This blog post is part of the HBR Online Forum The Future of Retail.
There are troubling signs for the country’s retailers as Americans continue to slow down their spending and hunt for deep discounts. No one expects a blockbuster holiday season. Most retailers are just hoping to eek out a slight increase over the year before. Some retailers, however, are leveraging location-based mobile tools like Foursquare to outsmart the competition.
Foursquare recently passed one billion check-ins. For businesses of any type — but especially for retailers — Foursquare allows brands to attract, reward, and engage customers in ways that were never possible before. Innovative retailers are leveraging the growing popularity of check-ins to create fun, meaningful, interactions that encourage long-term loyalty. Here are five ways to use Foursquare to build loyalty this holiday season and beyond:
1. Offer creative, compelling specials. Offering a customer $1 off a pizza isn’t going to inspire anyone. That’s just an example of pushing a tired, traditional newspaper coupon to people on their mobile devices. Walgreens could offer a discount on shampoo or any of the other products it offers, but the pharmacy decided to do something innovative. Walk into any Walgreens during the flu season of 2011/2012, check-in on Foursquare, and Walgreens will donate a voucher for a free flu shot to someone in need. Walgreens expects to contribute $6 million worth of flu shots during the campaign. Walgreens is thinking creatively, connecting its Foursquare special with the brand’s unique voice.
2. Recognize the “mayor.” Foursquare has exploded in popularity partly because it adds a gaming layer to the location-based service. The person who checks-in the most is designated the “mayor.” Many brands are rewarding their most loyal customer with extra special discounts or creative promotions. The restaurant Miss Shirley’s in downtown Baltimore is known for its one-hour waits for weekend brunch. The mayor of Miss Shirley’s gets to cut to the front of the line and take three friends along. Simon Malls offers its mayors reserved, prime-location parking spots, and the ice cream chain Tasti D-Lite posts photographs of each location’s mayor on an in-store digital display. Tasti D-Lite has found that nearly 20 percent of its customers check-in on Foursquare and a large percentage of those users share their check-ins with friends on Twitter and Facebook. Showing the mayor some love provides benefits that extend to the mayor and his or her social networks.
3. Encourage a flash mob. Foursquare offers up to seven different types of merchant specials. Most merchants stick with the simplest–check-in and get something in return. Branch out. Offer a “flash” special from time to time. This is the equivalent of a Black Friday discount on any day of the week. A merchant might offer the following Foursquare special for an especially slow period: The first ten people who check-in after the doors open at 8:00 a.m. will receive an additional 20 percent off their purchase.
4. Incentivize people to do good. Retailers recognize that giving people a large discount might attract a crowd, but encouraging long-term loyalty means that customers must feel good about doing business with your brand. On Black Friday, JCPenney is putting Foursquare to good use, literally. Every check-in on that day will trigger a $25 donation to the Salvation Army.
5. Have fun. Foursquare is, by definition, playful. Don’t take your campaign too seriously. The Bryant Park Grill in New York City is built within an aviary. That means there are birds everywhere, an unusual sight in NYC. The Foursquare special: take a photo of a bird on your phone, show it to the bar tender, and get a free drink or signature dessert. Remember, smartphones are tools for engagement. People have fun with their phones. Play along with them.
When the Chairman of American Express, Edward Gilligan, announced a Foursquare partnership, he said, “We go to where our customers are and they are on places like Foursquare.” Your customers are increasingly living their lives on their smartphones but, despite growing by more than 30,000 users per day, Foursquare is still in its infancy and there is much to learn. How are you using Foursquare creatively to attract, reward, and engage your customers?