One of the ironies of the Internet is that, although it has the power to connect consumers across the world, it also has the potential to make local connections more intense. This is particularly true thanks to the advent of location-based services, which can make users passively aware of each other's nearby presence.
For small businesses, the appeal of such a service is obvious: There's an opportunity both to draw in new customers and forge deeper connections with existing ones. But, despite the fact that using such services is free, the vast majority of small businesses haven't taken advantage of location-based services. Here are five that have.
1. DBA Barbecue—Atlanta, Georgia
DBA Barbecue offers customers an extra reason to use their Foursquare checkin: free food or at least discounts on food. Sometimes that means boiled peanuts, other times it's a discount on a beer or cocktail. Either way, it's a powerful incentive. Owner Matt Coggin says that he often gets the highlighted item for free from suppliers who want the exposure, so he's not losing any margins. Another selling point of using Foursquare, Coggin says, is visibility: Since no one likes to eat in an empty restaurant, users can see how many people are currently checked in and then decide whether to swing by.
There are other perks as well. As Coggin has previously outlined, he uses Foursquare to forge personal connections with customers. He likes to stop by customers' tables and thank them for checking in. If he doesn't get around to that the first time, he'll often note their previous checkin and thank them for coming a second time.
2. AJ Bombers—Milwaukee, Wisconsin
Joe Sorge, owner of AJ Bombers, is such a big fan of Foursquare that he wrote a book called FoursquareWorks. (He also wrote a book called TwitterWorks.) Sorge points out that AJ Bombers is now up to 9,000 checkins in a city that had just 400 Foursquare users last year. Sorge capitalized on the growing fanbase when he recently ran a "Swarm Badge" promotion. The idea behind a swarm badge is that if you can get 51 people to check in simultaneously, all of them get the badge. That wasn't an issue with the Swarm Badge promotion AJ Bombers ran: 161 people checked in and unlocked the badge.
One more example? The restaurant's Foursquare page featured a tip about the Barrie Burger—from that alone (there was no advertising), sales for the item grew 30 percent in the first week.
Boloco, a burrito chain, recently took advantage of a new feature from SCVNGR called LevelUp. As explained in this video, LevelUp adds a gamification component to typical loyalty programs and also addresses the "one and done" aspect of most Groupon-like deals. In Boloco's case, the idea worked like this: Level 1 offered $5 for $10 worth of food and drink. When the customer returned to the restaurant, they could unlock Level 2, which yielded $10 for $25 worth. Those who visited a third time got to Level 3, which provided $14 for $45.
After running the program (which is in pilot in Boston and Philadelphia right now), Boloco saw 1,396 Level 1 deals purchased. Of those, 30 percent bought in to Level 2 and 26 percent of those people went to Level 3.
4. Monique's Chocolates—Palo Alto, California
A year ago, Mark West, the owner of Monique's Chocolates, did a little experiment: He bought a half-page ad in a local magazine touting a "buy one, get one free" offer for about $350. He offered the same deal on Foursquare for free. The print ad yielded one new customer, while the Foursquare deal netted 30-plus, four or five who became repeat customers.
West says he likes the geographic nature of Foursquare, which doesn't blast such deals at people who will likely never come by his store. He says that even Foursquare's mayor program has worked to his advantage: "There's now three different people who are competing to be mayor," he says. "It's fun." West says he's looking to launch a location-based loyalty program to bring things to the next level.
5. Colibri Cuisine—Austin, Texas
Colibri, a Mexican food truck, had no Foursquare Tips in early March and decided to do something about it. The venue started offering a free churro (with purchase) for anyone who left a tip (a note to other users, not a gratuity). Colibri now has nine tips—some from Foursquare employees who were in Austin at SXSWi -- which show up prominently in Foursquare's Explore tab. The placement has helped drive foot traffic.
Colibri also used Foursquare to lure customers in during a typically slow time of day, from 9 to 11 pm, before the late night crowd makes its way out of the bars. In the first week the special ran, the truck got seven new customers.