Winter 2011
Your Customer is Here By Melissa Kellogg

Article Resources

Mehul Patel
Dominican Joe
Austin, TX
dominicanjoe.com

Cynthia Sutton-Stolle
Silver Barn
Columbus, TX
thesilverbarn.wordpress.com

Lynn Switanowski-Barrett
Creative Business Consulting Group
cbc-group.net

You must have heard of the key players by now—Foursquare, Gowalla and more. Find out how you can use location-based social networking to attract customers to your store.

Have you ever wished that you could instantly reach out to all those driving or walking by your store and effectively incentivize them to stop in? Or have you ever been to a restaurant or other establishment and wanted to instantly tell your friends about it knowing they would love it as much as you? If so, then you understand the power of location-based social networking—LBSN.

Cynthia Sutton-Stolle, owner of the Silver Barn in Columbus, Texas, says the store is in the “middle of nowhere”—which is why she has begun experimenting with location-based social networks like Foursquare, Facebook Places and Gowalla.

Why use LBSN?

Location-based social networking allows customers to “check in” to a location thereby announcing to their Facebook friends and Twitter followers where they are. “Checking in” enables the global positioning system (GPS) on a Smartphone to pinpoint a location. Location-based social networking allows shoppers to share the fact that they are in your store thus creating buzz using social media. It leads to friends influencing other like-minded friends to come in and see what all the fuss is about, says Lynn Switanowski founding partner of Creative Business Consulting based in Boston, MA. And because the buzz is from a trusted friend (as opposed to an ad from a company), it is likely to have a much more lasting and powerful impact.

LBSN also allows you to offer special promotions to those that “check-in” and reward your best customers. This in turn could fuel more frequent visits.

Using LBSN can also be a great way for you to reach out and attract new customers who are unfamiliar with your store, are in the local community, and searching for a shop like yours.

However, with all its potential, location-based online marketing is still in its infancy and has some hurdles to overcome. Foursquare only has three million users worldwide and Facebook Places launched in August 2010 is still in its infancy. Privacy concerns have been addressed by letting the user control who is able to view their location; but for many the concerns remain.

Nevertheless, location-based social networking may be a tool to consider when marketing your store. Retailers who start learning and experimenting with it now will be just that much more polished as the popularity of LBSN grows. It is not likely that Foursquare, Facebook Places or Gowalla will become the end all, be all of your store’s marketing strategies, but think of it as one tool in your marketing toolkit. Besides, once you claim your place, and set up some specials for those that check-in, the rest is up to your store’s visitors. They will be the ones posting that they checked in and providing comments and even photos.

Who are the main players in LBSN?

Foursquare

Foursquare currently has the greatest number of users. After a user signs up with Foursquare she can use her Smartphone to “check-in,” meaning allow the phone’s GPS to detect and post location to the user’s social networks such as Facebook and Twitter.

Once the visitor’s location is detected, Foursquare will list any friends and Foursquare user promotions at that location or nearby. It will also list any specials that the merchant may be offering to those that “check-in” at that location.

As a retailer, Foursquare allows you to reward different categories of shoppers differently. For example, the “mayor” can be offered more preferred promotions when he or she checks in at your store. The “mayor” is a shopper who has checked in most frequently in the last sixty days. Giving your mayor more rewards also creates competition among members to become the next mayor.

Foursquare keeps track of how many visits each individual has made to your store. This enables you to run promotions that relate to frequency like “get 20% off your entire purchase for every fifth check-in.” Also when a Foursquare user checks in at a location near yours they can also see an alert that your store is nearby and offers special deals to Foursquare users. This attracts new customers who may not have even intended to shop in your store.

With location-based marketing in its infancy, now may be a great time for you to begin experimenting with its capabilities as a new way to reach out to customers and market your store for little to no extra expense. Mehul Patel, owner of Dominican Joe Coffee Shop based in Austin, Texas says he is on Foursquare and started offering discounts a few months ago. “It seems the number of check-ins have gone up some. I think over time, as more and more people start using those types of services, it will be a bigger part of our marketing,” he says.

The analytics that you can easily retrieve from Foursquare can be a great help in planning future online and offline marketing efforts, says Switanowski. With Foursquare you can view statistics such as: most recent visitors, most frequent visitors, the time of day people check-in, total number of unique visitors, a histogram of check-ins per day, gender breakdown of customers, and the portion of Foursquare check-ins broadcast to Twitter and Facebook.

