Is your craft beverage business taking a defensive posture during these weird times, or aggressively going after new drinkers? For all the right reasons – inflation, recession, COVID, politics, life – producers may choose to duck their heads in the sand and wait this one out, and that’s okay! You may not break any sales records this month, but you’re keeping the lights on which is important. Just know your peers/competitors are in the same boat, but many have decided to double-down on advertising to capture more share of the market. The result? You may be playing catch-up in the fall after they’ve poached some of your regulars…
But advertising is too expensive for my business, you might contend. The product sells itself, right? We’ve got the best tasting room staff, so we’ll grow through word-of-mouth referrals. There are plenty of reasons NOT to spend money advertising your business. But the one in favor that is difficult to argue:
Paid advertising exposes your beverage business to new drinkers with speed and scale not possible organically.
Lots of businesses talk in terms of customer attrition rate: the percentage of customers lost during a time period. Let’s say 40% of your business is regulars – people who visit with some predictability. You may lose 1% of those each month to attrition (nothing personal, perhaps they just wanted to try someplace new). If you’re not making up for that loss each month, it’s easy to see how your traffic and sales could quickly drop off. With organic promotion, like social posts, a mobile-responsive website and minimal press release activity, you may recoup some if not all of the loss, getting you back to zero. Unfortunately, net zero growth is not sustainable for a craft beverage producer in today’s competitive environment. Which is why the team at Market Your Craft recommends finding 3 or more new drinkers to replace every lost one. Paid advertising is the only practical way to achieve that.
“Paid advertising” is a pretty broad bucket that could mean a lot of things. Digital advertising includes search engine marketing or banners across ad networks. Social media advertising uses boosted posts, ads and influencers. Traditional advertising introduces radio, print and TV opportunities. And the list goes on. Start with a specific goal in mind, for example driving foot traffic to your tasting room, then decide where and how to advertise. That helps take emotion out of the decision, clearly defining what success looks like and how to measure it. This was the case recently with a client who wanted to test the theory that an increase in Facebook Page Likes would necessarily result in traffic and sales for their brewery.
a practical example
It’s widely known that social media platforms pay more attention to you once you’ve reached a certain threshold of followers and engagement. If you have over 10k Facebook Page Likes for example, you likely will show up more often in drinkers’ feeds with both organic and paid content. If you’re shy of that number, your goal may be to increase Page Likes by 10% before the end of the year. To do that successfully, a craft beverage business must set aside advertising dollars to cover. If you’ve already got a budget dedicated to this type of promotion, you’re well ahead of most in your peer group: advertising is often lumped in with operations and is the first to go when needed for something else. If it’s budgeted at all! There are a number of practical ways to earmark money for advertising:
- Percentage of Sales: a percentage of past or expected future sales. Could be seen as too conservative if looking backwards, or not practical if looking forwards. Try to find a middle ground.
- Campaign-Based: starting at zero and building the budget based on project needs. Useful when the business does not yet have dedicated dollars for advertising.
- Competitive Parity: spend up to what you know or believe your competitors are spending (it’s likely a guess, hard to know for certain).
- Market Share: spend what is necessary to achieve similar sales in your geography to your peer group. Think about it this way: how many customers do your competitors have on an average Thursday? Extend that out 30 days, for your own tasting room as well as your competitors, and your portion of the total is your market share (more or less). Even better if you’re selling in stores and you have access to retail scan data.
- Unit Sales: use historical advertising cost to build a budget based on desired number of items sold. This method may be the easiest to calculate, but tends to reflect outdated media cost (both on the high- and low-side).
- All Available Funds: basically, pouring any profit back into advertising. It’s bold, but doesn’t help to build up reserves or other departments’ budgets.
- What’s Affordable: the least-structured budgeting method, largely based on the risk tolerance and business savvy of the owners and management (aka gut feel). Hard to make objective advertising decisions within this framework.
The client in our example hadn’t previously budgeted for advertising, so we suggested the campaign-based budget method. Read on for the steps needed to build a budget from the ground up.
increasing Facebook page likes
Remember our client wanted to test the theory that a 10% increase in Facebook Page Likes by the end of the year would help spur traffic and sales. So, the team outlined those on- and offline tactics that would prompt visitors to take action. Some may be obvious, others more of a stretch. Some may cost money, others time (which often is just as valuable). But all building blocks for a bottom-up approach to budgeting:
- Post relevant content: focus on those areas of most interest to your audience, such as events, food options/trucks, team and product releases.
