Cornell Hospitality ReportVol. 13, No. 12 January 2013All CHR reports are available for free download,but may not be reposted, reproduced, or distributedwithout the express permission of the publisherSocial Media Usein theRestaurant Industry:A Work in Progressby Abigail M. Needlesand Gary M. Thompson, Ph.D.7 May
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4 The Center for Hospitality Research • Cornell UniversityExecutive SummarySocial Media Use in theRestaurant Industry:Asurvey of 166 restaurant managers reveals a mixed picture in their use of social media and itsimpact on operations. Although many restaurants are using social media, the study found thatmany restaurateurs lack well-defined social media goals, both in terms of the purpose of therestaurants’ social media activities and the target of their social media messages. Although therestaurant operators in this convenience sample were generally supportive of the use of social media, well overhalf were not certain that social media met one or more of three specific goals, namely, increasing customerloyalty, bringing in new customers, and boosting revenues. The respondents generally rely more heavily on non-financial metrics than on actual financial numbers to measure the return on their social media investment, dueto the large degree of uncertainty surrounding how to measure the financial returns of social media on operations.On balance, independent restaurants made more use of social media than did chains. The study’s findings suggestthat restaurateurs should reevaluate their social media approaches to ensure that they are strategically designedand executed.A Work in Progressby Abigail M. Needles and Gary M. Thompson
Cornell Hospitality Report • May 2013 • www.chr.cornell.edu 5Abigail M. Needles, an incoming Ph.D. student at the Mays Business School at Texas A&M University, earneda Master of Science in Accountancy degree from DePaul University, where she has been a graduate teachingassistant at the Charles H. Kellstadt Graduate School of Business. A graduate of the Cornell School of HotelAdministration, she was a lead teaching assistant at Cornell and assisted in the production of the BusinessCommunication text, eighth edition, with Cornell Professor Amy Newman (firstname.lastname@example.org).Gary M. Thompson, Ph.D., is a professor of operations management in the School of Hotel Administrationat Cornell University, where he teaches graduate and undergraduate courses in service operations management(email@example.com). Prior to joining Cornell in 1995, he spent eight years on the faculty of the David Eccles Schoolof Business at the University of Utah. His current research focuses on restaurant revenue management, food andbeverage forecasting in lodging operations, workforce staffing and scheduling decisions, wine cellars, schedul-ing conferences, and course scheduling in post-secondary and corporate training environments. His research hasappeared in the Cornell Hospitality Quarterly, Decision Sciences, Journal of Operations Management, Journal ofService Research, Management Science, Naval Research Logistics, and Operations Research. He has consulted forseveral prominent hospitality companies and is the founder and president of Thoughtimus® Inc., a small softwaredevelopment firm focussing on scheduling products. From July 2003 through June 2006 he served as executivedirector of the school’s Center for Hospitality Research.About the Authors
6 The Center for Hospitality Research • Cornell UniversityCOrnell Hospitality REportSocial media is changing many aspects of restaurant operations, including marketingpromotions, customer relations, and methods of hiring new employees. The result of socialmedia–driven changes is that restaurant operators now have a new set of opportunitiesand also a new set of challenges to go along with their core purposes of providing guestswith a meal and an experience that the guest perceives as valuable based on the price paid. Restaurants’tight cost structure may mean that social media—a low-cost marketing tool—would be a natural fit forrestaurant marketing. This report explores the use of social media in the restaurant industry.Social Media Usein the Restaurant Industry:A Work in Progressby Abigail M. Needles and Gary M. Thompson
Cornell Hospitality Report • May 2013 • www.chr.cornell.edu 7Social media marketing requires a different approachthan traditional marketing, because social media involveinteracting directly with a business’s customers. In this regard,listening is just as important as responding or posting. Manyrestaurants already use social media for a variety of purposes.As just one example, food trucks often rely on social media tobroadcast their location and menu.1As we said, the comparatively low cost of participatingin social media blends well with the restaurant industry’sstructure. The internet has a wealth of information availableto managers, allowing them to learn what people are sayingabout their restaurant and to take advantage of opportunitiesto redeem service failures and improve performance. Well-managed social media sites can create a virtual relationshipwith existing customers or convince a first-time guest to visit.2In addition, a restaurant can manage its online reputation byactively participating in social media. Social media have thepotential to influence all levels of Lavidge and Steiner’s tra-ditional Hierarchy of Effects model, from awareness throughpurchase.3Despite the anecdotal evidence supporting social mediause, owners and investors might still question social media’sreturn on investment (ROI). Persuasively presenting the casefor social media is difficult when the