Rewarding Foursquare Mayors Nationwide

by Morgan Siem on May 18, 2010

in Mobile

Shock, awe and admiration. These overcame me when I read in Mashable that Mayors of Starbucks Now Get Discounts Nationwide with Foursquare.

“Starbucks…is officially turning on the rewards side of its experimental Foursquare loyalty program with the first-ever nationwide mayor special.”

Foursquare Mayor of Starbucks

Foursquare Mayor of Starbucks

I’ll explain my reaction, but first a little background: Foursquare is a location-based mobile application that allows users to “check in” from their phones at the places they frequent. People do this for a variety of reasons:

  • to let their friends know where they are
  • to show support for their favorite haunts
  • to get actual rewards from participating businesses
  • to collect virtual travel badges and become the virtual mayor of places
  • and so on…

Businesses have begun to recognize the value of these location-based games, because users are broadcasting information about the businesses to all of their online friends. When users check in on Foursquare, they have the option to send that information to: 1) their Foursquare friends, 2) their Facebook friends, 3) their Twitter friends or 4) all of the above. That in itself is a goldmine for businesses. It means that your Foursquare-using customers are telling all of their friends that they shop at your store, eat at your restaurant, etc. Then, it gets even better. Users can include a message. They might be doing your marketing for you:

Foursquare | Great Clips

Foursquare | Great Clips

Finally, Foursquare includes a link at the end of the message that provides more information to users about your business. It tells them where you’re located (and shows a map), who’s the mayor (who goes there most often), who else has “checked in” there, any “tips” that other users have left, etc. It even makes it easy for users to “like” your business, which connects them to you on Facebook.

If you still don’t get the point of Foursquare (either for a user or for a business), consider reading these great posts:

Now, on to the point of the post. Shock, awe and admiration. I am very impressed and inspired by this maneuver on the part of Starbucks because I’ve had personal experience trying to help clients take advantage of location-based mobile apps. The problem is not in getting the client to see the potential and realize the value. The hard part is in the implementation. Once you’ve coordinated the two teams (the app developers & the business/company/client) and come up with the special offer, you have two more battles to fight:

  1. Programming the Point of Sale system to accept the offer
  2. Employee awareness (to accept the offer)

Finding a way for the registers to accept the special offer at the point of sale isn’t as easy as it seems. Since these are coupon messages that people receive on their phones, there is no printable coupon and no scan-able offer. Getting around this means programming the system to accept some type of code and then training employees on how to key in that code, which brings us to number two.

Employee awareness and training is the single most difficult part of implementation and is what sparked such admiration in me for this effort by Starbucks. I am, of course, speaking of businesses with many locations. This is not an issue at small businesses with one location, a handful of employees (if that) and an ever-present owner. This becomes difficult when you have thousands of employees across a large number of locations. They work varying shifts. Some are part-time, some are full-time. Some are in high school, some have grandchildren. Some started yesterday and will quit tomorrow, while others have dedicated themselves to the company for years. And finally, some are Twitter-Facebook-Foursquare-users, and other are most definitely NOT.

Without the proper strategy for implementation, here’s your scenario:

  • Your customer arrives at your location and “checks in” (telling all her gazillion Facebook friends that she likes to shop at your store)
  • The mobile app gleefully informs her that she is now the mayor of your store
  • Since you understand the value of this app, you offer a special deal to your mayors
  • Her phone displays your message: “Since you are the mayor, we’d like to reward your loyalty. Enjoy 10% off your entire purchase.”
  • “WooHoooo!!!” she cheers
  • Now your customer arrives at the register, ready to pay (she decided to splurge and buy a few, extra, not-on-the-list items because of the special offer, btw)
  • She shows the phone message to the cashier
  • Uh-oh. BEWILDERMENT in the eyes of the cashier!!!

This is where your hard work behind the scenes can turn into a big fat FAIL. The cashier doesn’t know how to ring up the offer. Pray that your employee does not say, “What the heck is Foursquare? I have no idea what you’re talking about. There is no coupon for that.” Instead of saying that, your employee is digging through memos and paperwork while waiting for the manager to respond to the call for help that went out of the the loudspeaker. The line begins to get unruly. The 3rd person in line is tapping her foot, the man behind her is huffing and puffing and sighing loudly, while the woman at the end of the line abandons her cart because her toddler has GOT TO GO, and this is taking too long. The worst part of this is that in your attempt to please your mayor, you have royally embarrassed her. At this point, everyone is looking at her like she has two heads. The cashier is rolling his eyes, the manager is sweating, and the rest of the customers have lost their patience and are not being nice about it. Then, to just get this whole ordeal over with, the manager does a price override. You just lost your tracking, measuring and reporting data. Without the code, this sale won’t get tied to the special offer, and you’ll be scratching your head wondering why no one is taking advantage of your super-duper 10% off deal. With zero reported ROI, you pull the plug. Little Foursquare-fairies die.

