Check In Before Users Check Out

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The growth and integration of location-based apps into customer loyalty and marketing efforts is hard to ignore. Witness the growth of companies like Foursquare, Gowalla, ShopKick, and Loopt and the growing number of consumers and venues participating.

Take the poster child for location-based apps, Foursquare, which celebrates its second anniversary this month (March 2011). One only needs to look at the growth and activity on Foursquare to validate location-based apps' justified place in the marketing mix as a valid and important platform for brands to build a community. In just two years, Foursquare has surpassed more than 7.5 million users, and although it doesn't disclose the number of venues it has indexed, sources estimate that number has surpassed 10 million bars, restaurants, parks, stores, and other places. If estimates are correct, there are on average about 50 check-ins per venue. For big brands actively embracing this channel, that means opportunity.

However, like all new mediums, location-based services and the brands embracing them aren't immune to experiencing growing pains. Yes, there are the typical growing pains of scaling to meet demand, but the one (and perhaps most important) for brands interested in embracing this opportunity is customer experience. I'm an avid user of Foursquare and have been for some time. In fact, my Foursquare infograph describes me as an early adopter - #869,474 to be exact. I'm proud of my 275 check-ins and 15 badges and, given my travel, I'm not surprised that most of my check-ins are comprised of travel, food, and bars…that explains the extra 10 pounds. Across those 275 check-ins, I can count on one hand how many times I was served a special offer - even more surprising given my "Mayor" status at several venues. To check out your profile, visit http://www.fourgraph.me.

More enlightening was the experience I had when taking advantage of a special offer recently. It was my visit last month at Knuckles at the Hyatt Regency San Francisco Airport. Upon arrival I decided to check in to review the tips from the community and grab a quick bite to eat after my long flight from New York. Upon check-in, I was served up an offer that included a free pint of beer with the purchase of an entrée – score! Given this was one of the few times I was served an offer, I was reminded of the enormous potential location-based services have. I showed the offer on my Android to the bartender who asked "what is this?" I explained, and what erupted could only be described as a circus. I ordered my Fat Tire and endured the bartender repeatedly returning to me with questions about the offer for nearly 30 minutes. He asked me how I got the offer and if it was "real." He borrowed my Android to show others and ultimately explained that no one told them about the promotion. After 45 minutes, about 10 people, including other bartenders and what looked like the manager, were huddled in deep discussion. By now with all the ruckus, the other diners were approaching me to inquire what was going on. I explained and within minutes everyone with a smartphone around the bar was downloading Foursquare and checking in. Good news for Foursquare. I ordered another Fat Tire - this was getting good - and like any great comedian who borrows from real-world experience and observations, knew it would form the basis of my next ClickZ column. So what are the lessons for marketers? Many:

• It's about the experience: Great brands are built on great experiences. Food, product knowledge, and customer service matter. Technology and social media serve to amplify these experiences, so fix what's broken and fix it fast.
• Communications: When we innovate and embrace new mediums, we often don't, and sometimes can't, anticipate everything. The example presented is not meant to beat up Hyatt or the Knuckles staff, but to serve as a reminder of the importance of communication for both big and small organizations alike - particularly as it relates to frontline employees and key customer touchpoints including store personnel and your bartender and servers.
• Training: The commotion that ensued at Knuckles could have been avoided if the discussion happened in the kitchen and happened quietly. One free beer turned into 10 with those who already ordered because it was handled incorrectly. Include training for handling customer inquiries related to location-based offers and provide frontline associates with the appropriate escalation process.
• Tracking: What's the process? Like any good marketer, we want to know the effectiveness of these offers. What's the process for crediting and tracking these offers in your POS system? At Knuckles, it looked like there was none and for those interested in looking at redemption rates and conversion, you should think it through - is it a special redemption code in the system tied to Foursquare? This is definitely good food for thought.
• Test: Become the customer and recreate the process. By creating different scenarios and recreating the customer experience, you can anticipate and proactively address potential issues before they happen. Imagine if that was done prior to my check-in - a great reminder to us all.

I'm a big fan of location-based services and the community that has embraced this platform has provided invaluable tips on numerous occasions. I have no doubt that location-based services will continue to grow as consumers and marketers actively embrace this channel. But to be successful marketers, you need to be mindful of the customer experience before a customer check-in - otherwise you and the brand you represent will find those experiences will generate precisely the opposite intention - masses checking out.

Until next time,

Michael