By KERMIT PATTISON
New York Times
CHAMIN MILLS has found a new way to give customers a poke.
Ms. Mills manages social media for Pacific Catch, a chain of three seafood restaurants in the Bay Area. A few months ago, the restaurant, already an avid user of social media like Twitter and Facebook, adopted Foursquare, the geolocation service that allows customers to claim special offers and earn badges by “checking in” to certain locations.
When people used the Foursquare application within a few blocks of the restaurant, a special offer popped up on their mobile phones: check in five times and earn a free shrimp ceviche or a Hawaiian poke. Another special rewarded customers who checked in on Foursquare with a free side of sweet potato fries. Such offers have helped lure new customers: more than 1,400 people have checked in at Pacific Catch more than 2,800 times.
“It allows you to connect with people and retain customers, which is really important to us these days,” said Ms. Mills. “It keeps people coming back.”
Geolocation services have become an increasingly important marketing tool for small businesses, especially those that depend on customer traffic like restaurants, retailers and bars. The growing importance of the services, which exploit the ability of communication networks to pinpoint the location of smartphones and other mobile devices, is underscored by the recent introduction of Facebook Places, which allows users of the Facebook mobile application to check into locations and share their whereabouts with friends.
Location-based services can play many roles. They offer customer-relationship tools, rewards programs, social networks, games, business directories, city guidebooks and review sites. They help businesses present coupons, reward loyal clientele and gather valuable data about customers.
Foursquare, which claims about three million users and more than one million check-ins a day, has emerged as the leading geolocation service for business. “We even had a check-in at the North Pole,” said Tristan Walker, head of business development at Foursquare. “So we are officially everywhere.”
But Foursquare is hardly alone. Other geolocation services include Gowalla, Loopt, Whrrl, Brightkite, Booyah, Where and Scvngr. Along with Facebook, more established players like Twitter, Yelp and even Google are also adding location-based functions. This guide, based on the experiences of small-business owners, provides tips primarily for using Foursquare, but many of the pointers also apply to other services.
CLAIM YOUR SITE The first step is to claim your business listing. In fact, your business already may have a listing and customers may be checking in without your knowledge. See if your business is listed on Foursquare at foursquare.com/search. If not, you can add it by going to foursquare.com/add_venue. You also can do so via the Foursquare app on your phone by going to the “Places” tab and scrolling and clicking “add this place.”
Look for the link on the venue page that says, “Do you manage this venue? Claim here” and follow the instructions to register. You will be asked to provide contact info for verification. Once approved by Foursquare, you will be able to manage the site, edit details, offer specials and view analytics.
Businesses can also link their Foursquare pages to their Twitter feeds and Facebook pages. And they can add buttons so customers can put the venue on their Foursquare to-do list. For more sophisticated users, Foursquare offers an application programming interface that allows developers to build their own applications on top of the Foursquare platform.
SET CLEAR GOALS The next step is to establish some basic goals. Do you want to attract new customers? Retain existing ones? Obtain better data about your clientele? Do you want to build your own geolocation services and connect them to Foursquare? Do you simply want to establish an online social network? Or do you want to do all of the above?
Once you have established your objectives, you can decide which functions are best suited to your business.
OFFER SPECIALS Many businesses use Foursquare as a digital replacement for coupons or loyalty cards. According to Foursquare, about 15,000 venues offer specials on the site. They include buy-one-get-one-free offers, loyalty rewards and specials for the “mayor” of the venue (the person with the most check-ins).
These services are free (at least for now). Foursquare remains focused on building its user base and has not revealed a business model for monetizing its traffic. Businesses can offer deals by going to the “manage specials” section on their venue page. Foursquare allows only one active special at a time, but some businesses rotate specials to keep offers fresh.
Mark West used Foursquare to entice customers with a sweet offer. Mr. West opened Monique’s Chocolates, a chocolate shop in Palo Alto, Calif., in January. Like many small businesses, the shop serves a narrow demographic — chocolate lovers who live within a few miles — and reaching its target audience is tricky.
At first, Mr. West tried print advertising, but was disappointed by the return on his investment. For Valentine’s Day, he bought a $360 ad in the local newspaper that attracted only about five customers; another ad in a local magazine cost $300 and drew only one customer.
Shortly afterward, Mr. West went on Foursquare and offered a promotion: buy one truffle and get one free. The promotion cost nothing (other than the expense of the free truffles) and attracted about 60 new customers, about one-third of whom have become regulars.
“My key is to get you here to try something,” said Mr. West. “I feel that if you like chocolate you’ll be back. From a retail perspective, your big hope is just to get the guy to show up. That’s the biggest challenge.”
REWARD CUSTOMERS Beneath the technology, location-based services are fundamentally social networks. Foursquare offers an array of badges that users can earn by visiting certain locations or doing activities — and businesses can use these to lure customers. For example, Pacific Catch hosted a party that allowed customers to earn a Foursquare “swarm badge” (awarded for gathering with 50 other Foursquare users). The Pacific Catch hostess wore a bee costume and 75 people showed up just so they could claim the badge.
“We are always looking to drive business at off hours,” said Ms. Mills. “I realized how many people are out there trying to get these badges.”
CHECK YOUR DATA Foursquare also gives businesses a free analytics dashboard with data about check-ins and customer demographics. The goal with the analytics dashboard, said Mr. Walker, was to create a powerful customer-relationship management tool. “We want to give merchants opportunities not only to learn about all their customers, but to connect with them in real time.”
The Destination Bar in New York City has used this data to live up to its name. Dan Maccarone, a partner in the bar, was an early adopter of Foursquare (in his day job he works for a technology company and helps design some aspects of the Foursquare site).
Mr. Maccarone uses the Foursquare analytic dashboard to glean valuable data about bar customers, like how they break down by gender, when they check in and with whom they check in. By doing so, he can discern patterns of how business ebbs and flows throughout a week.
Recently, the bar’s managers noticed that check-ins declined after 2 a.m. on Saturdays. In response, the Destination Bar started holding a late-night happy hour — spreading the word through social media. A rise in check-ins and sales followed. “I look at the Foursquare check-ins as a representation, like the Nielsen ratings,” Mr. Maccarone said. “You can tell a lot about your audience based on the breakdown of the people who are checking in because they are a good sample set of your regular customer base.”
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