How many of you have heard of location-based services? How many of you use location-based services?
Summarize what LBS are – Foursquare is one of them.
Why the hype? Twitter’s widespread adoption and real-time updates. Smartphones are ubiquitous, 52% of smartphone owners already use some type of location-based service. In a world where customers expect a personalized experience, LBS provide a powerful way to deliver timely, customized information. LBS integrate with consumers’ existing social networks. De facto model for LBS is the “check in” model – it allows you to manually and deliberately check in to a specific location and either let friends know about it… or not. Previous location based services, such as Google Latitude and Loopt, were offered as location models – whereby they were always on and automatically updating your location for all of your network to see.
Let’s talk more about the check-in model and why it’s important to the adoption of LBS? PRIVACY : pushing an update is a deliberate event. You don’t have to let everyone know about every location you visit, and even when you do check in, you aren’t beholden to let your network know exactly where you are. ACCURACY : if a discrete location doesn’t exist, you can create it. For example, perhaps a geolocator isn’t registering the book store you’re at, but you know it exists because you’re standing in the middle of it. Simply add it as a location and problem solved. Everyone else who goes to check in there now will be able to see it. CONTEXT : ability to add comments to your checkins to provide some context to your visit. FREQUENCY : like I said, if you don’t want to share every pit stop you make, you don’t have to. You control the frequency of your sharing.
Context of Mashable study. Rankings.
Has long been a trusted web site for reviews and rankings. January: added check-in feature on iPhone app. Experimented with gaming element of location: badges and most recently, the royalty rewards (duke/duchess, king/queen) Because they began online as a review system and then expanded into the mobile space – already had a significant user base and a lot of functionality that they can leverage. For example, easy-to-read location reviews, ability to upload and view location photos before you decide to check in there. And now, you can connect check-in data to individual reviews. Yelp is definitely a formidable threat to the likes of Foursquare and Gowalla. Wasn’t included in Mashable’s study because it’s not available world-wide, whereas the other 3 services are.
Overview of this piece of study and top 3. Opportunity to receive special deals only ranked #1 for 5% of respondents. Why is that? Here’s my guess: at this point in time, the emphasis of check-in model remains on status-related incentives like earning badges rather than on receiving tangible rewards from businesses – but look at where THAT falls on the spectrum of what’s most important to consumers. Now, I’ve been thinking about this, and it can’t be that people don’t value rewards – other models (like Kroger Plus Card, for example) prove that customers respond well to loyalty-based rewards and discounts. So taking all of this into consideration, I’d like to suggest two things: 1) that the notion of status/prestige via badges is not the right incentive for this type of service – at some point, people need to be able to answer the question, “why am I doing this?”; 2) that perhaps the lack of businesses offering deals is to blame for consumers ranking it as a lesser priority. Think about that for a moment: if businesses are not leveraging this widely, then consumers may not understand the enormous potential for being rewarded for brand loyalty. Well, consumers cannot project what is possible. What this means for business is opportunity. There’s tremendous opportunity here to engage with consumers in a new way and deliver upon what THEY value, versus what you THINK they value.
Let’s take a look at the usage rates of some of these services to understand just how big the area of opportunity is. Here we see a trend of unique visitors for Yelp, Foursquare, Gowalla and BrightKite over a 6-month period. As of May, YELP: almost 9.8MM FOURSQUARE: 1.4MM GOWALLA: yet to reach a quarter million BRIGHTKITE: hasn’t broken 100k Take a look at that % change for Foursquare. Usage has grown over 29 THOUSAND percent year over year. Granted, it’s a relatively young company, so it had nowhere to go but up, but consider this: it took Foursquare just over a year to get to a million users. By comparison, it took Twitter about 2 years to get one million users. Foursquare is currently adding 10-20,000 users per day and, as we heard from CEO Dennis Crowley, averaging 10 check-ins per second. That’s phenomenal growth. How can you afford to NOT be getting even a small slice of that pie?!
Before you dive in, consider the following outstanding questions from the location-based services naysayers. While you can’t argue with the fantastic growth rate and enormous potential that comes with that, a lot of people are question whether location-based services will reach critical mass. Now, remember that I mentioned that the current emphasis for all of these services is the prestige that comes with winning badges and mayor status. While these things drive engagement among very active and committed users, they can potentially discourage just casual users from participating. Remember my suggestion that the notion of status/prestige via badges is not the right incentive for this type of service? These casual users aren’t moved by badges and mayorships. So, they’re left wondering “Why am I doing this?” And guess what – these location-based services need to pick up a base of casual users to take this mainstream – the same way that people casually or occasionally use Yelp. You think all 9.8MM Yelp users are on there checking in and writing reviews multiple times a day? No way. People also look at location-based services with a skeptical eye in terms of whether they’ll work as an effective mass marketing tool. The underlying technology and the very nature of the services allow for great reach and there’s certainly enormous potential for businesses in terms of word-of-mouth (e.g., when existing users share where they are and what they think of a location via their other social networks)… but without that critical mass, it won’t be an effective mass marketing tool. Although could certainly be successful in more targeted efforts, and we’ll get to that in a few moments.
