Foursquare - Mixing Social Networks With Loyalty Programs

If you’re addicted to Foursquare, then you know the “special sauce” that makes this application a perfect synergy between social networking, gaming, and business. I’m a little late to the Foursquare game, having just really started getting into it this past month. The application (available on a host of smartphone platforms) does a terrific job mixing social networking with a real business model.

For those who don’t know, Foursquare is a mobile application that lets you track where you are and “check in” when you go somewhere. You can add a status and keep track of your friends À la Twitter. But, the application is also a game. You get points for participating in various activities, such as checking in at a location for the first time, traveling a certain distance between check-ins, or checking in often at the same location over time. The “mayor” of a location is the one with the most check-ins there. Additionally, you can earn “badges,” which reward combinations of behaviors. For instance, you get the “Bender” badge if you check in to bars four nights in a row. If you check in at three karaoke lounges, you get the “Don’t Stop Believin'” badge.

Loyalty Programs on Steroids

Several years ago, I wrote a series of columns on loyalty programs, starting with this one. In it, I discussed the difference between “continuous reinforcement,” “fixed/variable ratio,” and “fixed/variable interval” reward schedules. If you missed those columns, they are a seven-part series and cover each of these types of schedules in depth.

The exciting thing is that Foursquare enables all of these promotional ideas to exist within its framework. At least, it should be possible. I haven’t confirmed that it has the back-end support yet for all of the various reward types, but it clearly is supporting at least some of them.

Here are some examples of companies using different reward schedules to honor their loyal customers:

• Alamo Drafthouse (my favorite movie theater chain in Austin) gives you two free movie tickets if you are the “mayor” of that location.
• Atomic Wings (in NYC) gives you 15 percent off if you are the mayor.
• Ben & Jerry’s (in Detroit) gives you a free small cone for every fifth check-in. Mayors get 10 percent off.
• The Doubletree Hotel Crystal City (Virginia) gives 20 percent off an entrée to all who check in. Mayors get 20 percent off their total bill.
• Nightingale Theater (Tulsa) gives a free bag of popcorn and a beer on your fifth check-in.
• Xoom (NYC) gives you a free smoothie when you buy one and check in with a friend.
• The Wynn Hotel (Las Vegas) gives you a free glass of champagne when you check in at the Blush nightclub.
• The Lite Choice (NYC) offers free upgrades to a larger size cup or cone just by checking in.

The rewards above mainly fall into the “continuous reward” and “fixed interval” reward categories. I am eager to see if either Foursquare or independent sponsor companies begin to delve into “fixed/variable ratio” awards.

Here’s one example of a loyalty program on Foursquare.

If your company owns several independent brands, you could work with Foursquare to create a badge for consumers who patronize each of the brands. Similarly, you can create very cool cross-sell promotions to reward consumers who visit your location and also a partner company’s location. The possibilities are endless.

A Great Mashup

Is Foursquare a fun way to keep in touch with your friends, the new face of customer loyalty programs, or a novel way to compete with your friends? It is all of the above, and very exciting to consumers and businesses alike.

I am just thankful that a badge exists to reward my behavior of going to the gym over 10 times in a 30-day period (“Gym Rat”) and not one that rewards my behavior last weekend in Atlantic City (going to the buffet at the Borgata, the buffet at Harrah’s, and a McDonald’s).

Comments, thoughts? Leave them below.

Until next time…

Jack