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Loyal Customers are Checking-in Foursquare

The potential of location-based mobile applications has been enticing marketers for a couple of years now, but it seems that Foursquare may be turning this potential into a powerful reality for some.

Anyone can download Foursquare on their iPhone, Blackberry, Andriod, Palm or other mobile device to “check-in” and let friends – and marketers – know where they are. By combining GPS location information, contact data from the user’s address book or Facebook account, and fun points-based rewards for customers, loyalty marketers now have incredible relationship-building tools.

From restaurants and retail stores to salons and gyms, companies have quickly realized that a customer’s phone may be a powerful and data-rich replacement for a wallet full of loyalty cards. In March, Foursquare introduced a tool that offers businesses data about who is checking-in, the total number of check-ins, customer demographics, and the top days and times that customers are visiting. Larger, forward-thinking brands have already begun to join the location fun and games.

Starbucks currently offers a “Barista” Foursquare badge for customers who have checked-in to five different Starbucks locations. The company is planning on testing various reward strategies over the next several months, such as invitations to events, photo-sharing, and online reputation scores.

Frozen dessert franchiser Tasti D-Lite has gone even further with their Foursquare strategy by incorporating the social network into its new loyalty program. In January, the company started replacing its in store punch cards with a chain-wide loyalty program called TastiRewards. D-Lite knew their customers were already checking-in on Foursquare, and wanted to know what sort of mechanism they could put in place to facilitate the existing behaviors. By registering their rewards card online with Facebook, Twitter and Foursquare, customers are rewarded for each social network connection along with their in-store purchases. With this social network integration, Tasti D-Lite customers are automatically checked-in on Foursquare and can update their location statuses with friends on Facebook and Twitter.

Pepsi has also weaved its loyalty program into the location-based technologies. Companies are learning that the tools are especially powerful for consumer packaged goods brands who market their products heavily, but rely on drugstores, retailers, and restaurants to actually get customers to the points of sale. By using location-based data to know when customers are near a location that sells Pepsi products, the company drive them in-store by delivering specific offers right to their mobile phones.

While location based loyalty is an exciting new frontier for loyalty marketers, Foursquare remains in an experimentation phase with just around one million users. Some present issues with the technology that must be addressed are the accuracy of GPS, the value of the customer data, how it relates to customer loyalty over time, and of course the privacy concerns that inherently exist with any social network.

In the meantime, I am going to visit the iTunes App Store on my phone to see what this is all about.