April 5, 2010

At the South by Southwest Conference (SXSW) in 2007, Twitter burst onto the scene, capturing the attention of thousands of early adopters, bloggers, and businesses. Some companies such as Comcast, Zappos, and Dell embraced Twitter early – and few would argue that they didn’t get their money’s worth.

Now another social media tool that wowed SXSW has become the talk of the town – Foursquare. The mobile, location-based social network is growing like wildfire and attracting a lot of attention from the same crowd that helped bring Twitter into prominence. See the parallels?

Just because Twitter and Foursquare have a similar story does not mean that they present the same opportunities for savvy businesses. As a small business, you have limited resources and nowhere near enough time to explore every social network.

So let’s ask two simple questions: is there a real opportunity for businesses that embrace Foursquare? And do you need to jump on the Foursquare bandwagon now or risk being left in the dust?

The Opportunities Are Different

Foursquare is not like Facebook, Twitter, or any other social network. People don’t log onto their computers to check what their friends are doing. On Foursquare, friends “check in” to different locations like the movie theater or a favorite bar that is then broadcast to all of their Foursquare friends. It is all done on mobile phone apps, iPhone push notifications, and mobile web interfaces. Thus, the opportunities presented by Foursquare are different.
 

The question to ask is this: what can a business do with location-based information? The answer depends on the type of business you have. Brick-and-mortar stores with a specific location can immediately advertise to users within their proximity -- restaurants are already using Foursquare-specific discounts and location-based advertising to pull in new customers.

If you’re an Internet-based business though, the opportunities can be harder to envision. Location isn’t a particularly useful piece of information for ecommerce websites – it really only matters for shipping. There also isn’t an easy way for a brand to build a presence on Foursquare – it’s not as if Coca-Cola itself is visiting the local 24 Hour Fitness or dance club. However, Foursquare recently introduced the ability to “follow” celebrities, making it easier for those with personal brands to build a presence on the location-based social network.

Should You Be Jumping on the Bandwagon?

There’s no easy answer to that question, and it brings up yet another question: how should you jump on the bandwagon if you decide to dive right in? Local businesses may be better off advertising and offering mayorship deals on Foursquare, while larger corporations and online companies may want to consider strategic partnerships or building a presence on Foursquare surrounding an individual.

Foursquare’s still very, very young, and it would be accurate to say that it has a long way to go in integrating brands into its service. Thus, before diving right in, have a plan in place for how exactly you will use Foursquare, and make sure that it’ll provide you with more return on your investment than if you had done something else with your time.

Join the conversation ( 12 )

• Debmalya (Deb) Dutta 1 year 10 months and 6 days ago

  

  Had put down my thoughts on Foursquare usage a couple of days back via this blog - http://debmalyadutta.wordpress.com/2010/04/06/benefits-of-location-based-content/

• Alexander Horré 1 year 10 months and 6 days ago

  

  It's not simply about 1M users versus the other hundred million users. Foursquare are active, early adopters that most likely have a higher conversion by nature. This profit pool is the sort of concept that Apple uses. Look at their cash cow now.

• Karyn Cooks 1 year 10 months and 9 days ago

  

  Personally I'm enjoying the push messages from AskMen and others when I check in to my local haunts. Especially enjoyed a suggestion in the drive-time hour to visit a favorite pub near the Whole Foods I had checked in to, and a tip from a friend I follow about what to order at a restaurant. Funny enough, it was she I was meeting for dinner!
  
  Professionally, I'm recommending a new fashion design client with deep roots in a very social city start checking in. I also invite you to visit my Slideshare preso at http://bit.ly/a9PEpF. Clearly I'm a fan.

• Beth Harrison 1 year 10 months and 9 days ago

  

  Thanks for the article Ben. I definitely think that Foursquare offers many opportunities for various businesses to extend/promote their brands. I see it as another form of an integrated media buy. I also believe that via the "check-in" Foursquare has created an new ad unit and metric. However, I do think that Foursquare is limited to a small population and demographic that likes to know where their friends are or what they are doing.
  At Socialight, we enable businesses to create their own location based communities, services or applications that connect content & brand messages to people where and when they are relevant. Ad Age called us DIY LBS, and in a recent Open Forum piece, Ivana Taylor suggested that Socialight is a great DIY marketing option for small businesses that want to easily create location based communities for their customers. Location is an very interesting technology that will present many different opportunities for businesses large and small to participate in.

• Matt Hendrick 1 year 10 months and 9 days ago

  

  I wouldn't call myself a die-hard Foursquare user, but I do check in from time to time and keep up with what my friends are up to. For businesses, the fact of the matter is that consumers are checking in, shouting, etc, regardless of whether or not the business owner is participating - it's very similar in nature to the "business owner - Yelp - customer" relationship: at some point, it can no longer be ignored.
  
  Our product is a social toolbar that's geared towards businesses with a brick and mortar location; what sets us apart from the toolbar pack is that we also feature reviews from Yelp, neighborhood info from Walkscore, customer updates from Foursquare, and more - and it's all based around the specific business address the owner gives us. IMHO, the content is going to be out there, like it or not - and we think there's a large group of people who'd love to be able to put it to good use directly on their site.
  
  My biggest question surrounding Foursquare and similar services is whether or not consumers will eventually begin to get "check-in fatigue' or not. Is this simply a novelty that will wear off in a few years time, or are we truly at the beginning of something much bigger?
  
