Everyone talks about using Facebook as an essential marketing tool, but for Rayne Longboards, a Vancouver-based manufacturer of downhill skateboards, using this social media platform in its year-end sale was leading toward a major wipeout.
When marketing and sales manager Les Robertson launched Rayne's first international year-end sale online in 2010, he soon realized that shipping individual boards overseas was too expensive for most buyers. If he could reach customers to ship in bulk, he could make it both cheaper and easier for them to purchase his company's boards.
However, when he tried to co-ordinate bulk buys over Facebook, it just didn't work. The platform doesn't allow for timely, open interaction between people who aren't already friends, so Mr. Robertson couldn't support far-flung customer groups.
He needed a new online solution to make his sale a success, offer improved service and protect Rayne's reputation.
Based on Vancouver's North Shore, Rayne is a globally recognized brand known for premium-performance downhill skateboard products. Its pro team competes around the world, consistently ranking among the top 10 riders.
When Rayne was established in 2006, most downhill longboard enthusiasts were considered amateur. Six years later, the sport has grown substantially. Longboarders now range from casual commuters to professional, sponsored downhill racers. This strong niche market stays in touch mainly via online forums.
Rayne annually receives thousands of requests for discounts on its premium boards. Its year-end sale allows it to do just that by cleaning house and selling excess stock to make way for new products.
"Our annual sale allows us to meet some unique demand from both brand loyalists and price-sensitive customers looking for a deal on a premium product," says Mr. Robertson, an MBA alumnus from the Robert H. Lee Graduate School at the Sauder School of Business at the University of British Columbia.
"As the sport has grown, so has our production," Mr. Robertson says. "With the increased volume and rise in global demand, we felt it was important to open our sale up to the whole world, and not just our region."
As the 2010 Rayne year-end sale began, there was an online frenzy. Mr. Robertson and his team used a Facebook e-commerce solution, Payvment, to manage 24-hour-a-day sales and customer service.
However, the firm faced an immediate negative response from international customers to expensive shipping rates from Canada.
"Our international customers expressed concern that we were profiteering by inflating our shipping costs," Mr. Robertson recalls. "They saw prices that said half off, but calculated an absolute value that they felt was egregious."
Via Facebook, the Rayne team could only respond individually to people commenting on its page wall, rather than address them in groups by targeted geographical areas.
"I started to realize we were going to lose our international customers if we didn't do something fast about the cost of shipping, as this could have further reaching impact on our brand equity," he says.
Mr. Robertson rapidly refocused his communication efforts on niche online forums where longboarders traditionally converse. He needed a way to say, "Hey Brazil," or "Hey Mexico, I'm shipping 100 longboards – who wants one?"
Mr. Robertson and his team started to actively participate in regional forums, such as those for the Australian Skateboard Racing Association and the Longboarders Guild of Malaysia. They joined or started discussion threads to address the sale and customer concerns.
"Within hours, we connected with 11 countries and worked through six different forums to manage customer service," Mr. Robertson says.
He also redirected the existing, individual Facebook conversations about Rayne's year-end sale to the group-oriented discussions in these forums.
Through the forums, Rayne was able to locate and chat with customers in similar regions, and then arrange to group-ship the product to agreed addresses in local areas, boosting consumer confidence and lowering the cost per unit for shipping to each customer.
Moving swiftly to combat the negative response to its 2010 year-end sale, Rayne Longboards co-ordinated cost-effective group shipments to international customers and saved 98 per cent of its international orders from being refunded.
That year, Rayne shipped 40 per cent of the sale internationally, and refunded just two of the orders placed. While the year-end sale was a moderate part of the company's annual overall revenue, a backlash through social media would have been very public, and its brand would have been threatened.
Instead, it was turned into a success.
"Longboarding, I think like many niche sports, generates a close-knit community," Mr. Robertson says. "The real bonus in all of this was connecting people via group shipping who knew each other online, but didn't realize they were geographical neighbours."
With a rocky experience in 2010, Rayne was more pro-active in 2011. Mr. Robertson made sure Rayne's profile in regional forums was up-to-date; the sale was promoted in advance, and monitored during peak hours.
"In the 2011 year-end sale, we sold 90 per cent of our inventory in 24 hours, with only a handful of issues to resolve, compared with us taking two weeks to sort out problems in 2010," Mr. Robertson recalls. "Plus about 70 per cent of our 2010 customers returned to purchase in 2011."
Mr. Robertson says that, thanks to finding the right channels to connect with customers, Rayne's brand equity has never been higher.
"I definitely feel like we are well-established for 2012 and, with our increasing volume and demand, we'll likely hold two sales this year."
Special to The Globe and Mail
Paul Cubbon is a marketing instructor at the Sauder School of Business at the University of British Columbia.
This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.
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