People Check In; Businesses Cash In

Building customer loyalty with location-based services.

Last fall, The Music Hall and Portsmouth Brewery, both in Portsmouth, held separate charity events where donations were made for every attendee who checked in via foursquare. Donations through check-ins at both events totaled more than $1,800. It's just one way businesses are tapping into the power of location-based services (LBS).

Foursquare is one of a number of location-based services that help people discover and recommend places and businesses to others. So how can you leverage these services for your business?

Here I am

With GPS-enabled smartphones now ubiquitous, a bevy of applications have cropped up to provide services to smartphone users based on their location. That's exactly what a LBS is. These services make life easier by automatically telling you things like the weather, traffic, where to find the closest ATM, what movies are playing nearby and so on.

Most of those services are built into today's modern smartphones out of the box. As these services evolved over the years, a special type of LBS has emerged: the social check-in app. Social check-in apps enable people to electronically check-in to a specific business or location and let their friends know they are there. Instead of being built in, people can download an app or use the service via mobile Web or text messaging.

Location-based services that provide social check-ins include Google Latitude, Gowalla and SCVNGR. Two of the most popular are foursquare (foursquare.com) and Facebook Places (facebook.com/places). According to Forrester Research, users tend to be young adult males with college degrees who, notably, are 38 percent more likely to say that friends and family ask their opinions before buying things. Many people use them because businesses offer discounts for doing so, to coordinate their locations with friends or just for fun.

Benefits to Business

Ask any business owner how they grew their business, and word-of-mouth tops the list. Check-in technology is high tech word  of mouth. If someone liking your business' page on Facebook is gold then someone checking in at your business is platinum.

Here's why: When people check in using a LBS, they broadcast their whereabouts to their friends on the service and on Facebook and Twitter. A check-in is not just saying you like a business, but that you also patronize it and want your friends to know about it. Further, some location-based services, such as foursquare, offer access to free analytics that enable businesses to perform a sort of instant foot traffic survey. The data foursquare provides businesses include gender breakdown, check-in times and most frequent visitors.

People checking in using foursquare can earn badges-or bragging rights among their friends-for various feats, including being part of a swarm (more than 50 people check-in at one place together). People with the most check ins at one location are crowned foursquare mayors of that location.

Cashing In on Check-Ins

There are two main things businesses can do to harness the power of LBS for marketing and making money. First, register your business with popular location-based services for free. This lets you to access your businesses' analytics data and gain the ability to post specials or discounts that people can earn for checking in at your business.

The registration process varies depending on the service. With foursquare you simply search for and then select your business on foursquare.com, then click the Do you manage this venue? Claim here link and follow the instructions. As a bonus, foursquare will send you a window cling you can put up to encourage check-ins. With Facebook Places search for your business on Facebook.com, select it and then click the Is this your business? link and follow the instructions. Facebook doesn't send out window clings, yet.

Now that you've registered your business, you'll have the ability to post special offers and discounts. Posting a special earns businesses extra visibility. For example, when you post a special on foursquare, people who check in near your business will see a special nearby notification advertising your business.

The Granite State Checks In

New Hampshire may be a small state, but we think big when it comes to social media. At the first ever Foursquare Day on April 16, 2010, Portsmouth was ranked first worldwide out of more than 200 cities, with more than 30 businesses participating. Manchester had strong participation as well, with the mayor proclaiming 4/16 as Foursquare Day.

Businesses can start by choosing a LBS service and encourage check-ins with a special that's not only a real reward for your LBS customers, but is also good enough to draw in those who see your special advertised when they check in nearby. For example, Port City Coffee Roasters offered a 20-ounce coffee for $1 on Portsmouth Foursquare Day and Papa Wheelie's Bike Shop offered $20 off any purchase of $40 or more.

Experiment by rewarding customers for each check-in as well as giving rewards for loyalty (some services let you provide special rewards if LBS users check in more than once or if they check in the most among all people in a certain time period). Some businesses give mayors special incentives, like a reserved parking space.

You can also gain new check-ins by displaying signs encouraging customers to check in. After all, foursquare doesn't send window clings because they look cool. During Foursquare Day in Manchester, Republic Caf in Manchester offered a free coffee or espresso to anyone who checked in. People who got that free coffee might get something else and comment on it when they check in. Foursquare users can leave tips about businesses that are sent to friends checking in nearby, leading to more free advertising.

While location-based services aren't a panacea, they do offer new avenues to strengthen your overall marketing mix-and as an added bonus, they are free.

Walter Elly co-founded Portsmouth Foursquare and is part of the International Foursquare Day team. He checks in at MicroArts in Greenland. as their emerging technology director and can be reached at walterelly.com.