Check-in here if you want to win

Foursquare is a location-based social networking application. It allows users to  “check-in” their location at a venue and connect with friends, then they can have reviews and ratings about the place, and after a certain number of “check-in” in a particular place, they can obtain some deals.

This application is based on current social trends : consumer empowerment, and also the lifestyle of the ultra-connected “Generation Y”. These trends are highly connected in the sense that this generation masters social networks, and use it more and more to share one’s experience, on the other way, today’s consumer raises their voices on these social networks, for better or worse for the brands.

But marketers also have an interesting communication tool into their hands. If used efficiently, Foursquare allows them to really connect with their customers. It can help them to develop loyalty, raise awareness and develop sales. Nevertheless, brands also have to take into consideration concern from consumers about protection of personal data, and privacy.

Launched in 2009 in New-York by Dennis Crowley, Naveen Selvadurai, Harry Heymann, Nathan Folkman et Mike Singleton, Foursquare is a location-based social networking through a mobile application. It allows users to post their location at a venue (called “check-in”) and connect with friends. Beyond simple “check-in”, the user can be transformed from now on into a real tourist information office by sharing his good plans. The playful aspect comes from the possibility to accumulate badges relative to specific places.

Foursquare by the numbers (last updated January, 2013) :

  • Community: nearly 30 million people worldwide
  • Over 3 billion check-ins, with millions more every day
  • Business companies : more than one million companies use  the merchant platform

Once the application downloaded and the user’s list of Facebook and/or Twitter contacts imported, he/she is invited to make a "check-in", i.e. indicating the place where he/she is at the moment. It can be a coffee shop, a subway station, a store... His/her contacts will thus be informed about his/her real time location. The user can also add rates and reviews about the place. According to its creators, Foursquare is a social tool which allows to share good addresses, and discover a city while having fun with a rewards system.

To incite the user to make most "check-in" possible, Foursquare set up a system of badges to be collected. The user can unlock them depending on the number of "check-in" he made: Adventurer for ten "check-in" in ten different places, School Night for a "check-in" after 3 am during a week night... In total, more than thirty badges are available.

Besides the collection aspect, Foursquare counts on the competition between its users. If you are the person who registers most in a given place, you become the "Mayor". A privilege that you keep until somebody makes a bigger score than you. Being Mayor is not only honorary: some stores reward the happy holder of this title with special offers, such as free drinks.

Foursquare is positionned on a new market, which is geolocalization and the target audience can be defined as “early-adopters”. Furthermore, the brand targets younger people, often called “Generation Y”, born with the Internet, who master the new technologies and social media. According to the american Radio Shack, Foursquare users would have higher incomes than the average population.

In terms of marketing communication strategy, Foursquare allows companies to stimulate word of mouth which will increase visibility, and awareness. It is much more subtle than a classic advertisement campaign because the users, through the “check-in” and their rates and reviews are those who communicate for the brand, like a spokesperson.

On another dimension, brands can integrate Foursquare as a full-fledged tool in their communication campaign. Thanks to the application, they are able to deliver a message to a precise target segment (the one described above).

From a pure marketing view, Foursquare can really help developing a customer loyalty strategy. Thanks to the reward system, customers are more likely to develop loyalty towards a brand, which itself will be rewarded  with higher penetration.

Foursquare leveraged its strategy on the positive presages of geolocalization on former communication tools such as Facebook. After all, social media, such as Facebook or Instagram are complementary with Foursquare in the sense that they have the same goal : allow consumers to share their experiences.

Foursquare, among other communication tools, can be seen as a response to consumer empowerment. We are living in a fast-growing environment and people have active and busy lifestyles. Lately, consumers showed that in this environment, they were craving for sharing their different experiences and also learn from other ones. This is one of the reason of the success of geolocalisation. Nevertheless, consumers share all type of their experience, both positive and negative, this is why brands, confronted to  this empowerment have to find a way to make it profitable for them, knowing as word-of-mouth is predominant in a smaller and smaller world.

Jimmy Choo, a luxury shoes brand, ran a real-time treasure hunt around London, using Foursquare. The objective was to get to the indicated position as fast as possible to be the first one to win a pair of shoes of the latest collection. More than 4,000 people participated in this treasure hunt. This event has given to the brand a strong media exposure in the UK within the magazines, websites, fashion and even marketing blogs. It has carried off a resounding success as the brand increased its sales by 33% the day after the operation (source : Fresh Network). Jimmy Choo’s choice to use Foursquare as a communication tool in their communication strategy. Indeed, Jimmy’s Choo consumers are young women, aged between 20 and 40 years old, urban, which follow the trends and considering the average price of the shoes, with higher income than the average population. Compared with the target segment of users Foursquare

Another example, the bank American Express has concluded an agreement with Foursquare to gain more visibility to its members, such as clothes retailers H&M and Sports Authority. The company obtained excellent results. Every customer who made a purchase with an Amex credit card attached to a Foursquare account was rewarded with a discount.

Mister Edward P . Gilligan, vice-president of American Express, confessed in an interview in the N.Y. Times that the national launch came from tests made during South by Southwest music and technology conference: "On average, those in the program spent 20 percent more than American Express cardholders who did not have access to the special deals”.

As a senior analyst at the Aite Group pointed out, “Partnerships like the American Express one will appeal to merchants because the pitches are aimed at those who will actually use them. In addition, businesses that work with Foursquare and American Express will be able to abandon paper coupons or even the need to scan their phone’s screen at a terminal. The rewards will be tallied behind the scenes with each swipe and tap.”

It looks like the industry is evolving around delivering more sophisticated, geographic-based offers and is becoming more and more powerful.

Despite its numerous advantages for both brands and consumers, the location-based service has been pointed at, included Foursquare, concerning privacy issues. Indeed, people are being more and more concerned with the protection of their private lives, so if this concern is not reassured by the actors, there is a real risk of viability for communication tools like Foursquare. The brand has already made some attempts to tackle this problem, but consumers' fear is still here. A social networking survey showed that two-thirds of respondents said they would not use mobile technology that shows to people on social networking sites where they are located. Brands have to take this into consideration when shaping their communication campaign.

Moreover, even if Foursquare is an emerging communication tool, it is not surprising to notice that other start-ups also bet on location-based service, such as Gowalla, Foursquare’s main competitor, considered as being more precise (the application verifies via the GPS coordinates that you really are in the place you claim to be).

Last but not least, there is one thing which remains unclear: the ability of Foursquare to attract potential customers' interest beyond the small circle of technophiles and to seduce the general public.

Thuy Anh Nguyen, Daba Diokhane

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