returns have been dif-ficult to demonstrate.4Marketers are looking for solid metricsto defend social networking activity, but those are elusive to1 Zachary Sniderman, “How Social Media Is Fueling the Food Truck Phe-nomenon,” mashable.com (2011) (as viewed on October, 2011).2 I. S. Pantelidis, “Electronic Meal Experience: A Content Analysis ofOnline Restaurant Comments,” Cornell Hospitality Quarterly 51.4 (2010):483-491.3 Robert J. Lavidge and Gary A. Steiner, “A Model for Predictive Measure-ments of Advertising Effectiveness,” Journal of Advertising, Vol. 25 (October1961), pp. 59-62.4 Sarah Shearman, “Proving social media’s ROI,” Marketing (00253650)(2011): 15. Business Source Complete. EBSCO; viewed 27 Sept. 2011.establish.5So far, decisions to invest in social media aremore frequently made on the generally accepted belief thatsocial media is an important tool (which continues to growin importance), instead of on the basis of a calculated ROI,perhaps in part because of the dearth of academic researchin this area.6Part of the challenge in calculating ROI is determiningrevenue resulting from social media activities. The cost isrelatively easy to measure: an account on a social networkis generally free, and although a company may choose topurchase social media software, labor is the main contribu-tor to cost. Potential revenue is significantly more challeng-ing to quantify. By engaging with a potential customer on-line, a company might be able to bring that individual to asale, increasing revenues. This return can be quantified, butit’s hard to calculate the effects of electronic word of mouthfrom customers sharing their restaurant experiences withtheir network or writing a review. These characteristics cre-ate a significant challenge in concretely measuring return.Therefore, some might argue that a business’s return is thestrength of its network. Because the networking processtakes an investment of time, time is of the essence for com-panies desiring to have strong networks.7While this paperdoes not delve into specific financial returns, it frames thediscussion by determining the areas where restaurateurssee a value in social media.MethodologyOur study investigates the purposes for which restaurantsuse social networking services to connect with current5 Beth Negus Viveiros, “Following the Tracks,” Chief Marketer 2.2 (2010),pp. 36-37. Business Source Complete. EBSCO; viewed 27 Sept. 2011.6 Robert Duboff and Scott Wilkerson, “Social Media ROI,” MarketingManagement 19.4 (2010), pp. 32-37. Business Source Complete. EBSCO;viewed 27 Sept. 2011.7 Shearman, op.cit.
8 The Center for Hospitality Research • Cornell University• Why is the use of social media not in your future mar-keting plans?The final section of the survey identified the actual orperceived benefits of the use of social media and how thereturn on the investment in social media was measured.ResultsWho uses social media. Independents were more likely touse social media than chains. About 59 percent of the chainrestaurants used social media, while 75 percent of indepen-dents were doing so. Partitioning responses indicated thatmost restaurant chains ran their social media strategy fromheadquarters, as three-quarters of the chain respondentswho used social media were headquarters staff. In contrast,about two-thirds of employees at the individual restaurantswere involved with their chain’s social media. While not sta-tistically different, this interesting distinction suggests thatchain headquarters, because of greater size and potentialaccess to resources, may be more likely to use social media.As seen in Exhibit 1, large restaurants—based on num-ber of seats—are more likely to use social media. A restau-rant with a large seating capacity (200+) is at a significantcompetitive disadvantage if it does not use social mediamarketing. As restaurants decrease in size, the competitivedisadvantage narrows.Influence of target market on social media use. Wefound a variation in a restaurant’s social media use based onits target market. As shown in Exhibit 2, restaurants that useand potential customers and the specific mix of socialnetworking services employed. The majority of questionsin our survey of restaurateurs were designed to providegreater insights into the strategic use of social media by eachrestaurant, first by gathering information about what typesof social media are used and second by exploring how eachof those types of social media are used. The four social net-working services highlighted in this survey were Facebook,Twitter, Foursquare, and blogs.We e-mailed this survey to 2,527 individuals who haddownloaded restaurant-related material from the websiteof the Center for Hospitality Research at Cornell University.We received 288 responses with 214 completed surveys. Ourfinal sample was 166, after we eliminated respondents whodid not work in the restaurant industry. Because of the rela-tively small final sample size, our results should be viewed asinformative rather than as definitive.The survey asked for respondents’ demographic char-acteristics, their current use of social media tools, and theperceived benefits of those tools. The sample comprisedindividuals in three categories: current users of social mediatools, individuals who plan to use social media in the future,and respondents who do not plan to employ social mediaas a component of their marketing strategy. Each group wasasked the appropriate “why” question, as follows:• Why do you currently use social media?;• Why are you waiting to implement a social mediastrategy?; andExhibit 2Demographics of target markets by whetherrestaurant uses social mediaExhibit 1Restaurants’ use of social media (by seat count)SeatcountPercentage using social media0 20% 40% 60% 80% 100%201+101–2001-100Use social mediaDon’t use social media AverageweightDemographic Single Married Families50%45%40%35%30%25%20%15%10%5%0Use social mediaDon’t use social media
