Whilst completing my masters in IT and Marketing in Paris two years ago I wrote a dissertation on mobile social networks and their marketing opportunities (you can read it here although it is in French...). I was convinced that the meeting of mobile and location based social networks would become THE next big thing and help businesses to deeply connect with consumers. Today, I am glad and not so surprised to see location-based services going mainstream!
Location-based services are defined as applications delivering relevant information to users on their mobile depending on where they are based. The LBS market is burgeoning with two types of players:
- The check-in based companies like Foursquare, Where.com, Gowalla, Loopt, Brightkite, Rummble or Yelp... These are the ones currently leading the way. Just to give you an idea, Foursquare reached the 1 million members in April and it appears they have just crossed the 2 million users mark yesterday!
- The more established players like Twitter, Facebook and Google have recently entered the market as they see location-based services as a massive revenue generator in the future. GigaOm estimates the potential value of the location-based services market could be worth up to $20 billion (see infographics here) and according to Juniper Research, revenues from mobile location-based services market are expected to exceed $12 billion by 2014! These revenues will mainly come from advertising, retail coupons, business sponsorships and local search marketing which will be exciting news for brands.
Whilst mobile marketing has been around for a while with SMS, MMS, banner ads etc. it has never really taken off before because it was targeted for users and lacked that special social element. However, the improvement of the wireless carriers' network infrastructure (3G), as well as the increasing proliferation of internet and GPS-enabled smartphones combined with the need for consumers to always be hyper-connected has led to a promising future for mobile advertisers. Location-based services use specific location information for delivering the right message to the right person at the right place AND time. The consumer only receives information relevant to him which should engage and encourage interaction with advertisers. Location-based services are opening up a range of new marketing possibilities improving experiences and relationships between people and businesses.
An example of location-based service: Foursquare
Foursquare is a free game available on a variety of mobile platforms. Once you start using the service on the go, you are presented with a list of locations around you and the whole point of the “game” is to check-in to broadcast your location in real-time at the various public venues you visit each day to your inner circle of friends, family and colleagues. The location can be anything from bars, train station, restaurants or work. If you can’t find a venue, you are invited to add it and you are rewarded for your crowdsourcing effort. You can also create notes/reviews for others about the venues like promotions, recommendations or tips. Every time you check-in to a venue, you are awarded a number of points based on how many times you have come there. The more often you do that in the same location the higher you are ranked in the leader board. You can also unlock badges such as newbie, adventurer, explorer, local, or superstar. The user who checks-in more than anyone else becomes “mayor” of that location. Mayorship encourages real competition between users and is very addictive. You can check Louis Gray’s article to see if you are on your way of being a Foursquare addict :)
So how can you tap the power of the “check-in” for your business?
Last year some venues started rewarding their Foursquare mayors with special deals like free cocktails instant discounts. Foursquare loved the idea and realised that the check-ins were not only benefitting users in their quest for badges and mayorship but also businesses by giving them a chance to engage better with their loyal customers! They therefore built support for this type of deal and started offering Foursquare Specials for business. This is where Foursquare gets interesting as a marketing platform, especially for retailers selling physical merchandise. You can claim your venue from a foursquare venue page and once your business is verified you can start offering specials to your customers. There are 4 types of Specials:
- Mayor Specials: unlocked only by the Mayor of your venue (the user who has checked in the most in the last 60 days). Example: "Foursquare has deemed you the Mayor? Enjoy a free order of French fries!"
- Check-in Specials: unlocked when a user checks in to your venue a certain number of times. "Foursquare says you've been here 10 times? That's a free drink for you!"
- Frequency-based Specials: are unlocked every X check-ins. "Foursquare users get 20% off any entree every 5th check-in!"
- Wildcard Specials: always unlocked, but your staff has to verify some extra conditions before awarding the Special. "Show us your Foursquare Swarm badge and get a free drink!"
You can also get Foursquare to provide you with some window clings so you can market your Specials to customers in your venue. Foursquare also provides you with free real-time stats about your venue: most recent visitors, most frequent visitors, time of the day people check in, total number of unique visitors etc. Valuable information for every business trying to learn more about their customers and track their behaviour patterns and habits.
This is a real win/win situation, on one hand users get engaged into a free and friendly competition over the mayorship of your venue and potentially get the chance to win freebies and discounts. On the other hand, as a business you get the chance to monitor and identify your customers, give them special treatment and encourage frequent visits and loyalty!
Some other thoughts on how to leverage Foursquare
Give tips to your customers – it is a good idea to leave advice in the tips section. This could be some info on a new menu item, an upcoming event or tip on how to avoid busy times. For example the History Channel has started using Foursquare to give its users tips at various venues around the United States to coincide with its show, America The Story Of Us.
In the same way, Louis Vuitton is partnering with Foursquare to offer users tips on their favourite locations around London. Check some of their tips on the Louis Vuitton account
Create your very own official badge for your business - Starbucks created a Barista badge for caffeine addicts which you can get if you check in at 5 different Starbucks.
Bravo, Fashion Victim badge by Marc Jacobs for the Fashion Week 2010, Time Out - Happy Hour (New York) Badge, Bay Area Rapid Transit (BART) and some cities like Chicago are also good examples. But don’t be intimidated by the big names cited above, it doesn’t matter what size your business is; you could do the same thing to promote your product or service and engage with your customers.
- Listen and learn from people’s comments – remember the user now has the power to talk and say what he thinks. Don’t ignore this and leverage Foursquare to gather users' feedback and show you are listening and improving. You could even use the ‘to do’ list facility to show your customers what you are going to improve.
Hold an event or a party for customers to earn the Swarm Badge – 50+ people are also checked-in here - it's a foursquare flash mob! The best example is probably AJ Bombers restaurant which hosted an event for customers to help them earn Swarm and I’m on a Boat badges (difficult badges to obtain). They managed to attract 161 foursquare users at the same time and their typical Sunday sales more than doubled, with an increase of 110% that day! You can’t do much better in terms of harnessing the power of location-based services. By using Foursquare, this restaurant owner not only achieved record sales but also managed to build a sustainable and real-time word-of-mouth which will probably have an impact on long-term sales as well.
Read the full story on Hubspot blog
- Think outside the box... The only limitation is your imagination! – Early this year Jimmy Choo, the fashion shoe retailer used Foursquare in a very interesting way organising a real-time treasure hunt around London via the location-based service for the launch of it's new trainer range. The idea was simple and fun, the audience was hugely engaged and a lot of PR was generated.
Whatever your current digital marketing plan is, don’t underestimate the power of location-based services. Unlike the current social media marketing activities, services like Foursquare and Gowalla are able to bring to life online and offline relationships and experiences to unlock a city’s true treasures. So, are you now ready to check-in?
- Nice Slideshare presentation - How Foursquare Helps Consumers and Business Owners
- Check out some more examples - Ten Foursquare marketing campaigns and 21 Unique Location Examples from Foursquare, Gowalla, Whrrl, and MyTown
- If you still don’t understand why people are checking-in, this article could help you out - Why We Check In: The Reasons People Use Location-Based Social Networks
- Some more exciting news coming from Foursquare HQ last week - Foursquare Launches Location Layers - This is Big and Foursquare Unlocks ‘$20 Million in Funding’ Badge