How can social media help your small business grow
July 19, 2010
As part of our continuing series featuring our employees, we're turning you over to Dan Yoo. Although many of our employees would describe themselves as entrepreneurial, Dan channels his passion as a foodie into investing in a brick and mortar business — a restaurant in the Financial District of San Francisco called Stone Korean Kitchen. Here he talks about how social sharing helped him increase sales in a measurable way.
When I started at LinkedIn about a year ago, I expected the work to be challenging and exciting. I was right. In addition, thinking about and working with social technologies has had a huge impact on how I and my fellow investors (including my colleague, Robby Kwok) promote Stone Korean Kitchen, a project we started with a third partner who runs the business full-time. We actively engage through our company page on LinkedIn and similar business pages on Yelp and Facebook. Also, we broadcast news and promotions through Twitter, Foursquare, Facebook and Yelp to drive business to the restaurant. These social channels also help us find out what our customers think about us, and we use the feedback to address problems.
Perhaps the best example of the effect social media has had on our business is our most recent experience with social sharing through Groupon. Groupon is a service that enables companies to offer great discounts in bulk. The coupon only goes into effect if enough people purchase it. We were lucky enough to be featured as a San Francisco Groupon, and we sold 2,600 coupons as a result. This gave a huge boost to our business -- our post-groupon revenue was, on average, 63% higher than our pre-Groupon revenue over the same amount of time.
You can see the initial spike in revenue in the graph below. That's to be expected after distributing a coupon. What we found even more interesting was the “new normal” that resulted. Even after the bump from Groupon, our revenue has leveled off to almost 50% higher than before.
There are a few contributing factors to this, we believe. One is simply repeat customers, but the other is all of our social media efforts combining to create a viral spread of knowledge about Stone Korean Kitchen. After the Groupon bump, we got double the number of Yelp reviews each month than we had in the months prior to it. More Yelp reviews gave us added legitimacy and further boosted our ability to draw in customers. It was the online equivalent to walking by a crowded, bustling restaurant. If that many people are enjoying it, they must be on to something.
While it's a lot of work to keep up with all of the activity in two such different worlds, I like how they interact with each other. I can bring my own expertise in high tech to the world of small business, and as an entrepreneur I am more aware of how much social technology increasingly now matters to small businesses around the world.
Also check out TechCrunch's coverage of small businesses that features Dan and Robby's social sharing experiments as a small business.