Marketing With a Longer Time Horizon 📈
I am a regular user of the phrase “what you put in is what you get out”. Newton’s third law of motion uses a related principal that “every action has an equal and opposite reaction.” While both are true when investing in the marketing of a craft brewery, many stumble over the delayed reaction that can take place. The beer industry generally does not work like e-commerce and digital ad spend, where customer acquisition costs can be calculated to the penny. Instead, brewers must learn to invest with a longer time horizon.
The Fish Bar Story
Back in 2012, my wife Alma and I decided to check out a new restaurant in the Lakeview neighborhood of Chicago called Fish Bar. It was a small plate, fresh seafood concept with a lot of rotating specials and experimentation going on in the kitchen. There was a thoughtfully assembled 8 draft lines and I remember being impressed at their beer offerings. We had a really nice time, the server was engaging, and the food was fantastic. We ordered familiar sounding plates that we knew we would like and took some risks in less familiar waters. The visit was a big success and the server handed a few well-designed cards for a free cocktail for the next time we came back.
Within a month or so, a couple reached out asking if we wanted to grab dinner and if we had any recommendations. As a creature of habit, I suggested Fish Bar, not because of the free cocktail so much as the confidence that our friends would be equally as impressed. Upon arrival, we stood in the waiting area and I happened to lock eyes with our last server, while finishing up at a table. She gave a big excited waive and walked over saying, “You’re back! Thanks so much for coming to see us again.” When we got seated, a different server came over to introduce himself bringing with him a small plate that I didn’t recognize. “I heard you were here not too long ago, so welcome back and thanks for bringing some friends,” he said. “Here is a new dish that we didn’t have last time. We would love for you to try and see what you think. On the house.”
Our friends shot us a “look at you at you guys!” look and we could only adjust our pretend necktie and dust the dirt off our shoulder. We went on to have a wonderful time, even better than the first due to this elevated feeling of being special and appreciated. Many more trips to Fish Bar ensued, including a 3rd trip where that second server remembered me saying I worked in beer and brought me out a sample of the Stone Vertical Epic he’d just brought in. Beyond the many visits that we made, our experience wound up in countless water cooler conversations at work and some social media check-ins with glowing reviews for all of our friends to see.
Fish Bar had a clear strategy of building loyalty, word of mouth, and repeat visits. Their staff was given tools like the free cocktail cards and the flexibility to comp out a small plate or beer sample to a returning guest. The cards would help signal to the server that the customer was there previously and initiate the “welcome back” and outpouring of appreciation. As a customer, boy does that feel good sometimes. From the server perspective, they have a chance to earn better tips in the short term for the superior hospitality. In the longer term and much more importantly, they’re contributing to full tables and consistent volume for their tip pool by helping the restaurant build and maintain long term demand.
Portfolio Approach
Since we’re talking about investing, I like to think about managing a Taproom’s draft list or brewery release schedule like I would a stock portfolio. You want to have some sure bets that are trustworthy and welcoming to new, risk-adverse customers. Next are the offerings that deviate from the obvious, add more upside, give the brewery it’s personality, and showcase its point-of-view. These “mid-markets” represent the next jumping off point for the more adventurous customer and showcase the brewery’s intention and range. Finally there’s the more “out there” choices with a high risk and high reward, not necessarily wacky, but potentially underrepresented or innovative styles.
A few tap handles reserved for these “growth stocks”, or small pilot batches aimed at saying “yes” to employee proposals, has the ability to serve many positive outcomes. A lift to morale can occur by ensuring ideas have the regular ability to be heard and sometime end up pouring on tap at the brewery. This can lead to positive morale and a feeling that the next big thing could come from anywhere in the company. Then when beer concepts come from beyond the production team, employee education can take place during the production process leading to a more well-rounded, engaged team who better understand what goes into developing and perfecting a recipe. Lastly, unlocking outside-the-box ideas without the preconceived notions that often surround decision-makers can serve as a welcome breath of fresh air. I mean, this is how the Flaming Hot Cheeto was born!
Whether it’s a new IPA concept from the HR Manager or a Smoked Helles that your Cellar team has been dying to brew, reserving a little space for these “risky” or unproven styles with backstories gives the bartender more ammunition to share with customers. By employing Fish Bar’s strategy and offering free sample pours, returning customers get a risk-free opportunity to expand their horizons, try something new, and get a little story-telling. The extra framing by the bartender can better set the scene and increase the chance of opening a customer’s eyes to something they would have otherwise never tried.
By broadening the perspective of your fans, you build the reputation and trust of the brewery overall, not just toward a single beer or series. My dream customer is one who says “I’ll have the Revolution” when they see our fist tap handle at a bar, not “What’s that Revolution beer?” With the former, we’ve earned their trust to the point that they don’t care which beer it is, and while a long shot in most cases, that’s a beautiful goal to aspire to.
Quit Selling on Social Media
Social Media in craft beer was historically very transactional. “Here is a beer that was just released, come buy it or look for it at retailers.” Today this strategy still very much exists, but without the volume of “likes” and “comments” that they used to generate. Breweries will say that they are getting “Zucked” (Mark Zuckerberg) or “Musked" (Elon Musk), as in, their account is being shadow-banned because they’re not paying for ads. But that’s just not true…
Social Media platforms need you keeping users on their platform by helping not running out of good, relevant content, but they need to also protect their users from bad content that could result in giving up and logging off. So if the first handful of followers seeing your post are just zooming past it, thats telling social mediums that the post is probably selling too hard, or just not very compelling. So the content naturally gets downgraded in priority. While craft beer fans still absolutely want to know what’s new, they are equally interested in being entertained or intrigued while scrolling.
Tiktok failed to load.Enable 3rd party cookies or use another browser
Breweries who take a more patient approach to their social media by creating content that’s more interesting and less of a sales pitch have a better chance of holding their followers’ attention. By adding value in their content, they have a better chance of building loyalty in the long term. This can be done through beer education, behind the scenes access, “inside baseball”, or creating beer adjacent content around topics that fall under the theme of the brewery or its culture, hometown, and branding.
One way that we go about this challenge at Revolution is through our The Neighborhoods video series. We strive to be “Chicago’s Brewery” so we talk about the city’s different neighborhoods and take time out of our schedule to tell interesting stories about all the many different places we sell beer. These videos rarely ever mention or feature a Revolution product, but originate from our account. This type of story-telling doesn’t lead to immediate beer sales. Instead it’s an investment into building rapport with our fans over a shared appreciation for Chicago, in hopes of future dividends.
Realized Gains
Marketing spend needs to be thought about like compound interest, the interest made not only on your investment, but on the interest itself. When sampling out a beer at a store, the short term viewpoint is simply calculating how much time was spent versus how many customers bought the product after tasting. But the real beauty of samplings are those interactions that led to a new loyal customer who is going to buy a four-pack every month going forward. With those wins in mind, the ROI becomes impossible to measure, but when a brewery has conviction and consistently executes a series of these long term strategies, interest in the brand is going to compound over time setting up a loyal customer base. Those who can’t afford to think this way and feel every investment should yield an immediate 1:1 benefit must be prepared for the rug to be pulled out from underneath them.
Really interesting piece and lots to think about. My initial thought, though, is about your experience at Fish Bar. It seems to me it's less marketing and more about customer service and making you feel valued. Maybe that's just another name for marketing but I know I'm much more likely to come back to a hospitality place where the customer service is excellent.