Location-Based Marketing – Foursquare Analysis

copyrights:Aleksander Buczkowski 2011-2012

Foursquare is the biggest and fastest growing Location-Based Social Network and its marketing value has been already acclaimed. Its characteristics represent in the most comprehensive way general attributes of LBSN.

Foursquare was launched in March 2009. On the company’s website one can read that it is a “mobile application that makes cities easier to use and more interesting to explore. It is a friend-finder, a social city guide and a game that challenges users to experience new things, and reward them for doing so. Foursquare lets users ’check in’ to a place when they’re there, tell friends where they are and track the history of where they’ve been and who they’ve been there with”.

Main features

Foursquare is a social network so it allows connecting with friends and keeping track of where they are and what are they doing. To engage more friends or/and followers from other social networks user can connect Foursquare account with his/her Facebook and Twitter profiles and broadcast the venue that he/she checked-in via those services. The other major functionality is link with place discovery. Based on positioning system user can browse through venues that are physically around him. Users can as well add a new place that was not present in the service. What seems to be one of the most important aspects from user perspective is that Foursquare employs elements of gamification – particular features used traditionally is games in order “to improve user experience and user engagement in non-game services and applications”. Foursquare uses elements including collecting points, badges and mayorships to motivate people to engage more with the service and while the service is not a game as such, it arguably features pervasive game elements using real places. The game aspect of Foursquare offers virtual and tangible re-wards for check-ins. Virtual rewards come in the forms of points, badges, and mayorships visible in one’s public pro-file. Badges are awarded for a variety of reasons, e.g. for starting to use the service, checking-in on a boat, checking-in with 50 people at the same time, or checking-in at a special event. Mayorships are awarded to a single individual for having the most check-ins in a given place in the past 60 days, where only one check-in per day is counted.

Foursquare is giving business several opportunities to utilized it’s functionality. From the marketing point of view presence in a major social network is additional communication channel. If it fits into marketing strategy and budget than it should be utilized. When a customer checks-in to a particular venue he is a potential client, who shared his visit with a social networks. The first reward for customer is that he is getting points, that might lead to gaining new budget of a mayorship. However from the marketing perspective a customer likes to be rewarded in a tangible way. Foursquare gives business as well possibility to reward customers in a tangible way with a free of charge tool  – Foursquare Specials.

Foursquare Specials are rewarding customers with a tangible reward depending on a goal of promotion:

  • Newbie Special – unlocks on a user’s first time visiting your venue. This is the most direct way to drive new traffic to your venue.
  • Friends Special – a number of foursquare friends need to check-in with to unlock a special.
  • Flash Special – limited daily quantity of goods sold with a special offer.
  • Swarm Special – a number of foursquare users need to check-in within a 3-hour window in order to unlock a special.
  • Check-in Special – every check-in gives predefined reward
  • Loyalty Special – rewards for retaining customers
  • Mayor Special – reward for a mayor – the most frequent visitor over the last 60 days.

User see on the mobile device which venue offers a Special. Venues can also order a customized badge for its customers from Foursquare. This tool requires however some financial investments.

Foursquare has currently clients for the following mobile operating systems: iOS, Android OS, Windows Mobile OS, BlackBerry OS, Palm OS, and the Android platform.

Foursquare privacy policy from marketing perspective

Foursquare is very strict about the privacy matters and it does not allow venue managers to overuse any personal data for business purposes. On the company’s website one can read the follow privacy policy concerning data sharing with venue owners. Additionally user can opt-out from every information sharing settings.

“Check-ins:

  • Verified venue owners can see the users who have checked into their venue within the last 3 hours
  • Verified venue owners can see the time you checked into their venue and the total number of your check-ins at that venue if you are one of the 10 most recent check-ins
  • Verified venue owners can see the number of your check-ins at their venue if you’re one of the top 10 most frequent visitors

Contact Information:

If user has checked into a venue within the last 3 hours, are is one of the 10 most recent visitors or one of the top 10 most frequent visitors, verified venue owners can see:

  • Name: Just first name, last name initial
  • Email and phone: No
  • Photo, with link to your Profile: Yes

Mayorship and Badges:

  • Verified venue owners can see who is the Mayor of that venue

Linked Account:

If user has checked into a venue within the last 3 hours, is one of the 10 most recent visitors or one of the top 10 most frequent visitors and user has linked his Twitter account to foursquare account, verified venue owners can see user’s Twitter ID.”

This policy is significantly limiting possibilities how marketers and/or venue managers can use Foursquare data. It however gives however the important signal for users that their privacy is one of a major priorities for the service.

Foursquare users motivations and behavioral patterns
Why people broadcast their location?
Foursquare and other Location Sharing Services (or Location Based Social Networks) have been used for marketing purposes from the begging of their existence. In order to investigate what value does those networks bring to marketers we need to understand what is the user’s motivation for location sharing. Well of course each of us knows why we broadcast our location to friends, but until its proved by science these are only personal impressions.
In the paper published in 2011 “I’m the mayor of my house: examining why people use Foursquare” Janne Lindqvist have investigated the topic. The quantitative survey with 219 participants revealed several motivators for participants that can have some relevance for marketers:
  • Gaming, fun, badges – the most perceived value seems to be linked with the element of gaming, collecting points and badges contributes to the perceived fun of Foursquare.
  • Social connection – interacting with friends seems to have a big value for users. The most important aspects are: knowing where the friends are and keeping in touch with them and checking-in to the same places and the same time. The social aspect of Foursquare is very important here, majority of participants claim that Foursquare is fun because their friends are using it.
  • Place discovery – majority of users have discovered a new places or where motivated to go to new places because of Foursquare. Most participants where pleased with tips about venues that they have seen on the service. The discounts offered by venues were not that important for users – less than half of them addressed it as a motivation.

Where? When? How often?

The other significant issue is linked with the question: where when and how often do people check-in? The same research displays on a figure 23 frequency of check-ins for various places.

From the bar charts one can observe that restaurants and bars are the most popular places to check-in at even several times a week, which seems to prove the social and place discovery usage model of Foursquare. From the other hand participants hardly ever check-in at schools and homes, which might be caused by privacy concerns. There is a small group of users that are willing to share their home location and a bigger one that share work location even more than once a day. The survey showed that there are people who are interested in gaining as many points, badges, and mayorships as possible, and check-in everywhere.

The other research  by Cheng et al. 2011 investigated patterns from more than 22 million check-ins globally. Generated from the data tag cloud of the most popular venues that users check-in shows that the most popular places are restaurants, coffee shops, stores, airports, and other venues reflecting daily activity (e.g. fitness, pubs, church). The result seems to prove several points from the previous paper presented. Cheng researched as well the temporal distribution of check-ins in the World:

This pattern provides a glimpse into the global daily activity intensity. One can observe there three major peaks: one around 9am, one around 12pm, and one around 6pm.
Conclusions

The end purpose of social media is not to simply push out a message through yet another channel, but to deliver a message in a way that is both compelling and sharable, and that the recipients will want to share with their network. Marketers using Location Sharing Services must look at ways in which they can provide an interactive experience in-store that leverage the technology in the pocket of their visitors—an experience that will convert them from browsers to buyers and from one-time customers to loyal fans who act as advocates in both the real and virtual worlds. You will not do it with a simple discounts, the study proved the gaming and social aspect is more important. Discounts – yes, but make them more valuable and let customers be more engaged to get them. They will come back for more. Social-gamification – this seems to be the key to success.