by Lili Petkova
| Jun 26, 2012
How can you use location based services in your online marketing strategy?
There’s a rumour that social media will gradually overtake conventional marketing. Too bold to be true, right – but you should give it some thought. When talking about using social media as a marketing tool, we can’t skip location based services. They have been growing faster and faster in the past 3 years – faster than social media ever did. And the penetration of smartphones on the mobile market is growing every month – in different countries with different speeds, but the trend is obvious and inevitable. With the growth in usage of smartphones, the number of users of location based services grows, too. The trend is clear – and if you want to be where your customers are, if you want to understand their needs and, most importantly, to make them loyal to you, your business needs to use location based services.
But which one? If you google the most popular ones, you’ll read about Gowalla, Yelp, Foursquare, Layar, Brightkite, and even Twitter and Facebook. Definitely for business, Foursquare is the right choice. If you’ve never used it, now’s the time. Becoming a user of a location based service is the only way to understand if it’ll be useful for your business or not, to see what people are doing there and how your customers behave in that network. Download the app to your phone and start checking-in, exploring the world around you, and getting tips from your friends about which places they believe are the best places in your city.
But what exactly is Foursquare?
Foursquare is one of the fastest growing social platforms. In 2010 it grew 3,400% and had 6 million users. In April 2012 Foursquare had over 20 million users and over 750,000 businesses using their merchant platform. You’ll say that 20 million worldwide is not so impressive, and you’re right. But you know the rule – in most cases quality is more important than quantity. Who are “typical” Foursquare users? They’re from the so called group of “early adopters”. They want to try everything new; they’re the ones who make things trendy. Their friends value their opinion and are usually asking them for advice regarding a bunch of themes. They’re the ones who have influence in their family and among their friends and colleagues. Early adopters are the customers everyone loves and fears at the same time. They can benefit your business by attracting a lot of customers for you, or exactly the opposite – they can ruin your reputation from the beginning. So you need to be careful with them and try to win them over to your side. Now, before everybody starts using Foursquare, you can find the early adopters there – like it was at the beginning with Facebook.
On Foursquare, users check-in to identify their physical location at the moment. This way they make a connection between the offline and online world. The friends of a Foursquare user may go to a restaurant, where the Foursquare user has checked-in yesterday, because they trust his or her taste and find the places that she or he goes enjoyable. Every location is categorized and has appropriate information such as address, web address, phone number, etc. Locations are created by the users themselves. Users leave “tips” about locations to let other users know something useful about them, for example, that the mojito is good in this bar, or that the service is really slow at this bank. Foursquare users can explore the area around them to see tips about places nearby if, for example, they’re wondering what cafeteria to go to. Users collect badges – badges are earned for a specific action, such as 3 nights in a row in bars. This is the user kind of view for Foursquare; but what about the business view?
Benefits for your business – not really the check-ins
Checking-in at your location won’t make your customers buy more. The value of Foursquare is in the data that you get about your customer’s behaviour. You can use this data to get to know your clients better, to understand which offers work for them, to reward your loyal customers, to give them a reason to tell their friends about you and to bring more customers to your business. The user that checks-in at your place is saying to his online friends “Hey, I’m here, I like this place”. So basically it’s all about engagement and strengthening the connection between you and your clients.
One of the most important things about Foursquare is that it’s completely free. The only thing that you need to invest is your time. Don’t be scared – it won’t take much. And it can be well worth it for your business in the long term. The real potential of this social network is for small and medium size businesses – even the Foursquare team admits that SMBs remain the core of the network in its business aspect and that SMBs are utilizing the service best. The logical question is: can any size business benefit from location based services? When we’re talking about localisation, the business needs a location, right? Well, not always. Let’s see what Foursquare is offering for different types of business.
Shops, hotels, bars – or any other place with a physical location
Foursquare offers great options for merchants. For example you can create “specials”. A special is an offer to users that take specific actions on Foursquare – checking-in during 5 and 6 pm at your place, coming for the fifth time, coming together with two friends, etc. You can create specials that work for you – for example if your bar is half full between 7 and 8 pm, offer a 20% discount for every user who checks-in during this period, and you’ll find your bar full earlier than you’re used to.
Users see the specials in the places they are near, so sometimes they will choose a shop just because it’s offering them something more. The best specials make users feel special (no wonder) – things available only for Foursquare users. Offer them something exclusive, give them a reason to come by and they’ll come back to you. And the good thing about specials is that customers can’t cheat – Foursquare operates based on the physical location of the user’s phone, so you and your phone must be where you say you are.
And love your Mayor! The mayor is the Foursquare user who visits your location the most – in other words, one of your most loyal customers. People tend to fight over becoming a mayor – so encourage them; fighting for the mayorship means more frequent visits to your place. Give your mayor a 20% discount every time he or she comes to you, for example.
Brands without physical location
If you don’t have a physical location, you don’t have many options on Foursquare, as it’s a location based service. But you can still build your presence on this social platform with a business page, and be there, where your customers are. Benefits in the form of short term increases in sales or developing a loyalty program are not possible, but you can build your brand awareness, which is profitable in the long term. Your page has followers – so your customers can follow you to see the tips that you leave for them at different places.
Let’s say you’re distributing coffee in your country. You can leave tips in every coffee shop and cafeteria where customers can find your coffee, the tip being to try the coffee because of its unique taste – the taste of vanilla in one of the products, for example. Don’t leave just this kind of tip though. Get an understanding of where your customers or potential customers go and leave a tip at these places too, so that they see you more. In this way, people who don’t know anything about you may become interested and look for you on the internet. Be interesting and encourage people to look for your useful tips.
There’s another option for brands – creating badges. But, if you’re not the size of Coca Cola or Starbucks, you most certainly won’t be able to get your own badge. And it doesn’t make a lot of sense for you from the business point of view anyway. So don’t waste your time thinking up a creative idea that Foursquare might approve a badge for – go out there and leave tips for your customers instead!
And back to the fundamentals: the analytics
Foursquare offers an analytics service that lets you monitor the profile of users who check-in to your place. You can see the male to female customer ratio, who your regular customers are, popular times of the day when you get the most check-ins, etc. Analyze these results and use them not only for creating specials on Foursquare but also in your overall marketing strategy. It’s valuable information that you get only by joining your business on Foursquare. You might be surprised by the results and get a different point of view on how you can optimize your business. And again, analytics are completely free.
All these efforts on marketing in Foursquare might not show their results in terms of money immediately. Be patient – brand awareness, customer loyalty and engagement are things that you should really work on and they will pay back in the long term. You’ll not only work for the loyalty of your clients, but you will gain new customers – their friends, friends of friends, etc. It’s location based social networking! In fact, Foursquare recently launched their completely new app, and they’re getting even more social…
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