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Foursquare: Valuable engagement platform or another social distraction?

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7th May 2010
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Location-based social networking site Foursquare is attracting increasing attention from the business community. But what’s behind its growing popularity, and why should businesses get involved?

Social media has taken the world by storm. The explosion in popularity of MySpace, Facebook and then Twitter has brought about a cultural shift, facilitating online communications and putting pressure on businesses large and small not only to create and maintain a presence on these channels, but also to use them to interact with and better serve their customer bases.
Hotly tipped to be the next big thing is location-aware social media, where users not only share updates and information a la Twitter and Facebook, but also let the world know exactly where they are. With a fairly unique game-like model, Foursquare has stepped forward as the strongest contender to take this new crown, but what’s behind its growing popularity, and why should businesses get involved?
 
Location, location, location
Available as an app on the iPhone and other smartphones, and via web browsers for phones with just an internet browser, Foursquare is a free tool to use when you’re out and about. Whenever you arrive somewhere and open your Foursquare phone app, your mobile’s GPS will kick in, pinpoint your location and give you the option to ‘check-in’. For example, you might check in to your local café and add a note on your update to say that you are "having a chai tea latte". Sound pointless? Well aside from working as a method to let friends know where you are, there’s also the option to post tips for others to see, for example, "The chai tea latte is only £1.50 and very tasty".
For businesses, therefore, Foursquare creates a new kind of visibility. Your business, and what people think of it could now have a new, user created presence on the web. If someone with Foursquare is walking near to your business and checks out the list of local tips on Foursquare, your venue will be listed – that’s a new opportunity to win (or lose) passing trade.
Furthermore, the networking site enables firms to offer 'Foursquare specials' that are promoted from within the application, so that when a user visits your location, or is in your locale, special offers can be pushed to that person to further promote your business.
The potential exposure can be huge, with high street businesses enjoying the most immediate and obvious opportunities to use Foursquare to build trade and loyalty. But Foursquare publicity stretches beyond Foursquare itself. The service can be linked to Facebook and Twitter so that updates can appear there too.
Your next step right now should be to see if your venue is already listed. If it isn’t, it should be, and if it is, you need to think about what you can put in the tips section to welcome trade (e.g. "We sell and repair bicycles. Drop in for a bike ‘MOT’ for just £10 during April").
User and business incentives
To encourage users to use the service, Foursquare have created a game element. Checking in, creating new venues and various other activities all earn points and ‘badges’. For example, if you are check in to a place more often than anyone else, you will become the ‘mayor’ of that location. These points and badges don’t have any intrinsic real world value, but businesses can be creative about how they use them. For example, cafes might offer free coffee to whoever holds the mayor badge. Indeed, a small but growing number of venues are now using Foursquare data to reward their most loyal customers with freebies or discounts. 
But businesses can also get creative about incentives. You might offer a discount to anyone who can prove from their phone that they have checked in. For businesses that don’t operate a ‘drop in and buy’ style service, there are still opportunities. Call centres could advertise jobs via the tips section, solicitors could advertise their latest will making package and invite people to come in and book – the possibilities are endless.
 
Caveat emptor
Of course, as with everything, Foursquare carries potential problems for businesses. Users can theoretically cheat by checking in to a venue they’re not actually at in order to get the mayor badge. Furthermore, you might find that multiple versions of your venue are created (accidentally or intentionally), which can take some management, although Foursquare does offer a ‘merge’ function.
Most significantly, the service is open to sabotage. Disgruntled customers and competing businesses may theoretically discredit a business by adding negative tips. Defamation cases have been brought on the basis of tweets, so we could see the same happen on Foursquare, but in most cases, just as with any other service with user reviews attached, the best way to combat negative reviews is to encourage, rather than discourage, user interaction, so that the good far outweighs the bad.
 
What lies ahead?
Foursquare’s hype machine has whirred into action, and the social media savvy will either know about it or already be using it. User numbers have topped a million, and it seems likely that users of Foursquare (or one of its location-based contenders) will gradually take the decision out of individual business’s hands and create an online presence (and reputation) for them. Rather than waiting to tackle this trend reactively, it makes sense to get involved now, and take advantage of the opportunity to promote your business before Foursquare’s popularity explodes, making it more difficult to be heard above the GPS driven din.

Nikki Pilkington is the owner/founder of NikkiPilkington.com, an internet marketing company based in the UK and France.

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