April 12th, 2010

Talk Business Interview: Location-Based Services

Thanks to Roby Brock of Talk Business for the invitation to talk about location-based services on his program.  Click here for the Talk Business article and check out the interview here:

Here are my full thoughts on practical applications for location-based services:

Just when you were finally getting comfortable with Twitter, the social media geeks introduced FourSquare. I can hear you all mumbling, “FourSquare is stupid.” While location-based services, such as FourSquare, may not take off as predicted, at this point FourSquare is close to reaching one million users, with much of that growth occurring in the last few months. FourSquare even has its own day, which is April 16th of course.  With its growing popularity, it is time to learn more about these location-based services and figure out how they might be beneficial to your business.

Location-based applications are services that allow the user to update his or her status (much like Twitter or Facebook), but attach a very specific location to that update, either with a dot on a map, a longitude and latitude reading, or a location defined and named by the users (a restaurant, retail location, ballroom at a convention center, etc.). There are several of these services available—FourSquare, Gowalla, Loopt, Brightkite, Google Latitude—but FourSquare is the service with the most members.

Initially, these services were created because people wanted to know where their friends were: approximately 55% of all text/SMS messages sent are some variation of “where are you?” (equating to almost 650 billion location-based service text messages in 2009). Now however, consumers are not adopting these location-based services because they want to announce to the world their every move, but because people are inherently social—they want to communicate, share and interact—and using the services, they can: find other people at the same locations at the same time, find out if friends have been there before, find tips for getting the most out of their experience at that particular location, and get rewarded for participating.

As a result of this activity, customers are putting businesses on the map, literally. Businesses can leverage consumer participation in location-based services to improve the customer experience. By giving customers reasons to check-in at a particular location, businesses encourage repeat visits and loyalty. Some examples of how businesses are using FourSquare are:

As an added bonus for businesses, customers are self-populating a contact and feedback database. Check out a business on FourSquare and you will see the names and faces of all customers that have checked-in there (and by clicking on the visitors you can view their profile and see where else they like to go). You will see their comments and tips they have left future visitors. You will see the total number of check-ins at that location and the person currently holding the “mayor” title. There is data to be found on sites outside of FourSquare, too. Go to Checkin Mania to see a map of all locations where check-ins have occurred in a specific area. You can filter by service to see those using FourSquare, Gowalla or Brightkite. This tool gives you a good indication of the location-based services application penetration in your specific area. Businesses can use this data to improve their service, reward loyal customers, determine if there are other businesses in the area they should cross-promote with to drive even more like customers, and reach out to key influencers to become ambassadors of the business.

The bottom line: location-based services offer additional opportunities to engage with existing customers and drive new customers. We are only just starting to see the possibilities for leveraging these new tools to the benefit of businesses.

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