The article begins by describing a restaurant that has taken advantage of Foursquare, the “geolocation service that allows customers to claim special offers and earn badges by “checking in” to certain locations.” People who checked in within a few blocks of the restaurant were given special offers, and customers who checked in multiple times were given a free appetizer or dish. This restaurant described, a seafood chain in the Bay Area, has already had 1,400 people check in more than 2,800 times since the application’s introduction a few months ago.
Geolocation services is a great new marketing tool. Businesses such as restaurants, bars, or retailers rely on a heavy influx of customers each day in order to stay successful. Customer numbers is one of their main concerns. Applications such as Foursquare give these businesses a chance to make a connection with customers. They provide incentives for customers to come into the venue by sending special offers to their mobile phones when they check in. Since rewards are typically bigger for customers who check in multiple times, these applications encourage customer loyalty. The benefits of such services have recently been highlighted by Facebook, which just introduced a similar application called Facebook Places. With this, customers can not only receive the benefits of checking in, but they can also share their location with their friends and find out where other friends are.
As the article details, these geolocation services have many uses. They can be used to communicate and establish relationships with customers, offer rewards, create social networks, and gather data about customers. They can also be used as resources for directories, guidebooks, and review sites. This makes them not only appealing to loyal customers, but also people such as tourists who are not familiar with an area and are simply looking for some place to go eat dinner.
Right now, Foursquare has roughly 3 million users, with over 1 million check-ins per day. Check-in points for Foursquare are literally all over, with even one at the North Pole. While Foursquare is a leader in the industry, it certainly has competitors. Similar services include Gowalla, Loopt, Whrrl, Brightkite, Booyah, Where, and Scvngr. Additionally, Twitter, Yelp, and Google are in the process of adding their own locations-based services.
With so many alternatives, it will be hard for Foursquare or any of the other companies to make a profit. Right now, Foursquare is most concerned with building its customer user base and has no current business plan. I believe that as it grows in popularity, more and more businesses will realize its benefits and will be willing to pay for its services. However, unless the competing services also begin to charge businesses that employ them, restaurants and bars could merely switch over to a similar service that is still free of cost. Foursquare’s decision to first build up its clientele is smart because hopefully customers will be reluctant to switch over to a different one once they have become familiar with Foursquare.
http://www.nytimes.com/2010/10/07/business/smallbusiness/07sbiz.html?pagewanted=2&ref=technology
Eileen Browne
No comments:
Post a Comment