Using Foursquare to Drive Repeat Business

Here's a rundown on how the location-based marketing platform foursquare is giving local businesses a boost.
Writer, editor, Street Fight
February 21, 2012

A marketing platform that brings in new customers, drives repeat business and costs absolutely nothing to use sounds too good to be true, but as 500,000-plus local merchants already know, these are just a few of the marketing objectives that can be achieved with foursquare. Since launching its merchant dashboard for small-business owners in 2010, the location-based platform has become the go-to service for local merchants looking for low-cost ways to track customer activity and reward loyalty.

How It Works: Smartphone users who've downloaded the foursquare mobile app can announce their arrival at restaurants, shops, gyms and other venues by "checking-in" with the click of a button. Each time a user checks-in, a notification can be pushed to his friends' smartphones, as well as his Facebook and Twitter feeds. The primary motivation behind these check-ins is points, which foursquare users must accumulate to earn virtual badges. Users also compete to become the "Mayor" of their favorite establishments—a term used to describe the person who has checked-in the most over a 60-day period. Most foursquare users view the mobile application as a social networking service rather than a marketing tool, which gives businesses the chance to reach out to customers on a more authentic level when offering real world rewards and discounts.

Foursquare In Action: Merchant activity on foursquare breaks down into two main categories: tracking customer activity and rewarding positive behavior. By keeping a close eye on the foursquare users checking-in at her store in Orange, Calif., Dragonfly Shops & Gardens owner Beth Davidson was able to determine that 58 percent of her customers were female, versus 41 percent who were male. Merchants who use the foursquare dashboard can also find out what time of day most people are checking in, which customers are coming in most frequently and how many of their customers are broadcasting their check-ins on Twitter and Facebook.

Businesses can also create check-in specials as a way to reward loyal customers and drive traffic during slow times. Restaurants that experience slow periods during lunch, for example, can offer discounts to people who check-in between the hours of 12 p.m. and 2 p.m. Scotty’s Brewhouse CEO Scott Wise says time-targeted offers—like 10 percent-off weekday lunches—have been a great way to attract customers during off-peak periods.

Why It Works: Unlike daily deal platforms or social marketing companies, foursquare doesn't charge merchants a dime for its services. That means restaurants like Scotty's Brewhouse can offer discounts to their customers without forking over a commission fee, and retailers like Dragonfly Shops & Gardens can track customer behavior without paying for the service. Foursquare has made the tools in its merchant dashboard as easy-to-use as possible, which helps small-business owners create and manage their own marketing campaigns.

Of course, foursquare wouldn't be nearly as useful to merchants if there weren't so many consumers already using it. More than 15 million people are now checking-in at their favorite restaurants and stores through the mobile platform, and roughly 20 percent of those users are sharing their check-in locations on other popular social networking sites like Facebook. Merchants that boost the number of check-ins at their establishments can improve their outreach without relying on paid advertisements.

Maximizing the Benefits: Over the years, merchants have developed a number of tips and tricks for increasing foursquare check-ins, the easiest of which is to simply post foursquare's in-store signage. At Picker’s Famous in Kirksville, Mo., owner Todd Kuhns jump-started his new campaign by putting up the vinyl window clings and posters that foursquare sends to all businesses that claim their venues online.

Businesses that get creative with the rewards they offer can expect greater benefits, as well. Foursquare gives merchants latitude in designing their own specials, which is what makes it possible for fast-food chains like Arby's to offer reserved tables for Mayors and smaller businesses like Restaurant Max in Minneapolis to offer free bottles of wine to people who check-in on their birthdays. The more inventive a company is with its check-in offer, the more likely customers are to take advantage of the reward.

Stephanie Miles is based in Portland, Ore. She writes the “Case Study” series for local businesses on Street Fight.

Photo credit: Foursquare