Wednesday, April 7, 2010

Foursquare - are we missing the ball?




The blogosphere has been all a-Twitter about location-based services like Foursquare and Gowalla recently. Between the buzz of SXSW and a rumored $100 million Yahoo acquisition there's a whole playground-ful of questions about where the ball will bounce next, and onto whose square. Will Gowalla score big during the last few minutes of recess? Or maybe Facebook will pull a "big college kid" on their butts and steal the ball away entirely. Amid the speculation, I think there are some huge, obvious uses for these applications that most of us have overlooked.

Bloggers and industry observers Louis Gray and Robert Scoble both wrote some of the more interesting posts on the topic this past week, exploring the potential--and potential pitfalls--of these services. They point out that despite the hype, adoption is spotty and limited. It's still pretty darn easy to be named "mayor" of somewhere on Foursquare. Even in tech hubs like Silicon Valley, you rarely find a lot of simultaneous check-ins, unless it's at the Apple store on iPad release day. Louis raises a number of good questions, such as the one in his headline: "Should Boring Married People Check In On Location Apps?" (He has the good humor to include himself in this category.) I also liked Robert's ideas for how to make the services more appealing. He calls for a "malleable social graph" where we get tips and reviews from folks who share our tastes.

All well and good, but in some ways too subtle for where we are right now. We're so immersed in the social networking headset that we have failed to recognize that this is a case where more conventional marketing and sales techniques could be very effective. After all, it's all based around the idea of a game, with its rewards and competition. As Louis notes, game theory really does apply here. There is a lot of talk about the "tips" and other social elements of these games. But what about that amazingly prominent, hard to miss "Special Nearby" button? We don't hear much about it. But that's where companies are going to find immediate value. As Gary Vaynerchuk so succinctly put it, brands get this stuff because it's about moving people around.

There's a reason that Starbucks has signed a partnership deal with Foursquare. They see it. You can use these services to offer rewards and discounts to customers--the types of rewards that keep them coming back day after day. For all the talk about adoption, the smart brands realize this isn't such a huge barrier. If your customers aren't signed up with Foursquare now, give them a reason to do so.

There's nothing onerous here for the user. It's a free application for anyone who has a cell phone. Foursquare doesn't even require a smart phone--there's a text only version of the game. Just the way department stores get you to sign up for credit cards by offering you a 10% discount, your local clothing shop can get people to sign up for Foursquare for an instant cost break. What retailer isn't hurting right now? This trend doesn't need to be limited to big brands like Starbucks or Tasti D-Lite (another company that has leapt into Foursquare with both feet).What about your neighborhood coffee shop, Pilates studio, or wine bar? Or that really great car wash that Robert Scoble sung the praises of on Gowalla?

By creating a Foursquare or Gowalla game within a game, retailers could make shopping into a scavenger hunt. Or, they might creatively reward regular customers. It's great that lots of businesses are offering "mayor" discounts and specials. But really, how many people can be mayor? How about this: two check-ins a week for a month, and you get a free latte. And we all know how hard it is to win the "gym rat" badge on Foursquare. So what? Your neighborhood fitness center can decide to give a different reward every week for active members. Have a "check-in" at every weight station, elliptical machine and spinning class. Then give a free t-shirt to the person who tried a new routine every other week.

In short, this could be huge for businesses of all sizes. No wonder Yahoo wants to own it.

Image: Foursquare demo video (http://foursquare.com/)

6 comments:

Dr William J McKibbin said...

You now have me pondering deeply about how to apply location-based social networking services for my own purposes -- you bring such good ideas to my attention -- thanks...

Sunshine said...

Thanks for the comment. Would be very interested to hear what you come up with!

Andrew Peel said...

In my view they are ill thought out and implemented information sources for the criminal fraternity.

They probably break a dozen privacy and data protection laws. The problem is the US has no legislative concept of Data Protection unlike Europe.

Google Maps is a classic example I personally object to the fact they can take an image of me on my property without my permission.

Imagine the following scenario. A person has a Facebook account with family videos and photographs and they join Foursquare. Being naive (as about 95% of social networkers are) they post the couple are in a restaurant.

They have just placed their whole family at risk or their house and possessions. Foursquare is dangerous and should be taken down.

Sunshine said...

Thanks for the comment, Andrew. I deliberately didn't wade into the privacy question because so many others have explored this in much more depth. I don't disagree with you, although I'd stop short at saying these services should be taken down. There are so many other services that pose equal if not greater threats to privacy. But as I said, there is a great deal of discussion about this, such as Jennifer Leggio's recent ZDNet piece on Foursquare's privacy loopholes: http://blogs.zdnet.com/feeds/?p=2607.

Joe said...

Er... while this piece is well written, it contains no new insights. You don't remember a rash of articles along these lines a few months ago? You think the VCs haven't gone over this? You think, that Foursquare users, can't SEE? Give me a break.

Sunshine said...

Joe--thanks for the comment. I actually don't remember the rash of articles. Would be interested to see them. So far, I've not seen anyone suggest that businesses be proactive about getting folks signed up and instantly rewarded. At any rate I'm not directing this at Foursquare users or VCs, but rather social media observers and advisors, as well as smaller retailers who might start making use of these services to draw in customers. So far, I've seen pretty minimal usage in light of their potential. And I have yet to hear about a struggling downtown that got together and made an effort to create a scavenger hunt. But it's early days yet.