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7 Reasons Why Small Businesses Should Take a Look at Foursquare

In an end of the year prediction post I wrote for OPEN Forum, I listed location aware social media tools as something that would get big time attention in 2010. (See: 5 Trends that Will Shape Small Business in 2010)

foursquare for businessThe idea behind location awareness is that people will use the GPS capabilities in today’s mobile devices to check-in, tweet, review, and refer and add their location while doing so. Today I would like to talk about what I think is one of the first location aware services that is already beginning to impact small business.

The service is called Foursquare and while it’s receiving lots of hype from the bleeding edge social media types as the next Twitter, it may be totally foreign, or at least nonsensical, to many small business owners. While I want to use this post to introduce you to Foursquare, keep in mind that my primary point of view is that of the small business marketer and what I believe Foursquare has to offer, and not really the Foursquare user per se.

Having said that I do first feel the need to give you an overview of Foursquare.

The big picture

Foursquare is a location enabled service that allows users to “check in” when then stop at a bar, restaurant, park, bookstore or really anywhere they want to list. The service further allows users to connect with friends and alert them of your location if you choose. There are other services that have tackled this basic function, such as Loopt, Brightkite, Gowalla, and even Google Latitude, but Foursquare also turned this activity into a game: a point that I believe led to its current role as a leader in this evolving space. (I’m also keeping an eye on Twitter co-founder Jack Dorsey’s location play in private beta called Square)

Foursquare is self-described as – “Think: 50% friend-finder, 30% social cityguide, 20% nightlife game.”

Users compete with check-ins to earn points for their city, badges for various types of activity and to become mayor of frequented spots. Just like Twitter back in early 2007 none of this makes much sense until you play with it a while and until you have some folks to follow and connect with. (In fact, it doesn’t really make that much sense then, but there’s something sort of addictive about it.)

Users also add and update information about businesses, write tips and make suggestions for anyone to consume. This rating and reviewing function treads on the turf of services such as Yelp! and acts as another data point for people trying to locate a good pizza on the Upper East Side for example.

Foursquare is set-up around cities and enhances the kind of neighborhood, hyper-local, branding and community building that is so important to local type small businesses. The service is currently available in a growing list of cities and is driven by iPhone, Android and Blackberry apps. Check out the Foursquare help page for some more detail.

OK and now on the real reason I’m writing today. I’m not ready to suggest that every business rush to Foursquare as the next red hot thing, not yet anyway, but I do want to point our a handful of reasons that many small business should start paying attention to this growing force, even if you don’t get it.

Below are seven reasons why I think Foursquare may hold promise for small business

1) Hyper local, tech savvy, evangelists – Foursquare user are people that really love their neighborhoods, getting out and evangelizing the businesses they love. This tech savvy, early adopter is exactly the kind of consumer business should kill for as they often influence large circles. Embracing Foursquare and giving these tech leaders the tools to promote your business is just plain smart business.

2) Online offline – I’ve been writing a lot about this lately, but Foursquare is yet another way for local business to use the efficient online tools to drive more in-person, offline activity. People are physically checking in to your business and talking about online in what can turn into a tremendously effective one-two punch.

3) Make offers – On a recent trip to Chicago I checked into my Marriott on Foursquare and immediately received notice that three nearby businesses had a special offer for me. Currently Foursquare allows just about any business to use their platform to offer deals and promotions to users. You can visit the Foursquare business page to get your business signed up. It’s free for now, but I’m guessing this is big revenue piece for them in the future.

4) Track and reward – Foursquare’s gaming functionality allows businesses to create special promotions for mayors and badge earners and in effect setting up a competition among their most loyal fans. The image below comes from a special promotion hosted by blynk organic, a restaurant in North Carolina. By creating and communicating Foursquare’s tools and platform you can begin to educate customers and create Foursquare advocates for your business. Some bars and restaurants routinely promote free offers for mayors.

