When will social media stop getting lost?
Posted by Patrick Murphy on Tue, Oct 05, 2010
Thanks to the emergence of location-based social media services such as Foursquare and just recently Facebook millions of users are now recording their daily adventures and broadcasting digital breadcrumbs to their social graph. What is still unclear is the where is the brand value created and the potential return on investment.
As with any new social media mediums big brands are always quick to try and many brands have been trying to find value in experimental promotions, mostly based on frequency of visit. For example Ben and Jerry's offered three scoops of ice cream for three bucks (when it's normally north of five dollars) and a free scoop for the mayor on Foursquare.
While these experiments have generated excitement, but they only scratch the surface of what's possible. We all should know that check-ins are not enough — and businesses know that showing up does equate to an increase on the bottom line. A customer might be checking in without purchasing anything, or their purchases might be small, deeply discounted, or one-time due to competitor loyalty. Additionally, user points on most location-based networks are tied to a specific location. For instance, if a customer frequents multiple Starbucks locations, she could still never become a Foursquare Mayor — even though she may be a loyal and profitable customer.
However maybe if location-based social media services like Foursquare began collecting the size and frequency of purchases across all locations and mining the data of check-ins (including likes and dislikes), they could begin to build the next generation of loyalty rewards programs comprised of customer, spending, location, and sentiment. Such a program would benefit location-based service providers, brands, and customers alike.
We all understand that running and social media promotion to sell what certain consumers already buy is a waste of money for the company. But a social media promotion to shift behavior becomes an incremental win. The consumers win as well — this way, the brands they like can reward them with incentives to meet their needs better.
In short, when finally taken seriously, location-based services have the potential to become more than just a game — and much more than having bragging rights as mayor of a local haunt. So when will Foursquare stop getting lost and start help brands create true value.