BrainTrust Query: Why I’m Done With Foursquare
Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.
After over 1,100 check-ins, 39 badges earned, and over 200 friends gathered on Foursquare since 2009, I’m going to walk away for a bit. In a nutshell, my reason for moving on has to do with productivity and value.
Excitement in the early days of Foursquare was sparked by my vision that local restaurants, retailers and others would be promoting specials and offers on a constantly changing basis. At the least, I thought that the coupon book business would evaporate as these same offers were communicated digitally and in near proximity to the point of purchase. With offers scarce to be found, Foursquare simply created a de-facto trail of digital bread crumbs as I checked in during my travels from Vancouver to Miami to London. The novelty of the system had me engaged in light competition with friends for check-ins and mayorships.
Soon I became bored with check-in competition as there were no rewards to be gained, whether intrinsic or extrinsic. I realized that mayorship was rigged by routine. For instance, the only way you could become mayor at my local Panera Bread or Chili’s was if you worked there, and the chance of winning the benefit offered for mayorship, whether a free beer or a half price sandwich, was just above nil.
As the location-based application market caught up with Foursquare, I expected to see the progenitor of the category refresh itself and pioneer change. Foursquare had all the opportunity to become a hub of education and marketing support for small business in local markets, but the transformation has yet to take place.
To their credit they have recruited national chains which place offers in most locales, with Starbucks and Chili’s most visible to me. They also have announced card-linked offers with Amex, Visa and MasterCard. Still, there are not enough local merchants participating. Many have not properly taken control of their locations and fewer still use the channel to promote their wares.
Balancing time invested with value received from digital networks can be tricky.
In a previous post, I wrote that "time might be the most valuable reward in a loyalty program." My time is valuable, as is yours, and triage of my social and mobile networks based on value and productivity leaves me no choice but to leave Foursquare at rest for a while. I’ll gladly return if I learn that relevant and valuable offers are being populated in the channel.
Discussion Questions
What’s the next step for location-based mobile services? Why haven’t more local merchants capitalized on location-based marketing tools?
Interception seems like a better and larger market than location. Even I don’t care where I decided to stop and have a tea, so why should anyone else?
Foursquare has an inherent design flaw.
Unless I want to camp out and wait in hopes that a “friend” will join me—what’s the point? And, if I want company, why don’t I just arrange to meet someone in advance rather than trust the digital deities that out paths will cross?
Now, if I let an app know I was en route to “Coffee Shop A” and all the coffee shops between my current GPS coordinates and my stated destination had an opportunity to bid for my business in real time … well … that might start getting interesting.
As to the second question, the answer is twofold: first, most merchants are stuck in analog marketing techniques and second, most merchants don’t waste a lot of time and energy unless they—or their competitors—sense a payday.
Confronted with a plethora of digital options, many local merchants have chosen “None of the Above.” There are just too many options, with no one option providing a clear, proven path to increased sales and profits. Large chains have the ability to have employees who are dedicated to location-based marketing and social media.
Small merchants need to stay abreast of trends in digital marketing and should not be afraid to test the waters. What works well for one retailer might not for another. They should be setting goals and examining ROI. The best programs are those that easily reward good customers and help newcomers become regulars.
This is too much work for little reward. Consumers want more intuitive and compelling reasons to engage in this channel on a regular basis. Let’s let time take its toll on these social channels and see which ones rise to the top.
We may be going through a shift in loyalties among consumers and retailers alike. Four Square offered rewards for participation that were seemingly unmatched. There were ego lifting opportunities (the “mayor”) as well as pricing advantages. There may be less good stuff while the time commitment is still a requirement.
However, I think there is an additional wrinkle under the surface. And it has to do with privacy. How much of your life is Four Square demanding to know about? At one point participants were eager to share…but as the years have gone by there are examples of social media entities taking advantage (not in a good way) of their members.
The combination of time commitments, fewer rewards (perceived as well as actual), and loss of privacy with its onerous repercussions can all play a part on social media involvement overall. Location based marketing requires a fresh evaluation for both retailers and consumers.