5) The power of making it a game – One of the most intriguing aspects of Foursquare is the game. It’s amazing what some folks will do in order to win a game, come in first or, in this case, be the mayor of a popular spot. Gaming and entertainment are huge money winners (video games rival the movie industry in sales) and any small business that can find ways to add gaming elements tied to patronizing a business may just find a real competitive edge.

6) Automated CRM data – So many small businesses have little of no way to track customer behavior. A coffee shop may have a patron that comes in daily for years, but they have no way to track anything other than a face and friendly smile. Every business should find ways to capture everything they can about a customer. Obviously email is a great tool and can be very effective for follow up marketing. Foursquare usage however goes far beyond that. Foursquare can provide business owners with check-in stats for users. What this means is that the customer that comes in every day can now be tracked and even incentivized to get a free cup of coffee for every tenth check-in. It’s like the digital/social version of the loyalty card. Please tell me you see this as huge potential.

7) Sync with Twitter and Facebook - Like all good social media platforms Foursquare understood the need to integrate with platforms that others already use. Foursquare users have the option to tweet or add a Facebook status update every time they check-in. What this means is that a Facebook user with a few hundred friends might expose your business by way of a Foursquare check-in to thousands of Facebook walls. While many of those folks on Twitter or Facebook may not be in your part of town, I’m thinking it’s still a pretty good thing for the brand.

While I’ll caution again that Foursquare might not be the highest priority for many businesses, it’s something that is coming and will be put to use by businesses outside of the retail and entertainment world (I can already imaging how real estate agents could use this.) Businesses that get how to use, stimulate adoption and promote Foursquare now could hold a significant advantage when and if Foursquare becomes the next Twitter.

Sidebar: Look for Facebook or Google to acquire Foursquare before the year is over.

Image credit: Joshua Kaufman

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  • http://www.lauralake.com Laura Lake

    Great points John as always – I just started using Foursquare and am having a fantastic time with it. Small businesses would benefit from the exposure of foursquare – entertainment and restaurant businesses especially.

  • http://www.lauralake.com Laura Lake

    Great points John as always – I just started using Foursquare and am having a fantastic time with it. Small businesses would benefit from the exposure of foursquare – entertainment and restaurant businesses especially.

  • http://www.ducttapemarketing.com/blog ducttape

    Hey Laura – great to see fellow Kansas City Foursquare users on here – we need to get more KC folks going!

  • http://www.patrickkaine.com PatrickKaine

    Very good article! This allows those non-techy business owners to see what their tech saavy clients are using.

    A FourSquare user with 200 followers on Twitter and 200 friends on Facebook who checks in at your business advertises your business for free to 400 people! This is power!

    I suggest trying Gowalla. I have tried both services and feel that Gowalla is superior in my area… (I have no affiliation) This is my post on it http://www.patrickkaine.com/2010/01/foursquare-

    I believe that Social Media will be the #1 media in the not-to-distant future, a small business owner who jumps in now will win this game.

  • Hutch Carpenter

    Was thinking along the same lines John. I'd actually like to see Foursquare and Jack Dorsey's Square hook up. Together, I think you've got the makings of a powerful social CRM system for small businesses.

    Full write-up on this idea at:
    http://bhc3.wordpress.com/2009/12/14/foursquare

    And for good measure, Foursquare's biz dev guy was a fan of the post:
    http://twitter.com/tristanwalker/status/6670448840

    Hutch

  • http://www.ducttapemarketing.com/blog ducttape

    Actually the math is better than that. Those 200 Facebook friends may end up touching thousands through wall posts

  • http://www.ducttapemarketing.com/blog ducttape

    Hutch, I would love to see that but who knows what the future holds – Foursquare is a hot pick-up right now for somebody.

  • http://www.theparklanepost.com Lisa Frank

    A key challenge for small business owners is getting the word out about their business or service. Word of mouth marketing has evolved from the paid campaigns of years past to services such as Twitter and Foursquare. As an everyday consumer, I am much more likely to trust the word of my friends (or friends of friends) when it comes to trying out a new restaurant, spa or other establishment.