Cornell Hospitality Report • May 2013 • www.chr.cornell.edu 9social media primarily target married individuals, followedby families and single individuals. By contrast, restaurantsthat do not use social media target families heavily, followedby married and single individuals.The analysis of target market age groups (Exhibit 3)revealed that the 30–39 age range is important to restaurantsusing social media, and certainly that age group includesheavy social media users. But this is a popular demographicfor all restaurants, as the 30–39 age range had a weight of39.9 percent for companies using social media comparedto 30.7 percent for those that do not. Following the 30–39segment in importance is the 40–49 segment, with a weightof 26.6 percent. These results are consistent with the aver-age age of Facebook and Twitter users. A study done in theUnited States by Pingdom found that the average user age ofFacebook is 40.5, while Twitter’s average is 37.3 years.8Thoserestaurants not using social media give comparatively moreweight to the young (0–12) and older (60+) age ranges, per-haps related to the usage of social media in those age groups.Social media efforts are more strongly directed towardssingle individuals and less so to married couples and fami-lies, as compared to the target market for the restaurant as awhole (Exhibit 4). Even so, these three segments are targetedrelatively evenly (ranging from 30 to 36 percent).The age of the target market for social media activities,as expected, is 20–49, an age range that is generally lowerthan the target market for the restaurant as a whole (Exhibit8 Pingdom, “Report: Social Network Demographics in 2012,” pingdom.com (2012) (as viewed in November 2012).5). This finding is consistent with the common perceptionthat social media are more heavily used by younger individ-uals. Restaurateurs may wish to compare these demographicstatistics to their own social media strategy to help assesswhether they are hitting their target demographic.Why some restaurants do not use social media. A doz-en restaurateurs indicated they have no plans to use socialmedia in the foreseeable future and another seventeen saidthey just had not gotten to it yet (the reasons given by bothExhibit 3Age of target markets by whether restaurant usessocial mediaAge0–12 13–19 20–29 30–39 40–49 50–59 60–69 70+Use social mediaDon’t use social mediaAverageweight45%40%35%30%25%20%15%10%5%0Exhibit 4Demographics of target markets for social mediausers versus restaurant’s overall target marketAverageweightDemographic Single Married Families45%40%35%30%25%20%15%10%5%0Target market for social mediaTarget market for restaurantExhibit 5Age of target markets for social media users versusthe restaurant’s overall target marketAge0–12 13–19 20–29 30–39 40–49 50–59 60–69 70+Averageweight45%40%35%30%25%20%15%10%5%0Target market for social mediaTarget market for restaurant
10 The Center for Hospitality Research • Cornell Universitygroups are shown in Exhibit 6). The most often mentionedreason was “a bad fit.” One respondent describes socialmedia as “very cold and unreal for communicating… we liketo [interact] directly [with] our guests.” Other restaurantsdescribed themselves as “well-known” or “old fashioned,”another reason they thought social media would be a bad fit.The restaurants that don’t currently use social mediabut would initiate a social media program in the future alsoworried about fit, as well as skepticism and lack of knowl-edge. These restaurateurs were “not sure of its effectiveness,”were “short on resources” and “cost [constrained],” or simply“[lacked] knowledge” to get started and “[needed] to under-stand it better.” For restaurants who seek more knowledge,these findings are an invitation for the industry or academeto provide more social media information.The Use of Social MediaGiven that an analysis of the dozens of social media net-works would be impossible, we focused on the four socialmedia networks which are arguably the most popular: Twit-ter, Facebook, Foursquare, and blogs. The use of these socialmedia tools by respondents is summarized in Exhibit 7.At this time, Facebook is the most popular social medianetwork, with over 800 million active users. As shown inExhibit 7, 93 percent of respondents whose restaurants usesocial media include Facebook as a component of their mar-keting strategy, consistent with its overall popularity.The specific ways the restaurants use Facebook, Twitter,and blogs are summarized in Exhibit 8 (next page). The topthree uses are (1) promotions, (2) link to or share news, and(3) personal contact with guest.Although all three tools are used for these purposes,the restaurateurs are using Twitter heavily for promotions(41 percent of respondents). In addition to providing linksto promotions and news, the restaurateurs are respondingto guest comments. Facebook is used about equally for thetop three purposes, while blogs have a stronger emphasison linking and sharing news. Of these three tools, blogsdemonstrate the greatest adaptability. The restaurants sharevideos, take polls, and offer service recovery messages, foodreviews, and month-in-review summaries (the “other” itemin Exhibit 8).Foursquare is a different type of service than the otherthree, and it is particularly useful for restaurateurs becauseits users “check-in” and broadcast their location to their net-work, which means that a “local search” strategy can be