Bringing Marketing on Foursquare Into Focus

by Lyell E. Petersen on Jun 15, 2010

Foursquare is getting a lot of attention these days, not just because of their meteoric growth, but also for being at the forefront of enabling businesses to market and promote with their location-based service. The promise of marketing with Foursquare is that it “will empower you to develop more engaging ongoing relationships with [your] customers” but the cost and risk involved make achieving this much harder than it sounds.

Many businesses, including Starbucks, are testing how well marketing with Foursquare works with check in promotions and “Mayor Specials” that focus on the individual, but the reality for most business is that Foursquare’s value is in more community-oriented marketing.

Foursquare Limitations

Essentially, Foursquare marketing creates a loyalty program, but one that’s only available to Foursquare users. Businesses must consider how much of their market is actively engaged in Foursquare. There are only about a million total Foursquare users worldwide, and many medium-sized cities have less than 1,000 users.

Mayor specials are only going to reward a single person per location. In Starbucks’ case, that’s only 12,000 out of 20 million customers. Foursquare mayorships are also extremely sticky; mayors are hard to unseat, so the fun of the competition wanes quickly.

Part of the allure of having Foursquare users check in is that the event is broadcast to their friends and followers, presumably enticing them to join the user therefore creating new customers, but that reach is likely overstated. 2.1 million people visited in March and check ins were nearly 400,000 per day, but traffic to the domain, which is the check in URL broadcast to Twitter, barely broke 170,000 visitors for the entire month.

In addition there are challenges with the Foursquare application itself. Often there are multiple venues listed for the same location and application connectivity can be sketchy as can be GPS accuracy. These are significant risks to consider if a business builds its promotion reward contingent on a successful check in.

Community-focused Marketing

Businesses that take a community-focused approach over an individual-focused approach are likely to enjoy a better return. AJ Bombers, a Milwaukee-based restaurant, used Foursquare’s built-in “Swarm Badge” to entice a large group simultaneously. Rather than offering one mayor an incentive, they offered everyone not just a discount, but also the social reward of the badge, bringing in over 150 people and doubling the day’s typical sales.

Caribou Coffee TriviaIf businesses really want to develop more engaging ongoing relationships with their customers they’re better served by bringing their customers closer in an analog setting rather than encouraging them to delve deeper into digital isolationist behaviors.

Analog Is Still Powerful

Caribou Coffee offers customers a 10 cent discount for playing a trivia game. It’s a location-based game – you have to be there to play – and the 10 cent discount is the social reward for playing.

The point of the game for Caribou Coffee is not to create loyalty via a dime discount, but to build a relationship with their customer beyond fulfilling an order. My local Caribou Coffee spent about $700 on trivia discounts last month…and in exchange got 7,000 face-to-face chances to deepen relationships with loyal patrons.

As the technology evolves, will the enticement of marketing through location based services ever outpace the power of local community growth?

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“Lyell Petersen is 93octane, an entrepreneur, e-business consultant and leisure travel industry professional. He is also a staunch proponent of the need to develop and manage personal online brands and an avid social media experimenter. 93octane shows up everyday to...