Location-aware applications have been a hot trend this past year after the leaders in "Check-In," Foursquare and Gowalla, took SXSW by storm last spring. Surely these two companies were not the pioneers in the field (as this author had been using similar location-based social media app Loopt for several months prior), but their strong presence at the national event, backed by sleek interfaces and updated technology, brought the attention of location-aware apps to the forefront of social media. The response from users and industry analysts alike has been mixed at best with a few early adopters (yours truly included) singing their praises while a larger majority either dismissed the tools or frowned upon them for various reasons including privacy or redundancy. However, as new contenders continue to enter the space and marketers become a little more savvy, industry players are beginning to realize that there may be more use to these tools than they were previously given credit for. Here we will analyze the social versus business value of these services and discuss how new players are changing the nature of the game in the right direction.
Early services in the location-aware field, such as Loopt and Britekite, and even more recent players like Google Latitude, Gowalla and Whrrl, have focused their services primarily around the social aspect of checking-in. These services allow users to broadcast their location to their social circles by checking-in at a venue, often accompanied by a short comment or picture. The goal is that nearby friends will see your location and choose to join you. In theory this sounds fun, but many concerns and short-comings quickly arose - chief amongst them safety. But the real problem was that there were too many of these apps and none of them were offered by the major social players - Facebook and Twitter. Users had to rebuild their networks all over again, convince friends to use the new services and, frankly, remember or continue to use the services. An update to have these apps post your check-in directly to Facebook seemed like a possible solution, but it was nothing that posting to Facebook on your own or sending a text message couldn't already accomplish.
The real solution is that the services aren't being used for the correct purposes. Don't try and fight the market leaders. Facebook and Twitter already own our social networks. Anything we want to communicate directly to our groups of friends, colleagues and acquaintances will be done through these well established channels. Instead, focus on how checking-in to a location can benefit the user and the venue. This is where Foursquare and subsequent derivatives are beginning to do things right.
Location-aware services need to be entirely focused on direct marketing - knowing exactly who your customer is, where they are, how often they go, and providing them with the rewards and incentives they have earned for their loyalty and advocacy. Most people are aware of Foursquare's mayor status, but there are so many more reward tiers that Foursquare allows, such as loyalty programs, first time visitor promotions, and even one day only sales. Take a look at what Cynthia Rowley (Mashable) is doing - a one time promotion, for two hours, where anyone who checks in gets a $25 gift card and 15% off. Brilliant! Veteran Loopt introduced an additional service called Loopt Star which has a similar, but more refined, effect. Check in twice at Gap with Loopt Star and save 25% (Forbes). Not only does this provide a great incentive for users to visit and return to a restaurant or store, but it also costs nothing for the venue to market the promotion and it gets plastered all over Facebook and Twitter every time someone checks-in. That is where the value lies.
An additional benefit for the venue lies in reviews and referrals. Yelp is a prime example here as one of the largest online peer review sites. Users check in to a location and proceed to write reviews, post photos and share their experiences. In fact, most of the location-based apps allow for Twitter-esque 140 character shout-outs, which can be shared via Facebook. Give the customer something positive to shout about and reward them for doing it and you have a perfect platform for free marketing that is golden for large corporations and small businesses alike.
Of course, problems still exist, largely in that these types of promotional uses are still few and far between. Getting $1 off your coffee after battling to be the Foursquare mayor at your local Starbucks hardly seems like a strong enough reason for users to maintain another social media tool. There's also the fact that there are a lot of new apps being developed that are quickly flooding this space and its far too soon to pick a winner. Big names like Foursquare or Gowalla may have the recognition and high number of daily check-ins (Foursquare is estimating 1 million check-ins per day [Twitter]), but new services like Loopt Star and WeReward are rewriting the rules, creating apps that blatantly depict the value of checking-in. Finally, there is the problem of corporate buy-in. Most businesses, large or small, are still trying to figure out what it means to operate in the social media realm, maintaining a relationship with their fans, providing industry news and insights, and engaging the consumer directly on Facebook and Twitter with storefronts, promotions and contests. If most brands still don't see the complete value of social media, how can we expect them to by into another fledgling tech trend?
The solution is to directly engage the businesses that have the most to gain from localized, low cost advertising - small businesses and restaurants. Although every business is trying to increase sales right now, small businesses especially are suffering and can benefit greatly from this service in many ways. First is awareness. After establishing a partnership with Foursquare, the app informs users every time they are near a venue with a special offer. This will immediately help raise awareness of unknown venues and encourage first time visits. Second is rewarding loyalty. Everyone is familiar with loyalty cards that reward a visitor for their 10th purchase. Location-aware apps offer the same tool, but without the need for printed cards, special hole punchers and with the bonus of a network-wide shout out every time a hole is punched/check-in occurs. Finally, it helps to venue reach out to a new audience on their terms. Today's younger audiences aren't being exposed to direct mail, ads in the paper or even commercials on the radio. They're taking suggestions from friends and social media. By connecting with this audience on their terms, not only are small businesses able to tap new audiences, but the audience in question's immediate perception of the business will be tech savvy and modern, which they can relate to.
As social media marketers it is our job to promote these services to our clients and continue to help them grow. The more business partner with location-aware websites, the more users will join, and so on, forming a reciprocal cycle. (*Shameless Plug*) As my clients can attest, the benefit is there and the value is measurable, the hard part is just taking the first step and learning more.
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