ap-plied. About one-fourth of respondents use Foursquare, and16.4 percent of respondents provide specials to “checked-in”guests, in a classic “local” strategy. Some respondents givea free food item after a particular number of “check-ins,”and others offer a discount. By providing these specials tocustomers who “check-in,” restaurateurs encourage theircustomers to advertise the restaurant to the customer’snetwork. Some respondents use Foursquare to monitor thedemographics of who “checks-in” or just to have a presence.Based on its flexibility and reach, we see Facebook asthe place to start with a social media strategy. It is the mostpopular tool with restaurateurs, it’s the most widely used so-cial network, and it provides substantial flexibility. Primaryuses of Facebook and the other three sites include promo-tions, news updates, and guest interaction.Exhibit 6Reasons restaurateurs have no plans to use social media or have yet to initiate social media useResponse No Plans Yet-to-InitiateSocial media is a bad fit with our restaurant 5 3Skeptical 2 5Waiting for the brand or headquarters to initiate social media 3Lacking knowledge - 3Currently working on starting a social media effort - 2Other 2 4Exhibit 7Number of respondents using selected social mediaSocial Media Tool Number of UsersPercentage ofUsersFacebook 57 93%Twitter 35 57%Blogs 25 41%Foursquare 14 23%
Cornell Hospitality Report • May 2013 • www.chr.cornell.edu 11Social media use segmented by restaurant character-istics. The social media differences between independentand chain restaurants extend to the channel they commonlyuse. While both groups embrace the use of Facebook, inde-pendent restaurants have a higher propensity to use Twitterand Foursquare than do chain properties. In addition togreater use by independents of all the social media toolssurveyed, the results also indicate that independents arealso more likely to use a combination of several social me-dia tools. Based on the four channels we studied, Exhibit 9summarizes the number of social media tools used by chainand independent restaurants.As shown in Exhibit 9, the majority of chain restaurantsin this study only use one social medium, and generallythat means Facebook. Since that is the most popular socialmedia network, it’s the obvious choice for a single-channelstrategy.Taking the sample as a whole, we saw no noticeabledifferences between the casual or family segment and fine-dining restaurants in their frequency of use of Twitter, Face-book, blogs, or Foursquare. We expected to find a differenceExhibit 8Respondents’ use of Twitter, Facebook, and blogsPromotions454035302520151050NumberofrespondentsLink to or share newsPersonal contact with guestsService recoveryShare videosOtherPolls Use 4 types Use 3 types Use 2 types Use 1 typeExhibit 9Number of social media tools used by chain andindependent restaurants70%60%50%40%30%20%10%0ChainIndependentTwitterFacebookBlogs
12 The Center for Hospitality Research • Cornell UniversityExhibit 10Rationale for social media metricsin these two restaurant types, given their different marketsegments, but that was not the case.Monitoring social media activity. More than two-thirds of the respondents who use social media check com-petitors’ activity on social media networks. In addition, morethan half use an alert system so that they know when theirrestaurant is mentioned on any website. Google Alerts is themost commonly used alert tool, followed by searching therestaurant’s name or another related term on a search enginesuch as Google. The explanations provided by respondentsgenerally included action verbs such as “monitor,” “track,”“check,” “stay on top,” or “see what people [are saying].” Thetwo primary goals or purposes of monitoring online activitywere to be informed of activity regarding the restaurant andto know when a customer needed a response. In sum, thesefindings show the importance of maintaining an active socialmedia strategy.Social Mediaas an Element of Marketing StrategyWe anticipated that our respondents would be able to enun-ciate the goals and intended audiences of their social mediastrategy, and we were surprised to find that these strategiesdo not appear to be as focused as we expected.Goals. Respondents had numerous goals for theirsocial media efforts, with almost 60 percent identifyingfour or more purposes. To account for multiple answers, wecalculated weighted averages (for example, if a respondentselected three options, each was given a weight of 0.333).9The resulting goals and their corresponding weighted aver-age, are as follows:• Increase brand awareness (23%);• Increase loyalty (21%);9 A limitation of this research is that when provided with the option toselect multiple responses, respondents were not asked to provide theimportance (or weight) of each selection. The analysis assumes, therefore,that each selection carries equal importance (or weight).