Foursquare

An Emerging Communication Tool

Foursquare is a local based network tool, founded in fall 2008 by Dennis Crowled and Naveen Salavurai. Today it counts nearly 30 million users worldwide and it’s still growing.

Foursquare is not only useful for private users, but can be used for business purposes as well. Especially for supporting a company’s marketing communication mix, Foursquare provides a lot of features. Be it the customized recommendation of a company  to the customer or the winning of a company’s own so-called « badge » which addresses customers in a playful way. That Foursquare features can be used not only in theory, but also in reality, this has been shown by Starbucks in many different ways. Of course, not everything about Foursquare is just perfect. As any other tool, Foursquare has its strengths and its weaknesses. And there are trends which can be pointed as opportunities but also as weaknesses which should get managed by Foursquare.

Background of Foursquare

Foursquare was founded in fall 2008 by Dennis Crowled and Naveen Salavurai. Both partners met at work during 2007 in New York city and started to build the first version of the tool a year the following year. In 2009 they launched Foursquare in Austin, Texas. Today, Foursquare has nearly 30 million users worldwide and millions of check-ins are made by users every day. In fact, over 3 billion check-ins have been made since the site's launch. (Foursquare, 2013)

Foursquare is used by both individuals and businesses and it is free of charge (Foursquare, 2013). However, there is a possibility for businesses to pay for an upgrade of their profile. This upgrade includes for example getting statistic data of the visitors in their stores for analyzing (Patel, 2010). Foursquare can be used on the computer as well as on the smartphone, which has further increased the number of users (Foursquare, 2013).

With regards to the common user, Foursquare could be described as a city guide, and even considered as a network tool or a friend finder. In other words, Foursquare is a locally based social network tool.

A main function of Foursquare is called the “check in”-tool. The users can “check in” to places they visit in real life through their smartphones. Through the use of WIFI, Foursquare is able to locate each users are and list nearby places. Then the user has the opportunity to choose a place where they want to "check in".

Image1: Check in on Foursquare

Another feature allows users to “like” a company’s page or a place. The “check in” or the “like” appears on their profile page at Foursquare. Furthermore, they can choose to share it on Facebook or Twitter if they wish.

Image 2: Connection between Foursquare and Twitter

Users have the option to leave tips and make comments on places they recommend. It is also possible to find out where other people, for example the users' friends, have been by looking at their “check-in”s. As an user you can see what has been recommended in your area or search after good places to visit, for example restaurants, coffee shops, stores or other kinds of spots. (Corcoran, 2010)
A main element which distinguishes Foursquare from its competitors are the so-called “badges”. Badges are little emblems which are shown on the user’s foursquare profile (Wiesner, 2010). Every time a user “checks in” somewhere the user earns “badges”: this creates a feeling of a game. In doing so, badges create a feeling of a game. The goal is to have more badges than everyone else. (Mozdzer, 2011)  

Image 3: Foursquare badges

Foursquare and its environment

To analyze Foursquare’s position compared to its competitors and environment, the authors have been using a SWOT-analysis.

Strengths

Foursquare’s strengths can be seen from an individual as well as a business perspective. As a tool with a unique connection between game and reality, the feature of collecting badges makes it challenging and fun. Consumers are attracted as tips and recommendations can be shared between them. However, it is not only profitable for the common user, but businesses can gain value as well (see “Foursquare and the marketing communication mix”).

Weaknesses

A weakness concerns the advertising on Foursquare. A large part of Foursquare's profit consists of its advertisements. However, when there are too many ads, users tend to feel annoyed and skeptical. The tool's existence depends mainly on the users' willingness to recommend places to each other. If too much interference from advertisements make users feel as though they can no longer trust the recommendations on the page, they will stop using the tool and this would cause many problems.

Another major weakness is that Foursquare isn’t actually that different from its major competitors. A lot of companies are providing tools which work almost the same way as Foursquare. For example, Facebook has a “places/nearby-tool”, and Google has the Google+location, Yelp, Gowalla, Loopt, Brightkite and Whrrl. For a service like this, it is not practical a lot of operators to be competing with each other as the market does not provide space for that many operators.

