Using Social Networks to Drive Change at Houlihan's

The March issue of Fast Company featured an article about the Houlihan's restaurant chain's efforts to recharge growth. The article describes how Houlihan's "created its own social networking site, HQ, an invite-only 'brand community' of 10,500 'Houlifans' to serve as a virtual comment card." The firm used extensive feedback from the dedicated customers on the social networking site to retool a new "tapas style" set of small plate menu items and make the place an attractive venue for young adults to hang out, eat light, and enjoy a drink.

How do you get millenials to provide such rich feedback to you? Houlihan's understood that you have to offer something in return, namely information. These fans liked the fact that they were given priority access to information about new product offerings, recipes, and the like. They enjoyed talking about the changes and felt great about the fact that the company was listening to them. Perhaps most importantly, Houlihan's found that engaging customers so intensely led these fans to bring friends along with them on future visits.

What's most interesting about the firm's approach is that they did not use a public social media platform to engage with these customers. They chose to form their own site so that they could gain exclusive access to these insights from their customers. Of course, a company can only be successful with such a private site strategy if they can attract customers to visit the site and interact on it. If you can accomplish that, naturally you can enjoy the fact that rivals cannot access the information you are gathering from consumers.

I don't think, however, that firms should rely only on exclusive sites such as this one. An effective strategy of engaging customers must include interaction on public social media platforms as well. In that way, firms avoid the risk of missing key insights and feedback that more casual customers may provide, as well as input from those people who have chosen NOT to be customers any longer for some reason.