    It is an exciting time to be both a small business owner and in marketing. Tools such as Foursquare also give the entrepreneur something that was lacking in direct mail or email campaigns – the ability to identify and speak with their must ardent supporters. I like your idea of identifying frequent guests to a business, but would take that one step further and invite those individuals to participate in feedback sessions or focus groups. The review aspect has the potential to be the most beneficial or damaging to a business, so owners should be prepared to monitor and respond to feedback.

    Its an interesting prediction that Foursquare will be purchased by Google or Facebook. I'll keep my eyes open to see if that happens. Foursquare may also want to look at teaming with group buying sites such as Groupon to further enhance the offering to the consumer.

  • http://thestartupkid.com/ Devin Chasanoff

    Although I believe geolocational services like this are the future in social media, I think there are 2 problems with this type of service:

    1. It's a little creepy that anyone can just find you anywhere once you've checked in.
    2. I don't think cell phone service is quite there in terms of speed and reliability, despite the advancement of cell phones (which are really just small computers at this point)

    My question is how does Foursquare make money?

  • http://davidsoxman.com/ David Soxman

    John,
    I joined and then blogged about Foursquare about two months ago, just as it came to K.C. Smart business owners will definitely consider it in their social media mix, and likely they'll be ahead of their competition.

  • http://www.ducttapemarketing.com/blog ducttape

    Hey David, good to meet another KC Foursquare user!

  • http://bizdharma.com/ Chanda | BizDharma.com

    Quite true.
    Simple Concept + Rock Solid Technology + Cool UX + Fun = Huge profits and awesome media hype. I believe with the advent of foursquare we will definitely see more laggards following up with them and copying the concept.

  • http://www.facebook.com/Mhfeder Marcus Feder

    Thanks for another great post, John.
    After looking at Foursquare for a while thinking, huh?, I joined and used the browser on my phone to check-in at many eateries and bars. Over the past weekend, the Palm Pre got its own Foursquare app and it works pretty well.
    Before your article, I thought it would be a pretty good idea for a restaurant or bar owner to get involved. But since reading your post, I figured why not get my business listed too? I have a small kitchen appliance and air conditioner company in North Hollywood and figured I could offer free delivery or % off discounts.

    We'll see how it unfolds. Thanks!

  • http://www.afhill.com Andrea Hill (afhill)

    Thanks for this! A great reason to check the service out, if it's more than just an amusement. I've resisted joining FourSquare or GoWalla but this seems to indicate there are some more benefits than just “being social”

  • http://www.ducttapemarketing.com/blog ducttape

    We've all had enough being social, let's find some ways to make bank in 2010 :)

  • http://www.ducttapemarketing.com/blog ducttape

    Hey Marcus, I think that's the right attitude with some of this stuff, test it out a bit. At least the price is right.

  • http://www.afhill.com Andrea Hill (afhill)

    Good call: instead of talking about “monetizing” social media, let's just switch to “making bank with social media” (making bank on?)

  • http://intlnat.com/ Linda C Smith

    Once again John your blog is where I can find the best description of “newfangled” technologies. I'm just getting 'good' at Twitter and now I have to add 4-square? Seriously, you make very good arguments for the value of this type of technology, especially the “online offline” point above. The allure of a “game,” however, is lost on someone like me…I simply don't have the time to spare.

  • http://www.ducttapemarketing.com/blog ducttape

    Type your reply…The good news is that you don't have to care about the game part just know others do and that can lead them to promoting your business

  • bjemerson

    As an early Foursquare advertiser, I'll throw in my 2 cents. The guys at Foursquare have been great to work with and are really open to feedback and ideas on how businesses can engage with users. For those interested in seeing how the “Nearby Specials” work on an iPhone, here is a video: http://www.youtube.com/watch?v=l77wU2bp6lw
    Having the number of check-ins for a given period (campaign) is great information. Once they complete development of the advertising model, I expect that there will be a pay-per-click (or check-in?) structure.