- Change your Facebook Profile Cover image: this is arguably the most important image on your Facebook page, but often the most overlooked, outdated or just plain uninteresting. Facebook has guidelines for image size and content, however experts recommend a maximum size of 2037×754 pixels; a minimum size of 851x315px; and an aspect ratio of 2.7:1. Think lifestyle imagery to help potential visitors see themselves enjoying a drink in your tasting room.
- Prompt Liking your Page on receipts: use a line or two on a printed or emailed receipt to promote your Facebook @handle. For example, “Like @handle on Facebook for new releases, events and discounts.” The thank-you screens on POS kiosks also allow for customization – see documentation for Square, Toast, Arryved, GoTab and Clover.
- Add social cues to the tasting room: find clever ways to incorporate Facebook promotion into the guest experience including signage, stickers, table tents, posters, digital displays and to-go packaging.
- Invite your team to recruit: ask each team member to invite 10 new friends to Like your Page.
- Participate in relevant Facebook groups: using your official @handle, Like and comment on professional groups related to your industry, including suppliers, associations, enthusiast groups and hobbyists. Remember NOT to use your personal account when posting on behalf of your company!
- Engage with peer/competitor Pages: share good karma with others in the craft beverage industry. Again, using your official @handle, Like and comment on competitor posts including new releases, awards, expansion and milestone moments.
- Conduct a gift card giveaway: consider a nominal gift card amount – $25 for example – to be handed out monthly to a randomly-selected fan who publicly Likes your Page. While it’s a bit of a manual process to administer, it’s a fun and engaging tactic to build followers over time.
- Pin a discount to the top of your Page: how about a standing $1 social discount on any beverage purchase? Post the discount, plus any instructions for redemption (make it easy) once a month and pin to the top of your Facebook Page Timeline.
- Stream events live: you likely already have a calendar of events which includes live music, games, parties and others. Why not extend the reach of your event by inviting your Facebook followers to join you online? Liking your Page is the natural next step, ensuring they see more of you in their feed in the future.
- Create a press release: designing a press release template for your craft business makes it easier to share news with industry journalists. Once a journalist writes about you, they often Like your Page to receive updates in their feed that could provide content leads for more storytelling.
- Leverage Facebook Stories: live or scheduled video content can be used for short-form product announcements, event invitations, team member updates and other relevant news. Stories are fleeting however, so grab attention and deliver your message quickly. While active, these can be promoted to new customers just like ads and boosted posts below.
- Boost high-performing posts: if a post receives above-average engagement, or it’s timely and topical, consider putting $25-50 behind it for a period of 3-5 days. Choose your audience wisely, selecting the age range(s), geographies, behaviors and other characteristics that best represent your target. Remember to use Page Likes as the objective of your new ad.
setting your budget
When you take the time to budget out any promotional activity, it’s easier to measure the return on your investment. We’ll use our client example to show how production dollars and hours get assigned to the various tactics recommended to increase Facebook Page Likes by 10% during August. Your campaign-based budget may look different for any number of reasons: more events, bigger giveaways, using agency partners, etc. And remember this only represents cost and hours linked to increasing Page Likes, not general, day-to-day promotional efforts. When you tease it out in this way you can look objectively at your spend and whether or not to repeat the effort in the future.
Campaign: 10% Increase in Facebook Page Likes
|Post content, prompt to Like Page||$0||1.5|
|Change your Facebook Profile Cover Image to show energy and activity in the facility||$0||1|
|Prompt Liking Your Page on receipts, checkout kiosks and tablets||$0||.5|
|Add social cues to the tasting room with signage, stickers, table tents, displays||$200||1|
|Invite your team to recruit 10 friends to Like Page||0||0|
|Participate in relevant Facebook groups in your industry||$0||2|
|Like/comment on posts for peer/competitor Pages||$0||2|
|Conduct a gift card giveaway from Page Likes||$100||1|
|Pin a standing social discount to the top of your Page||$100||.5|
|Stream live music events and parties to your Page||$0||4|
|Create a press release announcing a new product release, anniversary party, collaboration||$0||2|
|Leverage Facebook Stories for real-time content||$0||4|
|Boost high-performing posts to select audiences, geographies||$100||.5|
Carefully track how many new Page Likes result from the effort. Compare your month-end ticket count and revenues to last month and last year as a baseline to determine your lift in traffic and sales. If you’re trending positive, and you don’t have any other paid advertising out in the market, then you can attribute a [significant] portion of the increase to your campaign! Otherwise, divvy up your gains across each of your active campaigns for a representative view of which is working hardest for you.