Wednesday, August 25, 2010

Loyalty 2.0

Over the course of the last few months, my rants on the subject of social media have become something of a norm on the blog. Much of my enthusiasm is invoked by what I see as unlimited potential for brands to benefit from these emerging platforms. As an advertiser, I believe we have the most opportunity to reach consumers through location-based social networks (LBS) like Foursquare, Gowalla, and the newly released Facebook Places.

Initially, I wasn’t sure that platforms like 4sq would ever be utilized outside of metropolitan cities. As LBS have evolved, it has become evident that I was way off with my initial evaluation. I was looking at these applications as a consumer, when I should have been looking for the opportunities in location-based services as an advertiser.

Having joined 4sq early in its early stages, the infrastructure was not yet in place outside of cities like New York or San Francisco. Each of these LBS platforms are rendered useless unless they are adopted by the masses. The sub shop around the corner.. The bookstore a block over.. Until a user creates each of them as a venue in the LBS platform, we don’t have the ability to check-in there.

Initially it was just a game. A fun way to see where my friends were, and what bars/restaurants were “trending” with the most active users currently checked in. Then, in an instance, everything changed.

One day I was checking in to a burger joint when a notification in the platform jumped out at me, “Local Special Nearby” -My light bulb moment. Remember the days when you would need 9 whole punches on a frequent buyer card to receive your 10th sub free at your local sub shop? The ability to leverage location based social networks will take loyalty programs to new heights. If Facebook socialized the internet, Foursquare will socialize loyalty.

A few of the creative ways retailers have leveraged location-based social networks:

  • Miss Shirley's in Baltimore has seen a 427% increase in the number of check-in's at the restaurant since they have offered to let their Foursquare "mayor" jump to the head of the line.
  • A Princeton, New Jersey mall offers a free, close up parking spot to the Foursquare mayor:

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