• Bring in new customers (21%);• Increase customer connection to brand (19%); and• Increase revenues (16%).We read these results as revealing that most restau-rateurs do not have a specific identified overarching goalregarding social media, but instead are simply jumping intosocial media hoping for any positive outcome. It does appearthat each of these goals could support a restaurant’s use ofsocial media, but an inherent challenge exists in calculatinga return on social media investment when the social mediagoal is vague, hard to measure, or part of a cluster of goals. Ifthe restaurateur focuses on a single goal, such as “bringingin new customers,” then return can be measured by countingthe new customers to the restaurant who learned about therestaurant through social media.Reach. The restaurants seemed more focused in termsof whom they intended to reach with their social media ef-forts, as new customers were mentioned by about half of therespondents, followed by non-loyal current customers, andcurrent loyal customers:• New customers (47%);• Current, but not loyal customers (31%); and• Loyal customers (22%).Logically, loyal customers are ranked third in impor-tance here, because loyal customers are less dependent onsocial media marketing to return to the restaurant.Although these results indicate that restaurateurs targetsome segments more intentionally than others, we stillsee some strategic diffusion, since slightly over half of therespondents selected all three customer types, suggestingthat their social media target customer may not be well-defined. Further evidence of this ambiguity is that one-thirdof respondents selected all three options as intended targetsof social media activity and also selected four or five of thesocial media goals in the prior question. Contrary to whatwe find here, we suggest that a restaurateur’s approach tosocial media should exhibit the same intentionality andlaser focus that the operator applies to other components ofthe overall marketing strategy, by focusing on one (strong)social medium and targeting one (likely) customer type.Measuring Social Media Impact on OperationsSince acquiring more customers is the top goal for ourrespondents, it makes sense that counting customers is themost common way of tracking the impact of social media.Respondents also used several other methods:• Number of customers (31%);• Followers (21%);• “Likes” (19%);• Amount of “chatter” (13%);• Track coupons (10%); and• Other (6%).Reason forMeasuringNumber ofrespondentsPercentage ofrespondentsSomething Tangible 15 38.4%Chatter 5 12.8%Revenues 5 12.8%Multiple Metrics 5 12.8%Not Measured 4 10.2%Unsure 3 7.7%Promotions 2 5.1%
Cornell Hospitality Report • May 2013 • www.chr.cornell.edu 13In addition to an increase in the number of customersthe restaurateurs were looking for more followers (on Twit-ter) and likes (on Facebook), since they could then shareupdates and news about the restaurant. “Chatter” includesconversations about the restaurant over social media net-works and comments directed at the restaurant, as well asanonymous reviews such as on Yelp. “Chatter” indicates thatthe customer has taken the initiative to begin a conversationabout the brand to others—an indication that the restaurantis benefitting from word of mouth. Respondents that offeredgroup or social media coupons tracked the results of thosecoupons.As shown in Exhibit 10, the most common rationale forchoosing a particular metric is the need to have some kindof tangible measurement of social media activity. The num-ber of followers or likes on Twitter and Facebook are easy tomeasure and record, and they are clear and notable. Mea-surement of “chatter” is a method to monitor increased wordof mouth. However, these easy-to-measure gauges may notbe as important as those relating to revenue. Most critically,an increase in the number of customers helps with calcula-tions of return on investment, since those added customersshould mean increased revenues. Stressing the importanceof the bottom line, one respondent stated, “Social media isonly successful if it brings in customers.” About one-eighthof the respondents indicated the need for a well-rounded ap-proach that considered multiple metrics. As one restaurateursaid, “No single metric gives enough information to accu-rately capture [the] data,” and “both qualitative and quantita-tive measures of the social media program” are required.Perceived social media impact on operations. In fact,the difficulty of measuring the impact of social media is oneof the key issues identified in this study. As shown in Exhibit11, well over half of the respondents are not really sure thatsocial media helped with achieving any of the three goals(that is, increasing customer loyalty, bringing in new cus-tomers, or boosting revenues). On balance, however, theserestaurateurs remained favorable to the use of social media.None of the respondents concluded that using socialmedia had a negative impact on those goals, and the over-whelming perception for the use of social media is favorable.About 40 percent of respondents indicated that at least oneof the three categories definitely increased. Approximately30 percent of respondents in each category felt that the met-ric definitely increased. A strong majority (49.1–56.1%) ofrespondents in each category felt that social media possiblyincreased the metric. Only a small portion of respondentssimply couldn’t tell whether social media made an impact.Perceived social media impact on revenues. Althoughmany respondents indicated that better relationships are themain goal of a social media strategy, rather than increasedrevenues, impact on revenues remain a key issue. Just under40 percent of the respondents thought social media didbring in additional revenues: Yes (38.6%), Not Sure (56.1%),and No (5.3%).Again, we see the uncertainty in measuring social media.Although many are confident that social media brings inadditional revenues, the strong majority are uncertain. Theseresults highlight the need for a methodology for measuringthe impact of social media on revenues. Several approachesto measuring social media’s return on investment in lodgingare demonstrated by Chris Anderson in a 2012 CHR report.10Respondents who did link additional revenues to theuse of social media did so by monitoring the following:• New customers on a customer relationship manage-ment system;10 C.A. Anderson, “The Impact of Social Media on Lodging Performance,”Cornell Hospitality Report, Vol. 12, No. 15 (2012), p. 11; Cornell Center forHospitality Research.Exhibit 11Impact of social media on operationsLoyalty of CurrentCustomers New Customers RevenuesDefinitely Increased 28.6% 28.1% 31.6%Possibly Increased 51.8% 56.1% 49.1%No Change 10.7% 8.8% 7.0%Possibly Decreased 0.0% 0.0% 0.0%Definitely Decreased 0.0% 0.0% 0.0%Can’t Tell 8.9% 7.0% 12.3%
