. But, remember there are proper ways to manage a Facebook page. Your company website serves as a tool to distribute content and awareness. Adding social media is beneficial because it adds a new channel to distribute content, links, articles to spread to other potential customers. In addition, once a business develops a loyal customer, they can expect to be able to distribute content directly to those who are interested which allows a more tailored form of marketing generating more directly targeted sales. This is the main reason why social media needs to be implemented. There is a right and wrong way to social media marketing. For instance, you dont invite people over to watch a sports game and then do a sales presentation. Successful businesses focus on developing trust to generate faithful and loyal customers. Instead of using forceful sales tactics, businesses should offer their professional advice to customers problems in a friendly way. To the right, David Steele from the Steel Method outlines major dos and donts of social media marketing.

Implementation of an engaged Facebook page

There are two main reasons to create an engaged Facebook page: 1) to take advantage of loyal consumers and 2) to not disinterest consumers. There are multiple reasons consumers become less engaged over time. Refer to the figure below.

Source: Wildfire Social Media Marketing

Above are examples of things not to do. Instead, to increase engagement, you should do the following suggested by Wild Fire Social Media Marketing:
1. Go beyond the newsfeed Integrate applications that encourage activity from users such as Wildfire Page Manager. This will allow fans a more dynamic experience on your page reducing the likelihood of a fan feeling that the page is static. 2. Create social sharing Incorporate items that are easily are easily shareable. It is known that 18% of users become a fan to show others that they support brand. Therefore, it is important to provide items such as videos, jokes, pictures, etc. about your company. 3. Create brand affinity Develop strong relationships that establish exclusive access. It is known that 8% of users become of a fan to know information first and 6% of users become a fan to gain access to exclusive content (eMarketer). 4. Use the wall for nurturing fans over time Facebook should be used to create a customer-centric conversation. Initiate, engage, and continue to address the needs and wants of consumers to raise their interest and awareness of what is going on in your business. (Mind the Statistics, 2012)

Through expert interviews, McKinsey was able to identify how to continuously improve and monitor how social media affects your consumer. There are 10 major touch-points throughout the consumer decision journey that are broken into four major subcategories.

Exhibit 1 shows how many different places along the consumer journey there are to track and alter social medias effectiveness. As you implement an engaged Facebook page, make sure you monitor what consumers are saying to understand consumer trends. Furthermore, continue to respond to consumers comments, amplify the brand by providing recommendations, fostering social sharing and brand advocacy, and lead changes in behavior by raising brand content awareness, product launches, targeted deals, and altering from customer input.

Conclusion
It is apparent that national and local franchises need to implement engaged Facebook pages. The trend of social media in the franchising industry is drastically rising with only 20% of franchises not using social media. In addition, in recent years, there has been a large increase across all demographics of internet and social networking use. During this time, Facebook has risen to a population of over 845 million monthly active users and over 100 billion connections. This shows how much activity and potential market there is in social media for businesses. As digital economics rise, traditional marketing mutates into a new approach through use of social media in which we can engage our consumers by creating a platform for conversation and sharing ideas with a consumer-centric mindset. After analyzing the national and local Facebook pages of Buffalo Wild Wings, we can identify how the customer interaction on the local page seems me interactive and personal compared to the more informational experience on the national page. Through the Wild Fire Facebook likes comparison, we can see that the national page has more likes compared to the local page, 7,178,061 and 2,110 likes, respectively but by considering per population that Oxford, OH is growing at a higher rate than the national organization. There are necessary risks and precautions to take when entering social media but overall, the industry trend is moving towards this cost effective and efficient form of advertising. Therefore, as a franchisor, we recommend implementing a local Facebook page if the page is supported by the national franchise. As you embark into the world of social media marketing to engage your local community, remember how important it is to track the effectiveness of your time and employees time investment and continuously improve on engaging consumers in an on-going conversation to manage your local page and its brand in a proper manner and grow your sales through consumer engagement and loyalty. With this in mind, there are endless benefits to be expected from entering the social media realm.

References
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