Foursquare has done a good job of attracting the early adopters – hypersocial mobile data users. If you’re young, single and living in an urban area (or a college town), the value proposition is huge.
The next stage of adoption (and monetization) is likely to be a tougher hurdle. There are two obvious directions for Foursquare expansion: digital-savvy business users and shoppers.
While shoppers are the larger (and more attractive) demographic, let’s start with the digital-savvy business users. By this, I’m referring to those who are probably active on Twitter, but are beyond their bar-hopping days. These users (and I fall into this category), get the value of social media, yet struggle to find real value in Foursquare. I know that I use Foursquare much more heavily when I travel than when I am in the office. Check-ins at clients are typically not appropriate and a daily check-in at Starbucks and the office just isn’t that exciting.
The more attractive market is the local shopping market; I’m using shopping in the broad sense – in addition to goods, it could be food, drink and other services. This is also the place where Foursquare expects to generate its revenues – through promotional marketing offers. Yet, so far, the promotional offers have been somewhat lame.
Last week, when I was in London, it only took me about a half-dozen check-ins at the Starbucks on Old Broad to become Mayor, but that wouldn’t happen in New York or San Francisco. And what you often find is that the Mayor of a given Starbucks happens to be one of the baristas.
Checking in over and over in hopes that you, like Michael Wolf, may get $1 off on a frappucino, after dropping $200 just isn’t likely to get the mainstream user to adopt Foursquare.
Compare those offers to what you see on Groupon. The typical Groupon offer is 50% off or more. Recent deals I’ve received were for 67% off from Wine Insiders, 50% off skating at Chelsea Piers and 53% off at the NY Hall of Science. Those offers are why Groupon is experiencing huge growth. A chance to be the one person that day who qualifies for a buck off a frappucino just won’t motivate users.
Perhaps enabling rewards for multiple check-ins (e.g. everyone who checks in 5 times this week gets a half-priced coffee) would probably get many more people interested. There are complications, of course (you don’t have to actually buy anything or even step foot inside a Starbucks to check-in), but those are things that Foursquare and its marketing partners will have to figure out.
There are many potential innovative offers that can leverage location-based services. Content providers could provide access to premium content to users checking in at a conference; wine brands could offer special deals on wine pairings at a restaurant. I can think of dozens of compelling offers that would make users more likely to check-in.
I think it’s inevitable that checking-in with location-based services will become mainstream in a few years. But if Foursquare wants to be the leader in this space, it needs to provide greater value to mainstream users.