14 The Center for Hospitality Research • Cornell Universitycial media strategy.12The activity and research online shouldbe in the context of the restaurant’s social media goals.13In contrast to the scattered approach that we foundhere, management should consider strategic social mediamarketing activities that are tailored to their market accord-ing their strategic goals. For example, a tailored social mediastrategy for an intended audience of loyal customers with agoal of increasing customer connection to the brand wouldlook significantly different from one intended to bring newcustomers to the restaurant or one intended to deal withpotential complaints.Non-participants. We found a substantial group ofrestaurateurs who were not using social media and did notintend to do so. There are valid reasons not to participate. Akey component of company strategy is the target market. Liemphasizes the importance of ensuring that the social mediaactivity fits within the larger picture of company strategy;therefore, it is logical that social media strategy would be in-fluenced by target market.14Our survey results indicate thatkey differences exist between the target market of restau-rants that use social media and restaurants that do not.Some examples of consideration of target market inthe decision process for whether to implement social mediamarketing are as follows:• Social media marketing is crucial for larger restaurants,but perhaps less so for smaller restaurants. Restaurantswith larger seating capacity usually have more signifi-cant advertising needs linked to filling each seat. Socialmedia provide a low-cost medium by which to increaseadvertising;• Restaurants that target families with children, such astheme restaurants, may glean from these results thatsimilar restaurants are not using social media;• Restaurants targeting single individuals may find socialmedia a more effective means of advertising; and• A target market in the 30–49 age range should be acompelling reason to implement a social media strategyin order to remain competitive with other restaurantstargeting those same individuals, whereas a restauranttargeting an older customer base may find social medialess effective.These scenarios provide examples of the rationale arestaurant manager may take when deciding whether socialmedia is a worthwhile investment.Regardless of whether management engages in socialmedia, every restaurateur should be cognizant of social me-12 Shan Li, “Online Community Managers Riding High–and GettingPaid,” Chicago Tribune 4, Oct. 2011: 3.13 Kelly McGuire, “Casinos Social Media—SAS,” Lecture at School ofHotel Administration, Ithaca, NY; 21 Oct. 2011.14 Li, op.cit.• Promotions and coupons from social networking sites;and• The frequency of visits by existing customers.Discussion and ConclusionsThis study found substantial use of social media for market-ing by restaurateurs, and considerable interest among thosewho don’t yet use social media. This finding supports theclaim that the social media component of a marketing planis growing in importance.11However, we found that both therestaurateurs’ goals and measurement for social media arefuzzy at best. Social media’s usefulness as a strategic market-ing tool is questionable in light of our findings. Three keyresults suggest that many restaurateurs have not thoughtfullyconsidered their social media strategy in the context of awell-defined marketing strategy:• Six out of ten survey respondents selected at least fourof the five possible social media goals provided;• Half of the respondents selected all three intended tar-get audience options—new customers, current but notloyal customers, and loyal customers—when queriedabout the respondent’s target market for social mediaactivity; and• One-third of the respondents did both; they chose fourof the five possible social media goals provided and allpossible audience targets for social media activity.Considered together, these statistics suggest that manyrestaurateurs should reevaluate their social media use toensure that it is strategically designed and executed. Oursample is a relatively small, self-selected convenience sample,and we hesitate to generalize to the industry, but it appearsthat a substantial group of restaurateurs active in socialmedia marketing have not crafted a well-defined socialmedia strategy, and approximately one-half may benefitfrom refining their social media goals or reassessing theirtarget audience. The respondents were fairly certain thattheir social media use did not harm the restaurant, but wesuggest that a poorly defined social media strategy probablywon’t help matters, and any return on the investment wouldbe difficult to calculate.Ensuring positive impact of social media marketing onoperations begins with a well-defined strategy that includesrealistic, prioritized, and workable communications objec-tives and goals. Without a clear strategy or goal, the socialmedia manager makes decisions—perhaps arbitrarily—andhopes for a positive effect. Thus, a social media managershould have specific goals and intended audiences for the so-11 C. S. Dev, J. D. Buschman, and J. T. Bowen, “Hospitality Marketing: ARetrospective Analysis (1960-2010) and Predictions (2010-2020),” CornellHospitality Quarterly 51.4 (2010): 459-469.