I offer you this scenario not to scare you away from spoiling your mayors, but to implore you to have a hearty strategy for implementation before you jump in. You absolutely want to spoil your mayors because these are the people who end up being your spokespersons, whether you like it or not. When people can see that Bobby goes to your bar more often than anyone else, they’re going to ask HIM about your bar’s atmosphere, crowd, events, music, specials, menu and brews. Make him an offer to make him happy. But, don’t fudge it up like in the scenario above — it may sound ridiculous, but this person can carry a lot of clout over your other customers and potential customers — after all, he’s your mayor. You do not want him to endure a situation like the aforementioned scenario and then tweet about it.

So, I’d really like to say: Hats off to Starbucks and Foursquare! I’m very impressed and inspired. I’m curious to hear how it works out for people. Please, please leave comments below and tell me about your experiences redeeming special deals offered through location-based check-in apps.

I’d also like to plug TriOut (www.TriOutNC.com), a location-based check-in app that was developed in the Triangle area of North Carolina. I will attest to the fact that the developers behind this application are very open to working with businesses — you help them offer value to their users, and they help you offer value to your customers. Win-win.

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{ 14 comments… read them below or add one }

Michael Hubbard Michael Hubbard May 18, 2010 at 8:19 pm

I think the beauty of social media is that companies are still trying to figure it out. They do everything correctly, but then forget the all important training. I can say with first hand knowledge that I have always been impressed with Starbucks and their training, and am not surprised they’re pulling this off seamlessly. They’ve been in the social media space for as long as any company I can remember, and they’ve been listening and interacting with their audience. Behind the scenes they (or their agency) was clearly building a strategy – and that strategy included training. What I’m really curious on is who all got trained? In order to make it into Corporate Starbucks, you need to start behind the counter and work your way up. Did corporate get trained, or just the marketing department? I truly believe that if C-Level’s don’t get what you’re doing, then it will be one of the “line-item cuts” when the economy hits its next bump in the road. So kudo’s to Starbucks for implementing, and hopefully they’ve trained everyone from the bottom on up! Nice article Morgan (even though it was longer than most books I read :) ).

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Jay Dolan May 18, 2010 at 10:50 pm

I applaud the effort, but the problem for me is that the mayorship of my local Starbucks is locked down. Even if I drank coffee there and checked in every day, I still wouldn’t be able to claim it. It seems like a like of money and effort for a pretty small discount for one person. I want to see a balance between loyalty and everyone being able to get a discount or promotion.

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Morgan Siem May 19, 2010 at 9:21 am

You may have a shot, yet! Just heard a rumor that they’ve changed the algorithm so that recent check-ins carry more weight. That certainly will keep the mayors on their toes and in the competitive spirit. Not sure if the rumor’s true, though. Blame Phil Buckley if I’m wrong :)

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Dan London May 19, 2010 at 9:54 am

I agree with Jay. Rewarding only mayorships is shortsighted.

If a person checks in and send out that tweet, there is a HUGE value there to the business. If they also send out a “hey, I got $2 off a soy nut white chocolate caramel frapp-a-latte @Starbucks” that is a free ad for that business.

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Dan London May 19, 2010 at 9:51 am

I’m at SearchExchange in CLT this week (presenting as well) and Wayne Sutton’s talk about mobile check-ins received the most questions. I feel that businesses are still trying to figure out how to use location based marketing. For awhile, the big plan was to use text message offers when a cell phone user would walk by a business. I’m happy that no business has taken that approach. Using Foursquare, Gowalla and Triout (to name just a few) is a much better approach, but people just aren’t sure how to use them effectively. It was strange that only a few people at the event had used any service to checkin. In Raleigh, probably 80% of the attendees would have used at least one service.

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Lisa Sullivan May 19, 2010 at 10:34 am

I’m all about the location-based services and I definitely applaud Starbucks in this effort.

Jay brings up a good point – what about the employee who checks in to maintain their mayorship? Then, how does that work for the loyal customer? Perhaps, an algorithm in the software could be a simple question upon registration that asks “what company do you work for?” with a check box that indicates “broadcast this” or “keep private”. The software would then make a notation that that individual cannot qualify for mayor because of that fact but rather, the actual loyal customer can then get the discount or whatever favored prize. I realize there might be a glitch in that suggestion somewhere. I’m no tech expert but I think you feel me.

In any event, the use of location-based services from a business perspective is brilliant and in this age, should definitely be a part of the appropriate marketing plan.

As to Dan’s point regarding the percentage of attendees checking in, thanks to people like Wayne Sutton who consistently market the value of the check-in service in their locality, that is simply why others haven’t quite caught up with it yet. That’s my theory anyway. Besides, the Triangle has got it going on when it comes to technology & social media, don’t we? :)

Great post, Morgan!