  Matt Hendrick
  http://TurnSocial.com

• Paul Chaney 1 year 10 months and 9 days ago

  

  I don't think small businesses can afford to turn their nose up at any potential marketing activity that holds the promise of producing revenue, especially if such use requires little more than the offer of a discount and minimal time investment. Foursquare certainly holds such potential and, therefore, is worth consideration.
  
  It's obvious that certain types of businesses appear to be a better fit than others, but, as with Twitter, many of the benefits are yet to be discovered. Those will come in time and with use. So, I say, go for it!

• Karl Boehm 1 year 10 months and 9 days ago

  

  There is a very important reason why your company should get involved with Foursquare - it has *** appeal. If a single guy or gal is hanging out at a local restaurant, wouldn't Coca-Cola want to remind them that they could be drinking a nice refreshing soda. Wouldn't you want to remind them about your service as they stop by a local Starbucks.
  
  Location based opportunities are a major up and coming field. They are paving the way for new jobs and services that are more on demand.

• Matthew Hodson 1 year 10 months and 9 days ago

  

  So I see a lot of negative feedback towards 4square right now and I must say it is not warranted. Yes the whole privacy thing but are you checking in at home so others know where you live? People who are going to rob you while gone will be staking out your house anyways. This is new technology and people are going to be afraid of it.
  
  That said this is still not for everyone nor every business. It can be a great tool, especially for market research. If Foursquare harnessed the power it has in the research realm (providing its users' anonymity of course) to companies for a price, then better discounts and marketing strategy could take place.
  
  Let's also look at this from a nonprofit stand point. You want more volunteers? Look towards Foursquare and design a badge for it. People can then check in at your designated events and get badges for volunteering. Might not work for everyone but it is a cool little bonus.
  
  These are just a few of the things that could work for small business. I am excited to see where this technology will take the business world!

• Patsy Stewart 1 year 10 months and 9 days ago

  

  I agree with Joseph that there is significant opportunities within Foursquare. Ben's observations are true that the biggest gainers early on are the restaurants and bars. I hear a lot of chatter surrounding brick and mortar stores when friends shout at someone who is checking in near the same time. I've been seeing shouts on twitter from "hey can you pick me up a new toothbrush" to "did you see the patio furniture on display" to "meet me at the coffee shop".
  
  I can see the foursquare shout feature useful to ecommerce sites if a strategic marketing plan was implemented using foursquare along with twitter and facebook to create additional customer touchpoints. The marketing strategy could include a means to drive traffic to a website with a clear call to action on the landing page, a great brand awareness opportunity and an immediate opportunity for conversations and communication.
  
  It will be interesting to see how well Foursquare is adopted by marketing agencies. It is apparent to me that Foursquare is taking the necessary steps to make it applicable to small local businesses as well as the big boys!

• Roger Toennis 1 year 10 months and 9 days ago

  

  The problem with Foursquare, and all location tracking solutions, is they have not throught through the privacy problem. Sure, there is always going to be a hardcore cadre of technophile/exhibitionists (I sort of qualify for this myself) who are just fine constantly sharing what we are up to and even where we are.
  
  The problem comes when LBS service will attempt to leap the chasm from we early adopters into the mainstream. I just don't see how they can get any significant percentage of the adult population to sign up for being constantly tracked by a gaggle of small startup companies like Foursquare, Twitter, Yelp, Gowalla, etc.
  
  People have plenty of heartburn already over big/new internet companies like Facebook having all their personal data and personal interactions with "facebook freinds". Facebook certainly has crossed the chasm into mainstream but if they aren't careful about privacy, and if they alsio try and physicaly track FB users, I think they will slide right back down the slope of the early majority part of the adoption curve and drop like a rock down into that chasm.
  
  Think about it, how fast could you and all your friends pick up and move your online social networking experience now on Facebook to a new solution that better respects privacy and promises to stay hands off of user location?
  
  The answer is "Internet Fast!"
  
  If Facebook stumbles on realizing people do care about privacy..."The bigger they come, the harder they fall."
  

• Joseph M. McCarthy 1 year 10 months and 10 days ago

  

  Personally, I believe there is a significant business opportunity through foursquare. Though, it may not be for large corporations. Admittedly, this morning a friend did message me announcing that she had just acquired the Barista Badge for traveling to 5 different Starbucks locations; the fifth of which she visited this morning solely to obtain the badge. Starbucks aside, I don’t see the potential for other large organizations to replicate this, few have the same type of following needed.
  
  Whereas, I believe that Four Square has significant potential for smaller retailers, restaurants, bars, and entertainment venues. There are actually a few Boston MA, restaurants that provide discounts to you if you are the venue’s ‘Mayor’. Most restaurant owners thrive on repeat business. Should they provide discounts or special perks for their Mayor or top visitors, I could see Four Square use growing for the sole purpose of deal seekers. Then when you consider the competition amongst visitors to obtain the deal or perks that come with ‘mayorship’ it become a whole new ball game. Four Square could really be leveraged into a community of users for many businesses if the effort was taken by owners and managers.
  

• PAUL ROSENFELD 1 year 10 months and 10 days ago

  

  Nice Ben,
  
  I'd offer a few other observations:
  
  - 4Square only has one million users out of 300M consumers in the U.S. so why even entertain the question if you're a mainstream brick and mortar? If you add up ALL the location-based services maybe you would crack 5M users. And of course, most of these users try and leave, they're not active all day every day.
  
  - My understanding of 4Square is that they have a very limited # of opportunities available for local merchants at this point in time.
  
  I'll end by sharing I'm a huge believer in these services, but I'm a practical guy at heart. As both an Innovator and a small business advocate, I'm generally torn in advice. In this case, I think almost all small biz should stand on the sidelines and see how they develop.