by Lou Dubois
The check-in giant recently relaunched their business page offerings, making it easier for local businesses, retail chains and individual brands to reap the benefits and retain customers.
Foursquare had 381,576,300 individual user check-ins, 6 million users and a 3400% growth in 2010 alone. So it's safe to say that location-based services are no longer a fad. Just a few weeks ago, Foursquare announced their "Foursquare for Business" page, which existing businesses utilizing the service may not see as terribly different. But for companies yet to involve themselves with the service, this re-launch makes it much easier to become a part of the trendy crowd.
"We're not changing what we do with this launch," says Tristan Walker, Foursquare's director of business development. "It was just a revamping of the site and helping to explain in a little better detail exactly what we offer to businesses."
So how does the new offering change what Foursquare can do for small businesses? In this guide, we'll explore specifically why retention is so important to business and what the new business page offers that makes it so unique for businesses.
How to Best Utilize the New Foursquare for Business: Small Business Potential
Among the new offerings included in the relaunch, though, in addition to local merchants and national retailers being able to "claim their venue" (which can be done quite simply), was the ability for brands and businesses to utilize the badges recognition system.
A pretty impressive group of companies have already signed on to the project, ranging from traditional retail locations to brands themselves. Included in that impressive list from a merchant perspective are Starbucks, Sports Authority, and the Museum of Modern Art; and for those not tied to a physical location there is Bravo TV, MTV (which was the top brand on Foursquare in 2010), Louis Vuitton, Red Bull and more.
But while all of that is great for large brands and national retail chains, the real potential for Foursquare remains with small businesses, and according to Walker, that remains the core of the businesses that are best utilizing the service. "For merchants, there are two things that really matter: acquisition and retention," he says. " And really I think the goal for us, and we've said this from the beginning, is to bring back the nostalgic, remember-your-name kind of loyalty that consumers still want. We want to redefine what loyalty means at a retailer, merchant, or even to a brand, because that makes a difference."
How to Best Utilize the New Foursquare for Business: New Customers Cost More Than Retaining Existing Ones
As long as businesses have been around, loyalty has been the key to keeping customers. If you're a coffee shop or bar and you remember you're a customer's favorite drink and name, they're much more likely to come back. And in the social space, many consumers view businesses in this regard: if you're not on social networks and social media like I am, perhaps I'm not your target consumer. As a business, this is an old adage: be everywhere your consumers are.
The best thing about Foursquare for Business is that it is a completely free service (other than a minimal investment in time). So in the past, the only loyalty methods may have been the owner remembering a customer name. No more. Claiming a location/venue is made considerably easier with this relaunch.
To create a badge, there is a nominal fee that Foursquare determines varies based on your business. According to a statement from the company, "the amount that we charge for branded badges varies by partner. Sometimes there is a monetary value attached to badges, and sometimes we exchange badges for promotion through various channels. We evaluate partnerships on a case-by-case basis and try to form agreements that are mutually beneficial."
But why does retaining a customer matter so much? Dependent upon which statistics you are viewing, it can cost anywhere between five and nine times as much to acquire a new customer as it does to retain an existing one. And as the Harvard Business Review states, 91% of small businesses do absolutely nothing to retain their existing clients (meaning only 9% understand this reality). Consider the following numbers:
• According to John Coe, author of, The Fundamentals of Business To Business Sales and Marketing, "68% of long-term customers stop buying because they just don't feel loved."
• The average American business loses 50% of its customer base every 5 years. – HBR
• An existing customer spends an average of 67% more than new customers. – HBR
If you take it a step further and consider that customer retention is influenced just as much by brand, product and service proposition, then customer experience is the primary factor in brand loyalty, acquisition and customer retention. All that being said, the average organizational expenditure still breaks down as follows (according to James Digby, marketing manager at TeleFaction):
• 55% is on new customer acquisition
• 33% is on brand awareness
• Only 12% is on customer retention
How to Best Utilize the New Foursquare for Business: What Does the New Foursquare For Business Do?
But what does all of this mean for small businesses? The new page offers up very simple and very visual step-by-step instructions for how merchants, venues and brands can use the Foursquare service to promote themselves, as opposed to the less user-friendly data they provided before. As Foursquare stated when the re-released the product, "It addresses some of businesses' biggest concerns like adding coupon codes for cashiers and shows what the unlock screen looks like so businesses can educate their employees."
Other than the ability for brands without physical locations to garner a presence on the new Foursquare, it also offers businesses a chance to toy around with their existing gaming and badge functions, which all goes back to that point of loyalty.
Furthermore, and specifically in terms of analytics, Foursquare will continue to offer very robust analytics for a great price (free): male to female ratio, who your regular customers are, when you get the most check-ins, how your customers checking in compares to the customers who are signed up for your loyalty program and more.
"At the end of the day, our goal is very simple," Walker says. "We want to redefine what loyalty means at a retailer or merchant. And we think that these changes make it considerably easier for businesses to do that."
The big looming question through all of this is the data beyond the original checkin. There are some aggregation services like the recently launched MomentFeed (still in beta), where businesses will be able to tell not just when the customer checks in to their establishment but where they were before, after and what their regular habits are through a simple dashboard. Foursquare is experimenting more in this space as well with their badge system, as their new gym badge will reveal the time of day you are working out (as Walker says, "if you workout in the morning you might get orange juice and oatmeal, or in the afternoon a Gatorade"). It takes the idea of the supermarket loyalty card that tracks when you visit and how much you spend and really takes it to the next level, which is where Foursquare and other location-based services are headed.
Article provided by Inc.com. © Inc.