  • http://www.ducttapemarketing.com/blog ducttape

    Thanks for real live perspective. I know when I wrote to them a d wondered why Kansas city didn't make the first list of cities they immediately added it. OK mYbe they were doing that anyway but I'll take credit for moving the
    to action

  • http://www.responderx.com ChrisDonaldson

    Please Lord, let Twitter co-founder Jack Dorsey come up with a better name than 'Square'.

    I wish they had FourSquare in the Bellingham, WA area. From my lips to God's ears.

  • http://zen-marketing.blogspot.com Brian McDonald

    John, love this post. I use Foursquare in Raleigh NC and it provides information that I used to get via the newspaper. With print media dying, geo-location services that offer word of mouth marketing fill the void of where to go, what to eat, etc. I agree with you that Foursquare will be purchased by Google or some other large company.

  • http://detroit.fwix.com Jamie Favreau

    Thanks for the review of Four Square. It seems even my not as techie friends are being involved in it. I do see the point with your explanation but I am NOT a huge fan of the geo software. I guess I never have been. If I get a small business as a client it could be fun especially if you are doing a pub crawl or something.

  • http://www.businessbuilderbookclub.com Joy Johnson

    I just plugged in “Providence” – which I think of as a thriving metropolis, and it said, “You're near New York, NY”. I guess we have a very long ways to go.

  • http://www.businessbuilderbookclub.com Joy Johnson

    I just plugged in “Providence” – which I think of as a thriving metropolis, and it said, “You're near New York, NY”. I guess we have a very long ways to go.

  • http://www.ducttapemarketing.com/blog ducttape

    Might be the game nature of it that is attracting your so called non-techie friends.

    Agree with the pub crawl but could also see a florist or real estate agent using too.

  • http://www.ducttapemarketing.com/blog ducttape

    They are adding cities but it may be a while before RI gets much love :(

  • http://www.yaffetidbitsblog.com mikemcclure

    Love it! I'm going to start recommending some of these ideas to clients right away. Just started using foursquare myself and didn't realize all that was available. I had heard of places offering deals for mayors, but didn't know how they could sign up and send offers. We've helped some clients with social media promotions, but this takes them to another level. Thanks for the insight!
    Mike

  • http://bestseospecialist.com/ Sachin

    I think I am going to sign up with Foursquare. This is a big help for small business owners for their promotional campaigns. Aside from that, it incorporates social media which is a great marketing strategy.

  • ilearningglobal

    Wew!.. Cool application..Fun to learn..I'll suggest this to others as well, this one would really help them in their business..Thank you for sharing!

  • http://twitter.com/austinklee Austin Lee

    I agree that Gowalla is better. It is also a game. They could do a few things to tighten it up, but over all its better.

  • http://twitter.com/KatieFelten Katie Felten

    John, Great article, it took me a bit to understand Foursquare but now am totally addicted to it…and I am starting to see local Milwaukee businesses (7 so far) taking advantage and rewarding users for checking in and special offerings for the mayor. I also am in the process of putting together several workshops for local business owners on how to tap into this market.

  • Johnny Canuck

    What about privacy? The last thing I want is for the local cat burglars to know that I'm out of town for the week…

  • http://www.ducttapemarketing.com/blog ducttape

    Privacy is always going to be a concern, but understand that you would have to give the local cat burglar permission to know you're out of town.

  • http://www.ranchhandbumpers.net/ Ranch hand bumpers

    I think the simplicity of the service and the competitive element can really make this a winner

    Without trying it, just reading your description it sounds complicated and like feature overkill and yeah, they will add more features… really the right way to go with mobile apps?

    Yes, their app provides incentives for 'checkins' but they are in general something tedious and maybe the next iPhone OS version doesn't require it anymore.

    Will be interesting to see how reward systems can catch on in the mobile world.

  • Ben Blakesley

    They're already ahead of you…In case you need a list of everyone who isn't home right now: http://pleaserobme.com/