Facebook Places

Facebook also has a location-sharing feature called “Places.” Like Foursquare, Facebook Places allows users to check-in at their current location using a GPS-enabled Smartphone. When they check-in at your store, a post is created on their Facebook page, which appears on friends’ news feeds. The posts offer you added branding and provide you with invaluable word-of-mouth marketing.

Places is somewhat new to Facebook and only has a specific application developed for the iPhone marketplace (as of press time). However, users with mobile devices other than an iPhone that are equipped with a mobile web browser can visit the Places mobile website and check-in with their location.

Places does not yet have all the functionality for retailers that Foursquare has—like offering special promotions to those that check-in or creating different frequency designations like mayors. Despite its current lack of functionality, Facebook Places is likely to grow in popularity thanks to the already 500 million Facebook users. You can get started with Facebook Places, which is free to use, by claiming your store’s “place” on Facebook and merging it with your store’s “Like” page. Search “Facebook Places” in the Facebook search bar for step-by-step instructions.

Gowalla

Gowalla, also a location-based social network, allows users to check-in at their location. At each location where users check-in they get a “stamp,” modeled after a passport stamp that keeps track of their travels. Gowalla is unique in that it allows users to upload photos tied to their posted location and create recommended trips for friends to see and follow. Users can also comment on friends’ locations and follow trips recommended by other friends or businesses. The “Whole Foods Market 30th Birthday Celebration” trip in Austin, Texas, is a good example.

Businesses can “claim” their location at gowalla.com/business, which allows them to leverage customization options, including business verification, addition of location details and more.

Retailers can encourage customers to highlight their business: “Best Gifts in Town” or some such award. Businesses with the most highlights are featured on Gowalla City Pages.

How can you get started?

Sutton-Stolle has had success with social media by using Facebook, Twitter and blogging. She has just begun dabbling in LBSN and says she has already seen new customers find her and check-in. She offers a special prize for the mayor and discounts for all those that check-in.

Sutton-Stolle recommends that fellow retailers take the time to learn more, test what works for them and then focus on those specific tactics. For LBSN, she recommends, if you do nothing else, to at least set your store up on Foursquare and Facebook Places. “If it does not work for your store, you have not lost anything because they are all free to sign up for,” she says.

Switanowski recommends the following steps to get up and running with LBSN.

Claim your territory
Start out by claiming your badge on Foursquare, which is free, says Switanowski,. Even if you are not ready to start offering special promotions or doing anything else, she says, claim your badge. On Facebook, claim your Place by following the steps listed on the facebook.com/places website. For Gowalla you have to fill out an online form and wait to be contacted.

Promote your presence
Let your customers know about your presence on Foursquare, Facebook Places, and Gowalla as well as on other social networks you use such as Twitter and Facebook. Promote this presence in your store with signage. Encourage customers to ask you about how to get special deals simply by checking in.

Create exciting promotions
Instead of merely announcing that you are using LBSN, show customers how their participation will be worth their time. Customers are most attracted to deals so promote exciting offers in exchange for their participation in your LBSN outlets.

Switanowski says effective promotions could include:

  • Exclusive specials for mayors or the most frequent shoppers
  • Specials for frequent visitors
  • Specials for all LBSN users that check-in
  • Exclusive parties just for LBSN users

For example, says Switanowski, women’s clothing retailer Ann Taylor offered 25 percent off to mayors and a 15 percent discount for all customers with each fifth check-in. McDonald’s ran a one-day promotion giving away $5 and $10 gift cards to everyone who checked in. Music and DVD retailer, f.y.e., offered a 10 percent discount for an entire month to any customer that checked in and mayors could earn a discount of up to 25 percent.

Although location-based social networks are yet to fully bloom, they will likely eventually be an important part of your marketing mix. As the next generation that has grown up with social networking becomes store owners and more affluent shoppers they will force social networking to become common use for businesses, says Sutton-Stolle. Her daughter, now a retail store owner, uses social networking as easily and regularly as older generations use the phone. “Even if you believe you do not have the time, just learn about it, try it and see what works for your store,” says Sutton-Stolle, “you might be pleasantly surprised.”

Melissa Kellogg

Kellogg is a freelance writer specializing in mountain home and living trends, marketing, real estate and business. She is based in Edwards, CO, and is a regular contributor to Mountain House & Home magazine. Her work has also been published in various newspapers and magazines, such as Beaver Creek Magazine and the Vail Daily.




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