By Damon Cockrel
The year started off just like any other. January and February, typically the two slowest sales months of the year, were on par with 2019 and all indicators suggested that another growth year was ahead of us. Then, starting the week of March 8, and increasingly through the weeks of March 15 and 22, U.S. consumer behavior changed. Searches for “brewery near me” tanked, consumer spending on hotels and food services declined and in-person restaurant traffic was virtually non-existent.
Virtually overnight, on-site and owned-site draught sales all but disappeared, restaurant beer sales became carry-out only and packaged beer sales saw one of the only upticks as consumers resigned themselves to in-home consumption. As demand dried up, many breweries slowed or stopped production and owners began exploring survival strategies. COVID-19 had changed everything.
COVID-19 Cost Starbucks $1.2 billion in Sales.
Even coffee giant Starbucks wasn’t immune to this virus. During their fiscal Q4, Starbucks was forced to make the same types of adjustments; reduced hours, limited operations and owned-site closings. These adjustments resulted in a loss of $1.2 billion in sales. What’s remarkable is that because of the pandemic, analysts expected Starbucks to earn $6.06 billion in Q4, but the company overcame the loss and generated $6.2 billion.
What was Starbucks’ Secret?
Starbucks’ success was, in large part, the result of an investment they made 5 years earlier; to launch the Starbucks mobile app. The app had already made it convenient for customers to order, pay and earn rewards, now with the additional challenges of the pandemic, the app is now more important than ever. In fact, Starbucks just disclosed that nearly 25 percent of all orders in its stores are placed using the mobile app.
What does this mean to breweries? The limitations of the pandemic have forced a battle for mindshare. Winning the struggle for brand awareness and customer engagement is more important than ever. Big business was first to understand the value of having a presence on a customer’s smartphone. Every time a business’ app icon is seen is a brand impression and each impression that the business gains is an opportunity to build brand awareness and increase familiarity with a customer. Competition in the brewery industry is fierce. The breweries that survive will be the ones that foster brand loyalty by increasing customer connection and engagement to drive sales. There is no more effective asset your marketing arsenal than your brewery’s mobile app.
One of the first things that comes to mind when you begin thinking about a mobile app is a rewards program. It’s a natural thought as most breweries already have something in place. It’s only natural to migrate it to the app. Digital punch cards and point earning redemption programs are easy things for apps to recreate. It’s a good place to start but get creative. Think about what your customers really need, what will improve their brand experience and offer them incentives in exchange for their taking action. Here are just a few ideas:
- Plan Exclusive App-Only Loyalty Offers
These offers are exclusively available to your app users can only be redeemed with app points.
- Give Special Rewards for Referrals
Creating a referral mechanism in your app gives you opportunity to draw in new customers and rewards loyal customers.
- Design Bonus Point Campaigns
Allow your app users to earn more points than usual when taking specific actions.
- Random Prize Drawings
Give your app users the opportunity to win something big. This is a great way to reward loyal users and attract new ones.
- Offer App-Only Sales and Discounts
Give your app users access to exclusive sales or even early access to limited promotions. It’s another great way to say thank you.
Your mobile app is one of your most powerful tools for connecting and engaging with your customers. Over 90% of Americans say they frequently carry their phone with them and 76% say they rarely or never turn it off. No other channel gives you this type of immediate, direct and unfettered access to your customers. How can you leverage this access to get closer to your customers? This will get you started.
- In-App Customer Service
With the convenience of customer service inside your app, your customers can easily get assistance with a single tap. Use forms to create customer tickets and if any customer is disappointed or frustrated with your service, they can initiate a private chat with you giving you a chance to resolve their problem and improve the customer experience.
- Customer Feedback
Wonder what the your customers would think of your latest brainstorm or idea? Ask them. Targeted in-app surveys and feedback forms let you gather honest, actionable feedback from the users who know your brewery and products best.
- Push Notifications & Geofencing
A push notification is a message that pops up on a mobile device. They look like text messages and mobile alerts, but only reach your app users. Push notifications don’t get caught in spam filters or lost in inboxes they show up prominently on the screen of the phone. Notifications are an invaluable tool for reaching on-the-go consumers, especially now as people’s movements have been restricted during the pandemic.
Geofencing uses the phone’s internal GPS to deliver highly-relevant push notifications automatically to certain customers based on their physical location. Need an immediate sales spike? Hold a Pop-Up Event and send a coupon to all app users within 3 miles of your location that expires in 20 minutes.
There are only three ways to increase sales revenue; acquire more customers, increase the average purchase size per customer and increase the average customer purchase frequency. Your mobile app can help you do all three. You’ve already seen how mobile ordering, push notifications, reward programs and more can increase purchase size and frequency. So let’s wrap this up with an explanation of how to use your mobile app to acquire new customers.
The Perato Principle postulates that 80% of your sales comes from 20% of your customers. Each of us knows exactly who those top customers are. They buy consistently and frequent your locations. They’re the first to try your newest brews and are our loudest, most active advocates. They are your raving fans, your net promoters and we love them! They’ll be the first to adopt your app.
There’s a second group of patrons that have experience your brand, enjoyed it but have yet to become consistent customers. This group should be your “new customer” acquisition focus. They are the perfect target audience for your app adoption campaign. Here’s the best part. You already know who they are, where to find them and how to reach them. They are on your direct mail list, they’re following you on social media, they’re on your email newsletter distribution and in any number of other places where you’ve captured customer information. If you’re like most, you have hundreds, if not thousands, of these “engaged prospects” just waiting to become new customers. Introduce them to your app, then communicate and engage with them and watch your revenue climb.
Just like websites, there was a time when only large brands could afford to have a custom mobile app developed for their business. Today, that’s just not the case. Is it still possible to invest tens of thousands of dollars in the creation of an app? Absolutely. But with today’s advances, mobile apps have become more and more affordable. Just look through the billions of iOS and Android apps available today and you’ll find the apps from Fortune 500 companies sitting right alongside those from local neighborhood businesses. There is no excuse for you not to take advantage of this technology to grow your brewery.
In 1945 H.G. Wells wrote “Adapt or perish, now as ever, is nature’s inexorable imperative.” COVID-19 is just the latest example of our constantly changing world. Starbucks had no more idea that this was coming than any other business. Yet, their foresight to invest in enhancing the customer experience gave us a model that we can follow to navigate our own business through this global reset. Thanks Starbucks, we’ll be watching for your next move.