With that said, it’s pretty simple to figure out if integrating location-based services into your marketing strategy makes sense for your business. You’ve got to have a physical location for people to check into. Again, there are a few forward-thinking businesses that have already experimented with promotions in this space – so if your business and your brand is forward-thinking, go for it. If your customer base is naturally social in nature – and really, show me an industry that doesn’t have an inherently social component to its target clients – then LBS make sense. Remember, we just talked about why LBS won’t work on a mass scale. Yet. Consumers can so easily tune out other marketing channels (TV ads, emails, etc.) and I think everyone in this room is in agreement that we’re no longer operating in a world of push-marketing, where we simply send out our message and hope that it makes some sort of dent in our revenues. All messaging is now two-way – it’s all about engagement and dialogue with your clients. Using LBS embeds your company and your offering within their daily social network. And you can easily find out who your most loyal customers are, what they think of you, how they’re telling your network about you… WHAT ELSE?? It’s important to remember not to put all of your eggs in one basket. Use location-based services as one element of an integrated strategy or program that has longevity in the market place.
Every business knows the value and importance of their loyal customers – reward that in a unique way by offering discounts or other incentives to those people who check in to your business most often. Great way to foster loyalty without mandating that consumers carry yet another dreaded loyalty card. If someone checks in to a location near yours when you’re running a promotion, they’ll be notified of that and may be enticed to come in. NOTES Remember, checkins are pushed out to all of a users friends, along with any comments or tips they may share about a particular location; so this is viral marketing at its finest. The fact is, people are influenced by their friends, and location-based services help consumers share their favorite stores, restaurants, etc. Few businesses have ventured into this space – be one of the first and you’ll get noticed
On her blog, Cheryl keeps a directory of Columbus business currently using Foursquare for promotions. Guess how many are on it? 5
This is significant because it’s nationwide and is the first promotion of its kind for both Foursquare and Starbucks. It’s already brought national attention to the marketing possibilities of LBS. DETAILS: Mayors $1 off Frappuccino (any size, any flavor) - $1 off is significant for customers who routinely pay an avg of $4. How promoted: Twitter, Mashable.com – intentionally left off of Facebook, main web site and blog. BC again, Foursquare hasn’t reached that critical mass yet – although with the backing of a huge brand like Starbucks, had they promoted this via their Facebook page or web site, it could have really made an impact on Foursquare usage. Brilliant strategy because it runs for a month (ending June 28), so what it’s doing is driving foot traffic to the retail locations – people are visiting, checking in, trying desperately to win mayorship so they can get $1 off. It will be interesting to see how this impacts comparable store sales over June 2009. Side note: Starbucks is a heavy experimenter in the social media space – in addition to heavy Facebook and Twitter presences, they have previously partnered with FourSquare to offer the Barista badge to consumers who have checked in at 5 or more Starbucks locations. So, they’re rewarding loyalty on the basis of both status and special deals.
DETAILS: Bravo partnered with Sephora to offer users who unlock the Housewives badge with a $100 Sephora gift card at stores in NY/NJ over a one-month period. HOW DO YOU GET THE REAL HOUSEWIVES BADGE? So again, we see the objective of driving foot traffic over a period of time – something that’s easily measurable by standard retail It also integrates a sense of urgency around the promotion – be the first badge holder to a store to win the gift card. This gives more control over traffic fluctuations. (“To manage cyclical business declines/slumps”) Further, by announcing how the contest works (via the Sephora blog, which is where that Twitter URL points to), Bravo and Sephora are creating a captive audience – all of their followers are eagerly watching their tweets each week after that week’s Real Housewives episode to find out when and where the next gift card will be given away, and while they wait, they are being exposed to other messages and specials from both brands – not to mention, they’ve likely picked up a significant amount of new followers since the contest’s inception because guess what – not only do you need to be a badge holder, but you need to be a Twitter follower of Sephora and BravoTV. This takes the “useless” concept of badges and ties it to a tangible reward for a brand that is closely connected with another brand. The only downside: focused on NY/NJ area (though from a business perspective, this provides a great way to test this initiative before rolling out something of this proportion nationally)
The city of Chicago’s tourism office, Explore Chicago, has used the On Location badge to challenge users to recreate one of five movie experiences. Follow Explore Chicago on Foursquare (required to earn this badge); Pick a movie-themed experience at the left and &quot;check-in&quot; at five of the eligible locations. Now the city is giving away a free trip so that two out-of-towners can visit Chicago and try their hands at the Foursquare mission. Fantastic way to foster engagement.
Foursquare is rolling out access to some analytics and measurement for businesses about the customers who are checking in to their location, which may decrease the need for in-store other measurement tools. Would be killer for big businesses interested in tracking their trending venues and determining what works based on location. Foursquare is thinking about correlating checkins with weather patterns (merchants may be able to offer better incentives on rainy days, E.G., what Cheryl has suggested in her blog – create rainy day promotions to smooth out traffic slumps) “ Once we add purchase information on top of checkins, things can get pretty interesting” – a la custom coupons at grocery store checkout.
“ Movie apps will also get in on in-venue features. Moviegoers could check in to a theater on the opening night of a film with their favorite app. The venue could offer discounts on popcorn upon checkin, and users could vote on the movie previews shown before the feature. While the movie is playing, they could get trivia questions from IMDB about the current movie and comment on the movie with other app users a la “Mystery Science Theater 3000.” The theater could award that night’s trivia winner a discount on their next visit to the theater and could gather information based on answers about which type of movies each customer likes.” -Mashable
Location-based services Why you should “check in”
“ Why Gowalla and Foursquare are kicking Google’s ass in location – the check-in model” – Gustav’s Mindshare, 12/30/09.
Check-in apps Ease of Use Social Media Integration #2 Location accuracy #1 Opportunity to earn deals Status features Friend connectivity #2 Ease of use Opportunity to earn deals Status features Friend connectivity Social media integration #1 “ Which app does check-ins best?” – Mashable.com, 06/10/10.