The biggest problem is security. I do not want to advertise when my house is empty and how far I am away from it. With applications like “Yelp” companies can get the value of references as well as coupons without exposing their location. I see people on Facebook “check in” to places and all I can think is that guy’s 400 “friends” now know his house is empty for the night. Remember the days when burglars had to scan obituaries to know when a house would be empty? Now all they need is to be online.
I’m a big believer that these apps will not succeed because of this problem. Take it from a mom who won’t let their kids “check in” anywhere, unless they can let you build rewards without having to expose your location, it will not work for these companies.
For me, the challenge of Foursquare has been not enough people I know to connect with spread across far too large of a geography to make things interesting. It’s almost like some of the economics that hampered Second Life—in a world of unlimited space, what value does land have? And if you buy virtual land far away from the densely populated communities, what fun is it to put things on it that no one but you will see?
Same thing for Foursquare, at least for me. Maybe it works better in Manhattan or London, where when a friend checks in at a coffee shop I know, it also happens to be a couple blocks away. In Denver, when a friend checks in at a coffee shop, they could be 20-30 miles away. So while it’s a nice notification, it is ultimately not actionable. If there’s no action for me to take, there’s no value for me to use it.
Location based marketing is still evolving. Delivering the right offer to the right person at the right time is extremely attractive for both brands and consumers. That is the winning combination.
What you need to do to make location based marketing successful:
Location based marketing and card linked offers are only going to get better. My guess is the leader in this space hasn’t even launched yet.
I think a lot of local merchants aren’t thinking about what’s in it for them. Every time I check in and announce it to my Facebook and/or Twitter friends, my friends might think, hmmm, I’ve never been there, but if Lee goes there then maybe…Or wow Jason’s, I think I’ll go to my local Jason’s for lunch today. Lots of social possibilities that are all pluses and no costs yet.
As to the cost to the retailer, reward me every once in a while! I used to go the Cheeseburger in Paradise quite a bit and they would give free Frickles for every 3rd check in. Jason’s sends me a $5 off coupon ever so often for being a loyal customer. Do you think Ishare that information with my social world? You bet!
Let’s not drop Foursquare just yet. Let’s educate retailers.
Prioritizing your social media by relevance is somewhat crucial these days and has left Foursquare behind with many users, myself included. Added to this is my belief that Foursquare encounters a high level of competition at the local level with startups being touted within their respective communities. FrontFlip in Kansas City and LocalBlox in Seattle are just two that I have sampled and liked. I do hope Foursquare reinvents itself. I would certainly give it another try.
Wait, Foursquare still exists?!?
On a more serious note, the most important “location-based mobile service” is mobile search, and very few if any retailers and restaurants have mastered that yet.
Is this a question of a failure of location-based marketing or the early warnings of how gamification can fail?
Foursquare already knows that badges and check-ins are not the future. I saw Dennis Crowley, their CEO, speak at SXSW a couple weeks ago and he was quite open about how he no longer wants Foursquare to be the check-in, badge app. He is focused on providing relevant recommendations based on where you are and where your trusted friends have been. Foursquare is up to 30 million users globally who have checked in 3 billion times in locations across a 50 million POI database. No matter how you count it—that’s a lot.
For our world the opportunities for them include:
1 – How to make location-based marketing really work for CPG manufacturers. The challenge is CPG brands are not a physical location—that’s why you see the location owners themselves using the platform.
2 – Are there enterprise applications for their data? Not a focus today, but take a look at this video they posted on consumer traffic patterns in New York and Tokyo. Aside from being super cool, this data could tell you a lot about where people are going.
Dennis also benefits from being what I like to call a “Celeb-ra-preneur.” SXSW attendees were lining up just to get their picture taken with him. Now that’s disruption, baby!
The best example of a location based app that works is Open Table. It provides a useful service for consumers and has established a predictable income stream with restaurants by contracting for monthly maintenance fees and volume related fees based on the number of people who sit down to dine.
Granted Foursquare attempts to solve another problem (or create another opportunity) but Open Table demonstrates how a location based app can command a category and be meaningful for its users and merchants.
PS: I’m still looking at Foursquare, just waiting for those relevant offers to pop up.