Cornell Hospitality Report • May 2013 • www.chr.cornell.edu 15dia activity concerning their restaurant.15Even for restaura-teurs that do not participate, an alert system would provide afoundation to increase awareness of activity concerning theirrestaurant. Somewhat surprising, it is more likely for res-taurateurs to actively check competitors’ activity than to bealerted to activity pertaining to their own restaurant. Abouthalf of respondents use an alert system to monitor internetactivity, and approximately two-thirds of respondents areactively checking competitors’ activity on social media net-works. As social media grow in importance, these activitieswill likewise become more critical. By registering for a freealert system (such as Google Alerts), restaurant managementcan receive email updates with online activity regarding theirrestaurant (as well as competitors).In addition to an alert system, restaurateurs embark-ing on social media activity will probably want to create aFacebook page, since Facebook is by far the most popularand most generally accepted social media tool by restaura-teurs. Facebook’s increasing number of capabilities and largenumber of users makes this network the natural leader. Face-book fans are more likely to redeem promotions distributedover Facebook than from a traditional mailing, for instance,thereby making promotions through this channel moreeffective than traditional promotions.16Social media activityby restaurateurs focuses on interacting with the current andpotential guests, but as the social media usage expands, arestaurant may also wish to offer promotions and link to orshare news.Beyond FacebookLooking at sites other than Facebook, restaurateurs can findvalue using Twitter, blogs, and Foursquare, as shown in thefollowing examples:Twitter. Twitter is a popular tool especially for advertis-ing promotions and is successfully used in the restaurantindustry. Its use as reported by survey respondents is consis-tent with chefs using Twitter to communicate to their guestsin real time and food trucks using Twitter to announce theirlocation. These customer interactions increase customerconnection to the restaurant.17Blogs. This study finds that blogs have the widestvariety of uses in the restaurant industry, including sharing15 Robert Duboff and Scott Wilkerson, “Social Media ROI,” MarketingManagement 19.4 (2010): 32-37. Business Source Complete. EBSCO;viewed 27 Sept. 2011.16 Nora Caley, “Can social media build your franchise business?” Nation’sRestaurant News 44.14 (2010): 20-21. Business Source Complete. EBSCO,viewed 31 Oct. 2011.17 Alina Dizik, “@Foodies: Peek Into My Kitchen,” online.wsj.com (2011)(viewed 31 Oct. 2011); and Zachary Sniderman, “How Social Media IsFueling the Food Truck Phenomenon,” mashable.com (2011) (as viewedin October 2011).videos and taking polls. This flexibility allows more diversityin reaching targeted restaurant customers.Foursquare. Foursquare is perceived to be a useful toolfor the restaurant industry because of its location-basedcharacteristic. Dunkin’ Donuts, Chili’s Grill and Bar, andMcCormick & Schmick’s have successfully used Foursquareby providing rewards for multiple “check-ins.”18Shearmanreports the value of a strong network, by suggesting thatFoursquare adds value because it uses its customers’ net-works to market the restaurant brand.19Many more social media channels exist, and every res-taurateur should consider the combination of tools and usesthat work best to achieve their social media goals.Managers of independent restaurants should take noteof our finding that independent restaurants are more likelyto use social media than chain restaurants. As we said, theseresults were surprising, since we expected that chains wouldbe more active in social media. However, what we found isthat independent restaurants believe that building strongerrelationships with their customers and their community isan essential strategy to increase visibility. In this regard, wefound that independent restaurants are more likely to use acombination of several social media tools to build relation-ships with their customers and community.The consensus, based on the academic literature, thepopular press, and survey respondents, is that restaurantsbenefit from the use of social media. Measuring that benefit,however, is a challenging task. A 2011 paper by Maggie Foxsuggested that return can be measured via sales, awareness,or chatter,20and survey respondents agreed with Fox’s as-sessment that return on social media can be measured usingnon-financial metrics.The appropriate metric must correspond with yoursocial media goals, as demonstrated, for example, by KFC’sapproach. KFC doesn’t emphasize financial returns for itssocial media program, because its goal is “to connect andengage with KFC followers, cultivate relationships, andrespond to any inquiries.21” A financial metric would not bethe best way to measure KFC’s social media success becauseits goal is non-financial. The logical, but non-financial met-rics of social media success in this instance include numberof likes, followers, and amount of chatter. These metrics arereasonable methods for measuring return when they alignwith the social media goal.18 Mark Brandau, “Cashing the check-in,” Nation’s Restaurant News 44.25(2010): 3-65. Business Source Complete. EBSCO, viewed 31 Oct. 2011.19 Shearman, op cit.20 Maggie Fox, “A little time and effort can result in a big payoff,” B to B95.4 (2010): S8. Business Source Complete. EBSCO. Web. 27. Sept. 2011.21 John Eckhouse, “Social Media ROI: Ads Provide a Big Return for KFC,”The Realtime Report. 7 Sept. 2011; viewed online 06 Oct. 2011.
