Restaurants, retailers and other small businesses with storefronts are embracing location-based social networks – think Foursquare or Facebook Inc.’s Places – to woo customers and keep them coming back.
The services allow smartphone-toting customers to “check in” to a business or address, and then instantly share that information with friends or connections. Other fast-growing pioneers in the field include Brightkite Inc., Gowalla Inc. and online-review heavyweight Yelp Inc.
Marketing experts say the services offer inexpensive, easy and effective ways for a small business to get its name out and engage customers (see related article, “Getting Customers to ‘Check In’ With Foursquare”). Foursquare and Yelp currently offer the most developed tools for small companies that want to run promotions, though other services are developing similar ones.
If you want to try a location-based service, it’s easy to get started. First, find out whether your business is already listed in services popular in your area. If so, claim ownership and make sure the listed information is complete and correct. If not, add the listing yourself.
The next more time-intensive step is to prepare a plan for using the service—and remember to keep it fun. On social media, the hard sell can turn people off, while irreverent and playful approaches can be wildly successful. Consider how to reinforce your effort, such as with signs reminding customers to “check in,” plugs in newsletters, and posts to Facebook or Twitter.
Here are three best ways to use location-based services to boost your business.
1. Offer rewards to entice customers. Even if you do nothing, people may discover you through location-based services. But you can amplify the effect on Foursquare and Yelp by promising free or discounted products to people who visit. Take it a step further by offering a freebie to those who take another action besides checking in, such as buying a product or leaving a digital tip for other users.
Monique’s Chocolates LLC, of Palo Alto, Calif., has run a buy-one-get-one-free promotion for truffles on Foursquare for several months. About half of the 200 check-ins to the shop have redeemed a free sweet, compared to about five or 10 people who responded to the same offer publicized in two costly ads in the local paper, says owner Mark West. “Unlike my print ad experience, these people keep coming back,” he says. Sometimes, they don’t even ask for the truffle. “They just buy stuff.”
2. Dole out prizes to loyal patrons. Many bars and restaurants give their Foursquare “mayor,” the user who has visited most frequently during the last 60 days, a free drink or discount. Others spread the love more broadly, offering a gift to customers when they complete their fifth or tenth check-in. J&R Music and Computer World, a family owned electronics retailer in Manhattan, automatically enters everyone who checks in on Foursquare into a monthly sweepstakes for a $100 gift card.
These promotions are akin to traditional loyalty programs and tend to reward volume visitors, not necessarily big spenders. So choose your reward with care.
3. Host events to build buzz and long-term relationships. This summer, Longboards Ice Cream, which sells its cold stuff from two trucks and to several stores in Orange Country, Calif., partnered with the Orange Country Register to create a “trip” on Gowalla dubbed the “Tour of O.C.”
People who visit the tour’s 20 local venues by the end of October will be invited to a bash, where generous amounts of sponsored swag are to be given as prizes. The grand prize is a Costa Rican surf vacation.
A benefit of a buzz-worthy promotion is that it encourages plenty of check-ins, which effectively act as a seal of approval within groups of friends, says Dan Zarrella, social media scientist at marketing-software firm HubSpot Inc. Such recommendations provide “street cred” that is the single most powerful effect of location-based services, he says. “If a bunch of my friends, whose opinions I trust, recommend it, I’m much more likely to be interested in it.”
To turn awareness into longer-term relationships, include these new customers in your other marketing efforts, says Brent Leary, co-founder of CRM Essentials LLC, a consultancy focused on small and mid-size businesses. Invite them to sign up for your email newsletter or join your Facebook page. Find out who they are and what they’re interested in—and use that to design offers and events that might bring them back.