I‘ve been checking in on FourSquare now for nearly six months. When I first heard about it, I was interested to see if it could start to be used as the core for retail loyalty programmes. The potential for a mobile application to replace some of my vast collection of loyalty cards was huge.
For the few that don’t know, FourSquare is a mobile application that allows the user to ‘check in’ with retail outlets, businesses, tourist attractions and so on.
Users are rewarded for checking in with:
– a series of badges, which are unlocked to boast online credibility, such as the Barista badge for checking in at 5 different Starbucks outlets
– tips from other users for recommended eats, drinks and other experiences
– the opportunity to link up with friends nearby who you would, without FourSquare, probably miss.
The most frequent visitor is rewarded with ‘Mayor’ status, which sometimes comes with other benefits such as a free pizza from Dominos every Wednesday.
Replacing EPOS technology?
I’ve often thought the best way to help retailers understand how loyalty will impact their in-store technology is to simply think of it as a unique customer identifier. This unique code traces an individual transaction (and importantly, the data on the ‘basket’ back to the customer). Once a retailer understands who is buying their products, they have the power to develop their product base further and also influence customer behaviour. Loyalty therefore provides marketers with a core toolkit of data to work with, persuading customers to visit more often and spend more when they do.
Now FourSquare can provide retailers with a customer’s visit frequency, and also the pattern of stores visited, but is unable to provide any data on the basket of goods purchased. This missing link means it is very difficult to segment the customers according to their purchasing history, so future communication from the retailer won’t be targeted and is unlikely to be relevant.
Verdict: Not there yet.
Based on honesty
The system of checking in is based, entirely, on customer honesty. It is easy to cheat the system – (try checking in for lunch at the Fat Duck, even though they are fully booked) and for that reason, most retailers would be unlikely to provide any meaningful rewards in return. I can’t imagine hoteliers giving free reward nights to guests who have been checking in on Foursquare only. They would need to verify the stay against actual bookings, which isn’t easy to automate. I haven’t seen any rewards on Foursquare to compete with a more traditional loyalty programme.
Verdict: Not there yet.
There are natural privacy issues behind revealing your location online to the outside world. Burglars in the USA are reported to be scanning social networking sites to understand when homeowners are likely to be away (story here) However, FourSquare provides options to earn rewards but conceal your location where it might put your possessions at risk.
Verdict: Keeping on top.
A met with a major retailer recently who was interested in providing a series of offers and rewards for their customers who sign in with FourSquare. The Marketing Director tried to get in touch with FourSquare but hasn’t heard back from them. I wonder whether a few standard packages, available online for retail’s early adopters might enable to Foursquare to quickly build relationships with more retailers. For now, perhaps they are underresourced to deal with demand?
Verdict: Not there yet, but watch this space.
Low take up
I’m now Mayor of several different locations. For some of them, I achieved Mayor status on my second visit. I spoke to the Marketing Manager of a popular London bar. He checked in twice as an experiment and earned Mayor status. Given that he has hundreds of customers every day who might have checked in- he’s decided to park any ideas about Four Square promotions for a further six months.
Verdict: Not there yet, but watch this space
I really like FourSquare. It’s fun to use, doesn’t take itself too seriously, and is filling a niche that nobody knew existed. However, I don’t yet see it as a viable alternative to a card-based loyalty programme. Three million worldwide users, whilst impressive, just isn’t enough for retailers to consider it a major element of their marketing strategy.
However, it must be a pointer of things to come. Facebook’s Places application is now active in the UK. Perhaps with their 23 million active UK users, there is a chance that this will soon take off and become an essential ingredient in any loyalty strategy? LinkedIn and Twitter could also consider extending their service to introduce location-based rewards too.
I asked Jeremy Davis from Chameleon Net (the web solution developers) whether he sees FourSquare as the loyalty component in future e-commerce solutions. He said.. “I think of FourSquare as a channel. The people who use it have a profile and they will be of interest to some brands. Those brands have the opportunity to engage with those people, and position themselves as innovative and forward thinking at the same time. Like any digital channel (or non-digital?), the name of the game is engagement – the closer you can move your customers towards you, the more effective you’ll be.”
“Best uses of FourSquare to date I think are brands like coffee shops, where FS can enable and empower their loyalty programmes – every 10th visit you can claim your free drink, “Come here 3 times a week? – have a coffee on us!” Bring a friend any day this week and the Croissants are on us”, etc. FourSquare offers the ability to set challenges to your customers, give out rewards, etc. And of course, if you don’t do it then someone else will and the loyalty-o-meter will swing away from you.”