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Location Based Loyalty

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Location Based Loyalty
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While I have been robotically checking in all over the place for the past year or so, I’ve asked myself about the game mechanics at Foursquare and why there are 18 locations listed for the Fort Lauderdale airport making it confusing to know just where to check in.

In short, when things get confusing, the fun goes out of the balloon. There are some issues to be called out but I also acknowledge a big untapped opportunity with location based services for business, both large and small.

The issues:

  • The earliest stages of Foursquare usage had a competitive element among linked friends. It was fun to see who was checking in most often and where. Once people realized they could enter a venue for their office or master bedroom and check in umpteen times per day, keeping score on check-ins in your network lost its meaning.
  • In the beginning there were Mayors and the Mayors got all the goodies. Because the number of visits needed to win mayorship is not transparent, becoming mayor of some places is not at all motivating, especially when more times than not there are four geeks ahead of you who call the local Panera Bread home.
  • User generated environments encourage creativity, but databases and creativity don’t get along very well. My example at the airport is simple: multiple instances exist and are differentiated only by the level of data entered by the user the first time around – many time incorrect data to boot. It’s hard to know which “airport” is the one you’ve been checking in to for the past year, and I don’t need a part time job dissecting competing venues just to have a little “fun”.

Standardizing the venue database and refining rules of the game are issues that I am sure Foursqaure is addressing. I expect we will see big progress in both areas soon.

The big question that remains is why merchants have been so slow to capitalize on the Foursquare opportunity.

Foursquare is doing its part, publishing links on its home page to help businesses “connect with your customers”. On that page, they sketch out a four-pack of ready-made promotions that can be used by small (or large) businesses. I’ve listed them here (they should be familiar) along with some loyalty perspective for each one:

  • Mayor Specials:Reward your single most loyal customer
    • What about rewarding customer value, not just frequency?
  • Check-in Specials:Variable specials that are awarded upon check-in
    • Training front line staff is key to making this work – I’ve had several staffers give me a weird look but no goodies when I show them I’ve checked in
  • Frequency-based Specials:Something given free or at a discounted price every “X” check-ins
    • This one makes my loyalty spider-sense tingle. At least we’re rewarding all customers who exhibit some incremental behavior, not just the mayor
  • Wildcard Specials:These are Surprise & Delight “instant” offers that will have people looking for your location
    • Why not use Foursquare to “shout out” to anyone checking in nearby or just grazing through nearby merchant venues? It’s better than hiring the sandwich board guy

Merchants are catching on and seem to increasingly understand that creating awareness can lead to incremental visits and help them find new customers – all at a much lower price than old school methods, Yellow Pages included.

Tomorrow, I’ll share a day in the life of Foursquare to illustrate how quickly merchants are realizing the opportunity. We’ve only scratched the surface and the fun has just begun.

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