16 The Center for Hospitality Research • Cornell UniversityFor many firms, however, financial return on invest-ment is a key measurement. About one-eighth of our surveyrespondents were focused on financial ROI, and market-ing specialists believe ROI must also be captured using afinancial metric, emphasizing the importance of the “bottomline.”22Apparent from both the literature and the resultsof our survey, however, is the degree of uncertainty sur-rounding how to measure the impact of social media onoperations. Over half of our respondents were not surewhether social media brought in additional revenues. Only39 percent of survey respondents indicate they are confidentthat social media use brings in additional revenues.To measure financial returns on social media invest-ment, our respondents suggested tracking the following:• Incremental gains through use of a customer relation-ship management system;22 Duboff and Wilkerson, op. cit.• Promotions and coupons offered only on social medianetworks; or• Increased frequency of customer visits.Although these are viable methods for calculating ROI,significant ambiguity about social media ROI remains. Dis-covering a method of quantifying return remains a challengefor academics, researchers, and marketers.One point demonstrated by this study is that the issuesrelated to social media are numerous, and we have touchedon only a few. Restaurateurs could consider, for example, thelink between social media and search activity as they affectgoals and performance results; reputation management; realtime service recovery; and the key role of device use such assmart phones or tablets. Finally, we must note that the bestpractices and methods for measuring social media return oninvestment—and, indeed, best practices for using social me-dia—are still in the development stage. For restaurants thatengage in social media, managers will find that their socialmedia goals and techniques are continually evolving. n
Cornell Hospitality Report • May 2013 • www.chr.cornell.edu 17Cornell Center for Hospitality ResearchPublication Indexwww.chr.cornell.eduCornell Hospitality Quarterlyhttp://cqx.sagepub.com/2013 ReportsVol. 13 No. 6 Common Global and LocalDrivers of RevPAR in Asian Cities, byCrocker H. Liu, Ph.D., Pamela C. Moulton,Ph.D., and Daniel C. Quan, Ph.D.Vol. 13. No. 5 Network ExploitationCapability:Model Validation, by GabrielePiccoli, Ph.D., William J. Carroll, Ph.D.,and Paolo TorchioVol. 13, No. 4 Attitudes of ChineseOutbound Travelers: The Hotel IndustryWelcomes a Growing Market, by PengLiu, Ph.D., Qingqing Lin, Lingqiang Zhou,Ph.D., and Raj ChandnaniVol. 13, No. 3 The Target MarketMisapprehension: Lessons fromRestaurant Duplication of Purchase Data,Michael Lynn, Ph.D.Vol. 13 No. 2 Compendium 2013Vol. 13 No. 1 2012 Annual Report2013 Industry PerspectivesVol. 3 No. 1 Using Research to Determinethe ROI of Product Enhancements: ABest Western Case Study, by Rick Garlick,Ph.D., and Joyce Schlentner2013 ProceedingsVol. 5 No. 3 2012 Cornell HospitalityResearch Summit: Hotel and RestaurantStrategy, Key Elements for Success, byGlenn WithiamVol. 5 No. 2 2012 Cornell HospitalityResearch Summit: Building ServiceExcellence for Customer Satisfaction, byGlenn WithiamVol. 5, No. 1 2012 Cornell HospitalityResearch Summit: Critical Issues forIndustry and Educators, by GlennWithiam2012 ReportsVol. 12 No. 16 Restaurant Daily Deals:The Operator Experience, by JoyceWu, Sheryl E. Kimes, Ph.D., and UtpalDholakia, Ph.D.Vol. 12 No. 15 The Impact of SocialMedia on Lodging Performance, by ChrisK. Anderson, Ph.D.Vol. 12 No. 14 HR Branding HowHuman Resources Can Learn fromProduct and Service Branding to ImproveAttraction, Selection, and Retention, byDerrick Kim and Michael Sturman, Ph.D.Vol. 12 No. 13 Service Scripting andAuthenticity: Insights for the HospitalityIndustry, by Liana Victorino, Ph.D.,Alexander Bolinger, Ph.D., and RohitVerma, Ph.D.Vol. 12 No. 12 Determining Materiality inHotel Carbon Footprinting: What Countsand What Does Not, by Eric RicaurteVol. 12 No. 11 Earnings Announcementsin the Hospitality Industry: Do You HearWhat I Say?, Pamela Moulton, Ph.D., andDi WuVol. 12 No. 10 Optimizing Hotel Pricing:A New Approach to Hotel Reservations, byPeng Liu, Ph.D.Vol. 12 No. 9 The Contagion Effect:Understanding the Impact of Changes inIndividual and Work-unit Satisfaction onHospitality Industry Turnover, by TimothyHinkin, Ph.D., Brooks Holtom, Ph.D., andDong Liu, Ph.D.Vol. 12 No. 8 Saving the Bed fromthe Fed, Levon Goukasian, Ph.D., andQingzhong Ma, Ph.D.Vol. 12 No. 7 The Ithaca Beer Company:A Case Study of the Application of theMcKinsey 7-S Framework, by J. BruceTracey, Ph.D., and Brendon BloodVol. 12 No. 6 Strategic RevenueManagement and the Role of CompetitivePrice Shifting, by Cathy A. Enz, Ph.D.,Linda Canina, Ph.D., and Breffni Noone,Ph.D.Vol. 12 No. 5 Emerging MarketingChannels in Hospitality: A Global Study ofInternet-Enabled Flash Sales and PrivateSales, by Gabriele Piccoli, Ph.D., andChekitan Dev, Ph.D.Vol. 12 No. 4 The Effect of CorporateCulture and Strategic Orientation onFinancial Performance: An Analysis ofSouth Korean Upscale and Luxury Hotels,by HyunJeong “Spring” Han, Ph.D., andRohit Verma, Ph.D.Vol. 12 No. 3 The Role of Multi-Restaurant Reservation Sites in RestaurantDistribution Management, by Sheryl E.Kimes, Ph.D., and Katherine KiesVol. 12 No. 2 Compendium 2012Vol. 12 No. 1 2011 Annual Report
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