The Daily Californian Online

New Berkeley Businesses Use Social Media to Attract Clients

By Hannah Moulthrop
Contributing Writer
Wednesday, October 6, 2010
Category: News

Cinnaholic, located in Downtown Berkeley, creates custom-made vegan cinnamon rolls, which the store promotes through social media.

Amid challenging economic times, recently opened Berkeley businesses are attempting to cope with costs by utilizing up-to-date social networking methods in their advertising strategies.

Providing an alternative to the many ice cream and frozen yogurt businesses in Downtown Berkeley, Cinnaholic attracts sweet–toothed customers to their custom-made vegan cinnamon rolls, primarily through Internet advertising.

Since its opening on July 17, the business has created a community of customers through co-owner Shannon Radke's blog, a Facebook page and a Twitter account updated daily.

"(Social media is) increasing in significance as a marketing tool," said Michael Caplan, the city's economic development manager. "It's less expensive and builds a sense of loyalty."

Reaching potential customers through the Internet is a particularly effective advertising tactic for the business, located at 2132 Oxford St. across the street from the west side of UC Berkeley.

Despite Cinnaholic's Internet outreach efforts, which include responding to any negative customer reviews on Yelp, business was initially slow, according to Florian Radke, co-owner of Cinnaholic.

"Honestly, we thought it'd be a little busier," he said, adding that most traffic passes through Center Street rather than past his business.

At the end of last month, Florian Radke and his wife tapped their customer base for financial support when they realized they were $5,000 dollars short of breaking even for the month due to unexpected expenses and a lack of sales.

"We started a promotion where customers could buy gift certificates for $20, $50 or $100, and when they redeem it in December, it's worth 15 percent more," Florian Radke said.

The promotion was successful, and they were able to break even, he said.

Saturn Cafe - a vegetarian diner around the corner from the shop - opened its doors the same day as Cinnaholic and also uses social advertising techniques.

"For businesses targeting a young, tech-savvy customer base, Internet advertising may be the most cost-effective method," said Tristan Nathe, co-owner of the diner.

At the diner's Santa Cruz location, the owners use print advertising to attract customers. But the tight budget at their new Berkeley location requires them to rely on Facebook, Twitter, Yelp and events held on- and off-site, according to Nathe.

The two businesses' recent openings contribute to the decline in ground-floor vacancies in the Downtown area in the past year, according to Caplan.

"We've seen a lot of entrepreneurship despite the economic climate - the economy is both a challenge and an opportunity to businesses," he said. "You can sometimes get spaces at a lower cost and machinery at lower rates."

The space occupied by Cinnaholic and its recently opened neighbor Ironwood BBQ was previously filled by a Ben and Jerry's franchise, which moved to Center Street, according to Elizabeth Delgado, community development project coordinator in the city's economic department.

"In these times, we're making do with the small, limited space we have," said Marcele Kutkauskaite, owner of the barbecue, who described a larger space as an "extravagance."

Like its neighbors, the business employs social media as a cost-effective form of advertising through their blog-based website, Facebook and Twitter accounts as well as by word-of-mouth.

"As opposed to an ad that's a one-sided thing and doesn't allow anyone to interact, our advertising means to engage with our customers," Kutkauskaite said.

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