Opportunities
The digital trend is going on and on and mobility is getting more important. More and more people are using smartphones with which they have access to the Internet all the time. This is an opportunity for Foursquare to get integrated into their user’s daily life. Today Foursquare have over 30 millions users, yet not all of them use the tool on a daily basis. The company should aim to help users feel as though it were natural to “check in” everywhere they go, as well as always search for restaurants on the Foursquare-site before actually going there. This behaviour would provide value for both businesses and individuals.

Threats
One threat that Foursquare are facing today is the trend of privacy importance. A lot of users might feel that they are watched or stalked, either by other users, businesses, or by the tool itself. In fact, the issue of privacy is becoming far more important in this day and age. Users leave a vast amount of personal data within the internet's database.  Some people don’t like the idea of social networks having every kind of information about their lives; such as where they go, what they look like, what they are interested in, and who their friends are. Many are scared about losing the control of the information they spread (The Daily Telegraph, 2013). Foursquare should concentrate on providing information concerning exactly how they are using users’ information and who has access to it. Another threat could be the lack of internet connection in some places. For example, travelers, which could be a great group to target, might not have internet connection abroad which prevents them from using the tool. Foursquare must also recognise the fact that trends tend to come and go quickly, especially on the digital market. The digital market is constantly developing and users get tired of each new tool as others develop.  Foursquare could prevent this from happening by constantly working on innovation and development.

Foursquare and the marketing communication mix

With regards to the business side, Foursquare can provide a way for firms to present themselves and acquire new costumers. They can offer a value to the consumer, such as “badges”, discounts or samples, which will attract the Foursquare-users to visit their physical store. It can also aid businesses in identifying their most loyal customers. It then becomes easier for business to communicate and reach the consumer.

Foursquare proclaims itself as a source of inspiration (Foursquare, 2013). This point makes Foursquare useful to integrate into a company’s marketing mix. Foursquare provides users with personalized recommendations and offers.

Image 4: Customized recommendations

The tool also bases recommendations on places where users or their friends have been to. Companies can make use of this kind of service by figuring out who could fit to their target group. They can then focus on consumers who would be interested in their service/product because Foursquare already provides a suitable recommendation to its users. In other words, customers get recommendations from Foursquare which are more relevant and appealing. Therefore the company gets recommended by Foursquare to people who might be interested, which in turn helps to gain new customers. The customers might pay even more attention to those recommendations than to common advertisement channels like TV or radio spots or posters. Since those common advertisement channels often address the broad mass and don’t have such a big impact on people anymore, companies might catch much more attention by being user-specifically recommended by Foursquare. Consumers tend pay much more attention to it, not only because they get customized recommendations, but also because users actually want to get those recommendations by signing up to Foursquare. In addition, users are more likely to trust these types of recommendations than ordinary advertising, since some recommendations are provided by other users. Taking this into account, one can say that Foursquare encourages “word-of-mouth”-advertising: which is extremely important for companies today. In conclusion, Foursquare is a convenient way to reach customers and increase awareness. The “word-of-mouth” component helps to convince people of the company’s product/service is right for them. Foursquare can be a effective promotion tool which should be added to the company’s promotion tool collection.

Starbucks and Foursquare

The world-wide coffee company Starbucks accounts for the loyal users of Foursquare and benefits from the Foursquare’s functionalities. Among other things, this is proven by the Starbuck’s creation of the so-called “Barista badge”. What makes Foursquare special compared to other local-based social networks is the playful feature of getting badges. By creating the “Barista badge”, Starbucks encouraged customers to visit their coffee shops and to “check in” at every coffee shops they have been to. By “checking in” at a coffee shop using Foursquare, customers approached their goal to unlock the “Barista badge” (Van Grove, 2010).

Image 5: Starbucks Barista badge

Another way of using Foursquare as a marketing tool is through Starbucks’ engagement in the (Red)RUSH to Zero Campaign. Starbucks promised to donate $1 for every check-in done during a certain period back then (Garun, 2012).

Image 6: Starbucks and the (Red)RUSH to Zero Campaign

On one hand, this encouraged customers to visit Starbucks coffee shops and made them feel better by indirectly helping the campaign when visiting Starbucks and donating money. On the other hand, by engaging in a campaign like this and donating money for a good cause, Starbucks might have improved their image at the same time.  

Foursquares proves itself to be useful to support a company’s marketing communication mix. And the Starbucks example shows : There are different Foursquare functions which can be used to approach customers.

Elin Hessling & Carmen Mattich

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