Foursquare & Crowd-Sourced Evangelists Tweak Loyalty Marketing

Many brands are trying to harness the power of social media for monetization purposes. Traditional marketing, by itself can no longer achieve the levels of success it reached in the past. However when combining both old and new school, one could benefit from the synergies that are created, and Foursquare is positioning itself to do just that.

Loyalty marketing has been around since 1929, when Betty Crocker first issued coupons that couldBetty Crocker loyalty programBetty Crocker loyalty program be redeemed for free flatware. In it simplest form it's an approach to marketing, based on strategic management in which a company focuses on growing and retaining customers through incentives.

Social Media offers a word-of-mouth forum which is the starting point of any good loyalty marketing campaign. Twitter has been successful in providing a real-time and viral marketing channel for users to communicate about goods and services. But there is no monetization program to take this engagement to its next level, leaving this part of the equation up to the APIs who have learned to leverage Twitter to their own advantage.

Foursquare, a young upstart location-based mobile social network is taking the best practices of traditional marketing and loyalty programs of the past and tweaking them for today's social media savvy consumers. In so doing, its moving customer involvement into a new dynamic and could perhaps overtake Twitter in the process (see "Could The Fiefdom Of Foursquare Become The New Twittersphere?")

Its 'game' and 'competition' components while unassuming at first blush are really what is driving early adoption and allowing Foursquare to scale exponentially this year.

Dennis Crowley, a co-founder of Foursquare was interviewed on July 30 and provides an overview of the service.

Becoming a Foursquare "mayor" while probably meaning nothing to most people at this point in time will soon become the rage in the weeks and months to come. Differing from the loyalty programs of the past (e.g. Marriott Rewards program), with Foursquare you no longer need to keep track of your plastic membership cards. Everything is tracked for you on your iPhone or smartphone.

So becoming "The Mayor" of an establishment (bar, restaurant, nightclub, etc.) is a relatively simple process. If you have tallied the most check-ins within the last 60 days at a venue in the Foursquare system, you are the deemed the "Mayor" of that place of business. And as Mayor you are entitled to additional discounts, freebies and swag that are above and beyond what the typical user would be offered.

If you want to become a mayor, you need to have checked-in on at least two occasions on two separate days and present an identifying photo because according to the guidelines on their Web site "no one wants a faceless dictatorship."

Here's some exclusive promos at a couple of establishments in Manhattan and Hermosa Beach, CA posted for their current new mayors.

While the "mayoral" promotional component is somewhat transient, as you could be displaced or overthrown by a contender at any point in time,"badges" help build longer-term loyalty engagement. Badges are a mark of permanent achievement. Once you've earned them, they're yours for as long as you're a player. And since there are a variety of badges to vie for (and others being added all the time), its a campaign that will take even the active user some time to obtain.  Many of the badges represent long-term goals, where you have to persist at an activity for a period of time (go out x number of nights in a row, check in at a specific number of places, etc) to earn them.

Foursquare BadgesFoursquare Badges

Going forward, Foursquare can monetize this system very easily based on quantifiable results. In tandem, it can provide the small business proprietor with an easy conduit through which they can run promotions, reward regulars, and track customer loyalty and increased sales.

In the past to build an effective loyalty program of consequence it took legions of people within a brand's bureaucracy to focus on the sales, marketing and analytical components of that campaign. Foursquare, on the other hand, by harnessing the power of social media has been able to accomplish this feat with a only three employees. As a small company without a sales force they have wisely chosen to expand their reach by encouraging their users to request venue proprietors to come into the Foursquare fold. In essence, these crowd-sourced evangelists become Foursquare's extended sales team and in essence... free labor.

So Foursquare's unique ecosystem has not only built a loyalty base of users for thousands of establishments, it has also engendered its own intrinsic loyalty program in the process. Combining last century's traditional marketing programs with the dynamic elements of today's social media is utilizing the best of both methodologies. In my humble opinion, in the case of customer relationship marketing, Foursquare is going to be the model to emulate in 2010. Worlds do not collide here, they compliment each other, very nicely.