What is geo-location and why should you care?

This is actually Tom's Restaurant, NYC. Famous...

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So what does Foursquare and Gowalla have to do with your business?

These companies are referred to as geolocation or location-based services.  Would-be consumers use these services to ‘check-in’ to a variety of retail locations.  Checking-in racks-up virtual rewards.  Foursquare awards badges and Mayorships while Gowalla hands out Pins.  The more frequently one visits a specific location, the more likely they are to become Mayor or collect the most number of Pins.

There are other differences between the two major players — the speed with which they deliver information, the sensitivity of their ability to show other business locations, etc.

There is also a social component to these services in that each check-in is shared with their friends, which is basically promoting those businesses frequented.  One of those businesses could be yours.   What these services boil down to are a games for adults with smart phones.   Best news is adults seem to love it as there were 3 times the number of check-ins in 2010 for Foursquare versus a year ago and the competitive landscape is heating up with Yelp , Where and other spin-offs throwing their hats in the ring.

Advantages?

The advantages to a retailer or any small business owner is that each check-in is shared publicly with friends.  Plus it costs business owners nothing to claim a listing and see what happens.

Once the business listing is claimed, the other advantages include:

  • Reports of who has checked-in at your location as well as who checks in the most frequently, see when you get the most foot traffic, and get a gender breakdown of your customer base.  This can be helpful in identifying your most loyal customers who might act as impromptu promoters for your business in other social venues like Facebook.
  • Offer specials to regular customers and prospects: Foursquare and Gowalla make it easy to offer a special to users who check-in at your location. You can set how often a user gets a reward and what it is (e.g., a free cup of coffee for every 5 check-ins or 10% off for the Mayor). You can change the special as often as you want and there’s no need to manage punch cards.
  • Attract prospects via specials: Foursquare, in particular, alerts users to nearby specials. If your business is offering a special and a prospective customer checks in at a neighboring location, he might be lured in to your establishment by the deal.
  • Test offers to customers: Using the reporting details that come with these services, you can see what deals and terms are most appealing.

Disadvantages?

Well, as a marketer I don’t believe it is in the best interest of any business to ‘train consumers to deal hop’.  It is my personal bias that continuously offering discount enticements to visit one’s place of business does just that.  You are basically training your customers to only visit you when you have a ‘deal’.  I don’t think that is a very smart trick to be teaching your customers.  On the other hand, if the business is a start-up and it needs to build a clientele, these services could be helpful in getting it established more quickly than traditional advertising techniques.  And testing of promotions is always a wise first step for any business owner.  Why bother with a promotion unless you know it has appeal?

Also, these services don’t make a lot of sense in small suburban or rural environments.  The real value is for businesses competing in urban environments where getting mind share can be an up-hill battle.

But there is the strong possibility ‘check-in’ craze so popular last year will fad and these services may have a limited life.  In fact, one popular site that tracks all things geo, ReadWriteWeb, is forecasting that this year may be the end of the check-in craze.

Bottom Line

Go ahead and claim your business with these services even if you don’t plan to offer a special in the near term.  It can’t hurt.  You can ensure that your business’ information is listed correctly and you will get a feel for how much of your customer base is checking in when they check you out.  Plus you can also begin to see the digital breadcrumbs of your trade area, which can help you in other marketing efforts.

Don’t fall in love with the tool.  hen you see participation is beginning to wane, take note.

Keep your eyes open, read the reports you get and maximize the information they provide you.  Listen for new geo-location services offering enhanced value for consumers and for business participants.

If you’ve used Foursquare, Gowalla, or any of the other geo-location services, share your experiences below.  I’d be very interested to see what small business owners are experiencing with these services.

 

Sheila Hibbard

Sheila simplifies marketing and social media for small business owners. She offers straight forward, no nonsense marketing guidance and techniques that produce results. She has four decades of experience in all phases of marketing including communications, research, strategy and social media. Facebook | Google+ | LinkedIn |Twitter

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