Last Updated Dec 20, 2010 7:14 PM EST
By Jason Fell for Entrepreneur
The holiday retail push is in full swing and virtual cash registers are virtually ringing as consumers the world over are scouring the Internet, buying up gifts for friends, family members and clients. To cash in on the action, small businesses are using low-cost social media tactics to increase holiday sales.
From creative discount deals to contests to online gaming, here are three examples of how businesses have tapped the social web to spread the word about their holiday promotions and give their revenues a year-end jolt.
Customers Choose the Sale
This year, Dan Pritchett wanted to turn the tables on how businesses traditionally offer discounts. Instead of choosing which products to mark down, Pritchett asked his customers to tell him the items they preferred to see on sale.
"I wanted to find a way to create the buzz and excitement of Black Friday shopping frenzy, while also not offending customers who will see a big discounted price list that they missed out on after the sale is over," says Pritchett, vice president of marketing at Logos, a Bellingham, Wash.-based online bible-study resource retailer.
On Friday, Nov. 26, Logos wrote on its blog, Twitter and Facebook, asking customers to choose any three products they wished were on sale and email the list to Logos. After receiving the emails, Pritchett and his team replied with exclusive, limited-time sale prices for those products. Customers then had 48 hours to make their purchases.
Pritchett says reaction to the social media announcements was immediate and overwhelming. Customers created their own thread on the site's forums page, which received more than 13,000 views and 240 comments. In comparison, Pritchett says a typical forum post gets fewer than 100 views and only about 10 comments.
By the time the promotion ended the following Friday, Logos received about 2,000 emails and generated about $300,000 -- tripling revenues compared with the same period last year. What's more, Logos, which is projecting nearly $30 million in revenue this year, bolstered its marketing list with the new contacts that came in from the promotion.
A Contest That Really 'Cooked'
Sometimes mistakes lead to creative business ideas. That's what happened this fall at Lather, an 11-year-old skin-care products retailer based in Pasadena, Calif., when an internal document about a new exfoliating rub read "Cranberry Sugar Ribs" instead of "Cranberry Sugar Rub." Lather founder Emilie Hoyt saw the typo as an opportunity to tap the growing popularity of cooking-related television shows and blogs.
It wasn't long before Hoyt and her team of 25 employees cooked up a plan for an online contest soliciting the best recipes for cranberry-themed foods. The winners would receive up to $150 in products.
After creating a dedicated contest page, Lather announced a month-long competition Oct. 8, by emails to its customer database, a post on the company's blog and frequent posts to its Facebook and Twitter pages. By the Nov. 8 deadline, Lather received nearly 100 recipe submissions. Sales of Lather's cranberry products are up by nearly 20 percent over this time last year, according to Hoyt.
Another bonus was that Lather, which expects to pull in about $10 million in revenue this year, added the names and emails it collected from each recipe submission to its marketing database.
Social Gaming: Not Just for Fun
With more than 200 million people playing games online each month, the opportunities for generating revenue in the social gaming market are expanding. That's why Mertado, a social-shopping site based in Palo Alto, Calif., launched its online storefront in April using the Facebook Platform, which allows developers to integrate applications from Facebook and other social media sites. For the holidays, the company, which sells home-and-garden, electronics and beauty products, created a pair of promotions: "Gifts for the Gadget Geek," which took place over Black Friday weekend, and "Discover Gift Ideas Fridays," which ran through Friday, Dec. 17.
For the promotions, Mertado partnered with advertising networks and game developers to deliver targeted, in-game advertising to their players. For instance, someone playing Kabam's Facebook game Kingdoms of Camelot would see a button on his or her screen for a "Deal of the Day." If the player clicked on the button, an ad for Mertado's Black Friday Gadget Deals popped up. After clicking on the ad, the player was directed to a page on Mertado's website where he or she could buy items associated with that promotion.
Mertado offered incentives by crediting players with virtual currency that they could use for online gaming. Other games involved in Mertado's promotions were Playfish's Pet Society and Playdom's My Vineyard.
Nearly 10,000 players participated in both promotions, says Mertado co-founder and chief executive Vijay Chittoor. Sales over Black Friday weekend rolled in about five times higher than previous weekends, about 200 percent higher than internal projections, says Chittoor. According to the terms of the partnership, Mertado paid the game developers between 5 percent and 15 percent of each product's sale price.
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