For as long as I have been reporting on Foursquare, I like others have been impressed by their partnership deals with TV shows, newspapers, venues and brands. Their check-in model was emulated by competitors as small as one-off app developers and as large as Facebook Places. However, in all that time, Foursquare's use cases have been unsuccessful in showing significant ROIs for the merchants and brands they are aligned with (see previous post, "Foursquare Grows Up By Offering Cash-Outs On Check-ins"). In February of last year, I even suggested that Foursquare initiate a cost-per-check-in ad model to start showing some positive cash flow.
Possibly Foursquare's latest move might prove fruitful when the number-one credit card company in the land signs up to become its partner. Announced this week, Foursquare and American Express has just sealed a sweet deal where card users will be offered discounts at stores, restaurants and other venues via Foursquare when they pay at check-out with the card.
According to the Wall Street Journal, AmEx purposely sought out the two-year old start-up to attract a younger demographic. "You go where your customers are and they are on places like Foursquare," says Edward Gilligan, vice chairman for AmEx.
As part of the working relationship, AmEx customers can register their new or existing cards into the Foursquare system to access all the special offers from merchants that are also participating with Foursquare. Credits will be issued and shown on the card-holder's monthly statements.
The long shot of this particular deal is for Foursquare to show its participating merchants that they can are finally moving beyond the check-in novelty act to actually generating hard cash for its participants. It's conceivable that this could happen, but it might also work in the reverse by trading-down dollars. If existing card holders are obtaining deals at stores they would normally shop or restaurants they would normally dine, this program might generate less revenue. However if this partnership motivates existing customers to become more frequent buyers and if it attracts new customers, then it could develop into a winning proposition.
The arrangement also addresses one of Foursquare's major goals, which is to build loyalty and convince users to check in wherever they go. Foursquare's user base has grown to more than seven million in the past 12 months from just under 500,000.
The partners will pilot the new service next in Austin, Texas, at the South by Southwest Interactive Festival, a week-long conference for technology start-ups. Sixty local merchants will honor the "spend $5, save $5" promotion. According to WSJ report, AmEx and Foursquare plan to extend the campaign to other cities, but did not provide a date for their roll-out.
Dennis CrowleyGoing mainstream appears to be founder's Dennis Crowley's focus. As the first credit card deal of its type for any geo-location app, it is treading new ground that you can be sure Zuckerberg and his Facebook Places will be watching closely, if not emulate in the foreseeable short term.
So if you're on Foursquare and possess an AmEx card, there's is even more reason not to leave home without it.
For more on Foursquare, its evolution over the course of the last two years, and its other partnership deals, please check out some of my previous posts.