Foursquare: Democratizing the Loyalty Program
Reading Pete Cashmore's prediction on the imminent rise of FourSquare got me thinking about one of the key principles surrounding FourSquare's attraction: status. Just like airline medallion programs, Slashdot's karma system, Facebook's fans, Twitter's followers, status is a key component of social capital. Everybody wants to be somebody and achieving status through any of these vehicles is a visible way to demonstrate and wield social capital.
So on its surface, Foursquare is sort of unremarkable in the social capital space because it's not very different from any of these other status-based programs, which attempt to engage their best customers. In the world of finance, some banking and investment options are only available to high-net worth clients while cards like Visa Black are only accessible to the elite few who meet certain rigorous criteria. While it feels brutally oligarchical and elitist, this approach does makes sense for these companies. Wealthy customers and clients are important for banks because these customers are more likely to have large deposit balances, investments and loans. Providing them services that reward them for keeping their business in one place is a good perk for the customer but also good business for the bank.
It's no different for the Mike's Pub on Foursquare. Danny, who holds all of his company's happy hour functions at Mike's pub, is a key customer for Mike's Pub. Providing him status and exclusive offers is a great way to keep him loyal. But without Foursquare, identifying these customers could be a lot more difficult. And therein lies the power of Foursquare.
Foursquare provides a dead simple and engaging platform through which any small businesses can establish a loyalty program. Reading through Foursquare's information for businesses page reveals the amount of thought they've put into the matter. Customers are enticed to be loyal patrons so they can accrue status. Meanwhile businesses reap the benefits of understanding rich data about their customers. With an open API now available, the ecosystem of apps surrounding Foursquare is bound to explore. Small business owners may soon be able to harness Foursquare as an analytics tool to help them understand a tremendous amount of information about their customers. While young, I can see the potential for Foursquare to deliver a potentially huge win for small business owners.
Taking a walk back to the financial services arena, I wonder how Foursquare might be applied to banking. What types of behaviors might banks use such a localized loyalty program for? Could someone who deposits money at a certain ATM with regularity become the mayor of that ATM? Might that person then be rewarded with perks like having ATM fees waived while they were the sitting mayor?
Just a thought but an interesting example of how Foursquare can bring loyalty programs down to a much more granular and localized level than ever before.
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