The Ocean Agency

Foursquare is a location based social networking tool, with a competitive edge. Foursquare has generally been billed as the next “hot” social media platform, and partly based on this widespread hype early adopters have flocked to the service.

Foursquare takes aspects of many popular social networks and ads a very powerful force: Competition. Users compete by “checking in” at different locations to become the mayor of certain locations. So, if you go to your favorite bar or restuarant 5 times a week, and check in every time, you unlock badges and can essentially rule a spot.

Businesses are beginning to do some extremely innovative things with Foursquare, most notably rewarding those who check in to their establishments quite frequently. Especially in New York City and San Francisco many businesses offer Foursquare specials or a leader board.

Here are a few examples of what some businesses are doing:

1) Tied House in Mountain View, CA offers a coupon for 15% off when you “check in”.

Via http://gaborcselle.posterous.com

2) Tastidlite has a page on its website that is solely dedicated to foursquare specials — with an instructional video on how you can use them (can’t embed the video but click the link to watch):

3) The Lite Choice in NYC uses a coupon based system as well:

via http://www.flickr.com/photos/kskobac/3977643745/

These are just 3 examples, and there are many others. Some businesses have a chalk board where they update constantly who has “mayor” status. Some offer first check-in specials, some have special events for Foursquare users. The possibilities are really endless.

Why Businesses Should Use Foursquare

1) Great location based advertising.

The fact that many Foursquare ads pop up when you are “nearby” is extremely powerful. With a market that is saturated with choice, Foursquare nearby advertising can push a business over the edge. Imagine walking around outside and a coupon popping up on your phone for a store two blocks away. Potent stuff. As mobile social networking is set to nearly double in 2010 (Emarketer November 2009), Foursquare is emerging as the best tool that encorporates both social networking and mobile location based advertising.

2) Builds brand loyalty.

Foursquare allows a business to reward its most loyal customers, as well as those who are checking out the business for the first time. In a saturated business market, retaining customers is key.

3) Spurs Word of Mouth

Marketers and advertisers love social media because it is such a powerful force for WOM. Customers are 75% more likely to convert if a product or business is recommended by a friend or acquantience. Foursquare automatically alerts your social network where you check in, and allows you to leave notes about the business. Essentially, you are alerting everyone you know what you think about a business. No wonder folks are so excited.

While this all sounds amazing to marketers and business owners, there are  a few things that are holding Foursqure back.

1) Foursquare Location updates feel impersonal

I don’t care that you are at the hottest club in NYC, and I also don’t care that you are at O’hare airport. Well, actually, I do care, but only if there is some kind of personal story or attachment behind the update. This is why Twitter trumps Foursquare in terms of location updates– Twitter location updates come with a story, while Foursquare location updates feel impersonal and robotic.

2) If businesses can’t handle Twitter, why would they join Foursquare?

Most businesses aren’t using Twitter or Facebook effectively. How can we expect them to come up with innovative Foursquare ideas? Foursquare needs to attract businesses that aren’t extremely comfortable with SM.

3) Decision making is a collective, rather than individual processes.

You may want to go to the place that offers a discount through Foursquare, but what about your friends? What do they get out of the deal? Foursquare does a lot of things right, but there is no real Groupon style incentive to involve your friends in your purchasing decisions.

Foursquare is really almost there. Personalizing the check-ins, finding a way to incorporate more group decision making, and a greater emphasis on user reviews could push the platform over the edge. What do you think makes Forusquare such a powerful tool for businesses? What will it take for it to reach the tipping point?

Further reading:

Mashable

The Next Web