I must admit, at first I thought Foursquare was cutesy, if not a little silly, with the badges and Mayors and such. For those of you not familiar with Foursquare, it is a location-sensitive web service that allows its users to connect with friends nearby and update their location. Moreover, there’s a game component in that “points” are awarded for “checking in” at various venues, users earn badges, and the person who checks in the most often at a particular location is over a 60 day period is crowned the “Mayor” of that venue.
Big deal… or is it? This is much more than a mobile game that tells a user if their friends are in the vicinity or makes that user feel important by deeming them the Mayor of their local gas station. When a user “checks in” to a venue, the venue has a golden opportunity to offer a time sensitive, customized, and/or personalized special offer. Indeed, this is exactly how Foursquare is building its business model. It is appealing to businesses with services like (taken from http://foursquare.com/businesses/):
- Mayor Specials: unlocked only by the Mayor of your venue. Who’s the Mayor? It’s your single most loyal customer! (the user who has checked in the most in the last 60 days) (“Foursquare has deemed you the Mayor? Enjoy a free order of french fries!”)
- Check-in Specials: unlocked when a user checks in to your venue a certain number of times. (“Foursquare says you’ve been here 10 times? That’s a free drink for you!”)
- Frequency-based Specials: are unlocked every X check-ins. (“Foursquare users get 20% off any entree every 5th check-in!”)
- Wildcard Specials: always unlocked, but your staff has to verify some extra conditions before awarding the Special. (“Show us your foursquare Swarm badge and get a free drink!”)
Should Hosters care? I believe so, because your customers – Small Businesses – will care. This will likely be a (Cloud) service that Small Businesses will look to leverage to build loyalty programs and improve yield with upsell and cross-sell promotions. At present, Foursquare does not appear to have a formal channel program but it does have an open API and any Hoster that can bundle this service into their offering will have a differentiated and strategic advantage.
However, this will only be the case if Foursquare hits critical mass, and it appears to be doing just that. In March, public sources cite the total user base at around 500,000. By late April, it was over 1 million and growing. Additionally, Starbucks is a believer, offering $1-off coupons to Mayors of its stores and surely more promotions are in the works. It’s strange, for over a decade we have all been hearing about how Starbucks will send your phone a special offer coupon as you walk past it.
It hasn’t happened with WiFi or Bluetooth technologies, but it appears that this location-aware techno-utopia is coming to pass with Foursquare. What do you think? Is there an opportunity for Hosters to bundle Foursquare or other location-sensitive Cloud services into their offerings?
About Joshua Beil
Joshua Beil (@joshbeil) is the Director of Market Strategy and Research for Parallels, the leading provider of automation and virtualization software to the web hosting community. Previously, Josh was the Director of Social Media & Technology at a Level 3 Communications [Nasdaq: LVLT] where he provided strategic and tactical sales support. Before that, Josh was CEO and cofounder of Skywave Broadband, Inc, the largest commercial WiFi service provider in Hawaii. He was named one of Pacific Business News' Forty Under 40 for 2006, and in 2005, he was named a High Tech Leader by the Pacific Technology Foundation. Before co-founding Skywave, Mr. Beil was VP of Research and Development for the market research boutique, Tier 1 Research, where he covered the Internet infrastructure sector as an analyst, and negotiated and sold subscriptions to Tier 1's research services. Josh has also previously served as the Senior Analyst for Exodus Communications as well as the internationally known market research firm, IDC. He holds a Certificate in E-Business from UCSC Extension, and he graduated with honors from the University of California at Santa Cruz with a major in Psychology.
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