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Brian McDonald May 19, 2010 at 10:43 am

Good post and you are right on target about how location based apps are at the very early stages. Nine months ago I wrote about Foursquare as the hype was mounting when it entered the Raleigh area. http://www.squarejawmedia.com/2009/10/foursquare-whats-all-the-hype-about.html. My skepticism has changed since more networks and users as well as vendors have started to embrace and reward consumer loyalty. Rewarding the mayor is just the first step and I’m interested to see how more loyalty rewards will evolve in the upcoming months.

Another local company, Golden Corral has gotten on the bandwagon with an iPad giveaway and free meals to the Foursquare mayor. I think it’s important to realize that this promotion is the start of a long journey to connect with customers that will continue to develop over the course of time.

Promotions and blog posts like these are what’s needed to increase location based network usage and bring awareness to this new customer relationship opportunity. As with other new technologies and behaviors like local/mobile search and smartphone integration we are at the earliest stages of this cultural behavior change.

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Phil Buckley May 19, 2010 at 11:47 am

I think Michael may be making an assumption that Starbucks pulled it off seamlessly. Nothing in life is seamless. The “seams” were the hours or prep work at the corp level, the training, the streamlined instructions to the employees and making sure that the managers at ground zero got the message that this was important – then it was seamless.

The problem for large companies is always the lowest link in their chain. In your example you say the clerk is befuddled – but that’s because there is no incentive for the average clerk to rise to the occasion. It would be an exceptional 20 year old part-time cash register jockey who could pull it off without batting an eye.

It’s only my opinion, but your example shows a management failing. The store manager needs to be able to teach and encourage ALL the employees how to be great. That includes some crazy new location app that corporate is yammering about.

All of the comments are right on. It’s still early. The early adopters like Starbucks who can pull it off smoothly look like geniuses and be sited in case studies, get lots of free publicity and the late arrivals who get on the bandwagon late next year and fail to track it will see only marginal increases thus confirming their belief that it was all hype anyway.

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John Lane May 20, 2010 at 11:45 am

Foursquare seems to be working to make it easier for businesses to…
- Track the success of “check in” offers;
- To give regulars — not just mayors — rewards based on frequency and advocacy;
- And better educate employees about the goals and reach of efforts.

Here’s the article about their analytics dashboard that does all that: http://mashable.com/2010/03/09/foursquare-business-dashboard/

Just image hooking real-time, check-in info with the register. Talk about direct measurement of ROI.

jl

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Bobby McDonald May 25, 2010 at 2:43 pm

John, the location-based dashboard really is the next step. Measurement of check-ins and customer behaviors could be crucial in delivering value (both to the business and the person who checks in).

For example, if you know that 25% of your customers stop at the Home Depot next store before coming into your shop, it might make sense to partner with them on some deals/promotions.

I’m excited to see how this niche of mobile marketing evolves.

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Morgan Siem May 25, 2010 at 3:11 pm

Great point, Bobby. That’s actually one of the really cool features that TriOutNC offers to it’s business users. You can see where your users checked in before they came to your store, and where they went after. Lawrence/Wayne – jump in! :)

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Wayne Sutton May 25, 2010 at 10:58 pm

Wow, the comments in this post are just as good as the post itself. So I started to leave a comment and it got longer and longer so my comment is now a blog post.

I’m not trying to do this for link juice but I think after you see the post you’ll understand. The value of the check in using location based services for business and customers. Time to measure those check-ins http://socialwayne.com/2010/05/25/check-in-value-location-based-services/

Thanks for the mentions everyone.

Wayne

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Dean May 26, 2010 at 9:31 am

I am admittedly “old school” but it seems like a lot of trouble to battle your way to Mayorship so you can save 30 cents on a latte. In the “old days”, just being a regular customer would earn you a freebee now and again. There was no technology, no programs, just the guy behind the counter recognizing a familiar face and throwing in a free muffin now and again.

I am not naive enough to think that systems are set-up to allow that – certainly not at chain stores. But I hope we aren’t at a place where a “regular” is shunned because they aren’t a “Mayor”

Frankly given privacy concerns and the effort required to earn Mayorships, I’ll pay the extra 30 cents and be satisfied with a simple “Hi Dean, how ya doing today?” from the person behind the counter. The basics still matter and they aren’t found on Foursquare.

Now, back to listening to Foghat on my 8 track ;)

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Eric Boggs December 5, 2010 at 11:39 am

A brief comment to acknowledge Phil for:

- dipping into the content archives and re-posting the good stuff.
- presumably doing so in an automated fashion.
- sending it all through Argyle.

Onward. :)

Eric

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