Product Awareness and Its Value from Goose Island Beer Company
This past Saturday, my wife surprised me with an urban scavenger hunt through Boston sponsored by Goose Island Beer Company from Chicago. How could I say no, beautiful weather, drinking beer and becoming a mobile billboard for Goose Island. Throughout the hunt, all I could think about is how we paid $22.50 (through Groupon) for the opportunity to promote Goose Island’s products through the streets of Boston and create product awareness to our Facebook friends and Instagram followers. Brilliant on Goose Island’s part!
Goose Island Wild Goose Chase
The Goose Island Wild Goose Chase Boston is a scavenger hunt for five golden eggs hidden within 1 mile of Fenway Park. The hunt utilizes your smartphone by requiring you to scan QR codes, enter answers to clues and puzzles at QR code prompts, and post “sad selfie” photos to Instagram and Facebook with the hashtag #wildgoosechase when you hit a dead end. The first teams to find the eggs win prizes in the scavenger hunt.
So with a properly equipped phone in hand and a free Goose Island t-shirt on, the hunt begins. The first task is to solve a puzzle by identifying Goose Island beers from the brewer’s notes, which is the start of your product education. Once you know your beer basics, a clue is revealed and you race to the first destination where you find a clue sheet that will lead you to the eggs. The clue sheet consist of forty questions about Goose Island’s company and beers, as well as local landmarks and watering holes. These clues lead you to twelve bars with Goose Island beer challengers. For instance, one challenge required teams to identify the Goose Island beer based on the look, smell, or taste. Others required them to determine which chocolate and cheese paired best with a specific Goose Island beer. At the end of the hunt, everyone reconvenes at the starting bar and enjoys a Goose Island beer, thanks to the free Goose Island beer token.
In 2011, Goose Island Beer Company was purchased by AB InBev (in my opinion, so the beer giant could benefit off of the craft beer revolution). The purchase gave this Chicago based company access to the distribution power and channels of AB InBev. Now, Goose Island is in every U.S. state, Puerto Rico and three foreign markets, but without product awareness the product will not succeed. Marketing events like this are critical to supporting the products. So, let’s review the product awareness metrics for the hunt!
- Potential Reach: The number of people who use, hear, and see the product. There are three categories of users in the Wild Goose Chase. First, the 174 people (eighty-seven teams with two people per team) who used the product through drinking challenges and free Goose Island beer tokens. Second, the people who heard about the product through Facebook and Instagram posts. Based on a Pew Research Center study the average number of Facebook friends a user has is 200, and with each team posting photos to one Facebook account we can estimate and audience who heard about event is 17,400 people. Finally, the people who saw the event: those in the cars, at bars and on the streets of Boston who saw 174 crazy people running through the streets in Goose Island Beer Company t-shirts.
- Inbound Links and Subscribers to Content: The amount of web traffic and new followers to the products. The measurement of website traffic after the initial knowledge collection period to answer the forty clues. Next, track the trendiness of hashtags like #wildgoosechase. These metrics will provide an indicator to new eyeballs to Goose Island beers.
- Super-users and Recommendations: Those who use and recommend the product. In the course of 2 hours, Goose Island created 174 super-users who could speak to the beers through brewer notes, smell, taste, and experience, all while learning about the brewery’s history, details about product name origins, and brewpub locations. Please note that Boston is just one of thirteen events, and in total these hunt could produce 2,145 super-users (13 cities * 165 average super-users). If these super-users like the beer, what is going to stop them from recommending it to others as they have just invested two hours in experiencing and engaging the product?
- Brand Recognition: The increase in the public recognition of the product, accomplished by surveying and reengaging. Two days after the scavenger hunt, Goose Island sent all of the participants an online survey regarding our awareness of the products before the hunt and inquiring if we learned something about the beer and company. Ideally, Goose Island will reengage each super-users with a follow-up bar event and a second survey asking questions about product usage and brand perception since the hunt.
- Conversion: The increased use of products. Conversion is key to any product and is the final indicator of product awareness. Goose Island will measure product awareness through consumer conversion, which is increased sales.
Value of the Wild Goose Chase
Product awareness all comes down to conversion, but what you spend for that conversion will determine the value of your product awareness efforts. Let’s assume the scavenger hunt cost about $7,000, which includes Groupon’s advertising fees, labor costs, product giveaways and prizes. The event generated roughly $2,000 from the Group On, which brings the net cost to about $5,000. This means the customer lifetime value (LTV) of these 174 participants needs to exceed $5,000 in order for the product awareness campaign to be effective. To determine the customer LTV, we need to know the revenue generated per beer, the gross margin of the beer, the number of beers each customer will consumer in a year, an assumed customer retention rate, Goose Island’s discount rate (cost of capital), and finally the lifetime of a customer. Here come the numbers: assume each participant purchases a twelve pack over the course of each year for five years, the price per beer is $1.67 (the bar price of a beer is $5 and let’s say the bars marks up the beer 3 times) at a 50% gross margin (roughly Sam Adam’s gross margin in 2013), with a retention rate of 60% (number of repeat customers each year), and the discount rate is 9.3% (AB InBev’s cost of capital). The resulting customer LTV is $4,670, which indicates Goose Island’s product awareness campaign is successful to a degree but is short of the desired value of $5,000.
But Goose Island’s return doesn’t stop there! This analysis of the product awareness value does not take into account the network effect of Facebook friends and Instagram followers. Contact us at www.prosperityanalytics.com to see how the network effect impacts the value of this product awareness campaign.