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Archive for the ‘Loopt’ Category

Sorry, Chris. At the risk of contributing to the fatigue of competing voices, I’ve got to say a couple of things about the Forrester Location-Based Services (LBS) study and public advice for marketers.

At the outset, I haven’t read the study. I’d love to read it, but I’m not ponying up $500  (though I’d be more than happy to provide a thorough review in exchange for a copy). I’ll be confining my comments to the public statements accompanying the release of Location-Based Social Networks: A Hint of Mobile Engagement Emerges, authored by Melissa Parrish with Sarah Glass, Emily Riley, and Jennifer Wise. Some of the things I’m pointing out may very well have been dealt with in the actual report, and if they were, that information should have been included in the public messaging about the release. It wasn’t, and the gist of the public statement is unequivocal.

Cutting to the chase, the author lays out her concluding recommendation and key takeaway for marketers:

But is it time for other marketers to start jumping on this bandwagon?  We don’t think so.  Though many LBSNs are gathering steam, the landscape is fragmented and the programs can’t scale just yet. But with large companies preparing to enter the market (I’m looking at you Facebook and Yahoo!) the time for marketers to get involved is coming.

For the sake of context, “other marketers” are other than those who “experiment with new technologies as a way to stay current and to reach key portions of their consumers” (in this case, those consumers being “young, male, well-educated, and influential”). Let’s set aside the fact that the category of experimental, male-targeted marketers is frickin’ huge, meaning the time is right for a LOT of businesses to get involved with LBS. Let’s also set aside any questions about the size of the data set Parrish worked with, the quality of the sample, or any other concerns about the numbers that underwrite the study’s conclusions. Instead, let’s just consider those other marketers, the one’s whose target customers aren’t early adopters of Foursquare or other location-based applications and platforms.

The crux of my complaint stems from three core beliefs/assumptions, the first two of which are:

1. IF location-based services achieve mainstream adoption and high rates of interaction, marketers and businesses will reap enormous rewards from proximity marketing, including attracting more first-time customers, encouraging more repeat business, and increasing sales.

2. IF marketers and businesses are early adopters of location-based services, the incentives they offer for discovery and patronage will attract mobile users who do not currently derive value from LBS.

Given the admittedly anemic usage statistics for location-based services, at least in comparison to other social media channels, it probably seems intuitive for Forrester to recommend a cautious approach for marketers. With a lot of social media technologies, that’d be the right call. But as far as marketing is concerned, location-based services are a fundamentally different kind of social technology, and from what I can glean from the public statements about the Forrester study, that crucial difference seems to have been missed.

The fundamental distinction between location-based services and other social media technologies is this: one of the principal benefits of location-based services is incentivized discovery and partronage. As such, marketing is hardwired into the genetic code of the technology. To understand this difference, consider another social platform that has businesses scrambling to figure out marketing value, Twitter. I still don’t think Twitter has come up with a decent marketing option, primarily because marketing is an afterthought, and generally perceived as intrusive and viewed with suspicion. Engagement with brands on Twitter is chiefly dictated by consumers, as advocates and critics, and while there’s ample opportunity for interaction, customer service generally prevails over marketing in terms of organizational imperative, scope of engagement, and communication content. In plain English, Twitter users don’t want to be marketed to. Foursquare users, on the other, want and expect to be marketed to.

In a previous post, I explained the value I get from Foursquare – “discovering new places, receiving special offers, serendipitously meeting up with friends while out on the town.” Aside from the social benefits of LBS, which are a distant third among my priorities, my use is primarily driven by desires to discover new places, explore entertainment options, receive loyalty rewards, and reward or punish businesses for customer experiences. In order to realize the full benefit of Foursquare, I depend upon the participation of businesses. I want to know details about your venue, hear about the daily specials, receive special offers, and be rewarded for my patronage. Incentivized participation is one of the principal benefits and primary selling points of Foursquare and other location-based services. Your marketing is welcome here. It actually enhances my experience. How many social media channels can you say that about?

Without reading the report, I think it’s safe to say that Parrish and the other contributors to the Forrester study see the potential value of proximity marketing via location-based services. Who wouldn’t see the value in a channel that functionally allows you to tap your customers on the shoulder while they’re in the neighborhood and whisper an offer they can’t refuse? They see the value, but they urge caution. Here’s where I think the difference between location-based services and other social media channels really matters, and why I think the conclusions of the Forrester study should be reconsidered. Early adoption of location-based services by marketers and businesses is integral to the mainstream adoption of location-based services. Marketing is inextricably bound up with the sine qua non of location-based services, and therefore an essential component of the user experience. Without marketing-driven incentives for participation, adoption will remain limited to the young, male, well-educated and influential audience that primarily derives value from the social, gaming, and other aspects of the experience, aspects that have thus far failed to demonstrate wider appeal. Instead of urging caution, Forrester should be championing early adoption and encouraging businesses to nurture a technology that can make their dreams of proximity marketing come true. They should be warning businesses not to remain on the sidelines, and advising them to take an active hand in the direction of this burgeoning market. Get out there and figure out what works for your target customers. Generate the added value that will drive adoption. I’d love to see the cost calculations that indicate this approach isn’t worth trying.

I’m using Foursquare as an example here, but I’m truly platform agnostic when it comes to my opinions about the potential of location-based services. I like Foursquare because it has a strong and quickly growing user base, dedicated tools that are easily accessible and affordable to most small business interested in reaching a local audience, and offers one of the top 2 or 3 best UI/UX in the market. Will they eventually dominate the space Facebook-style? Will Facebook get it together in time to lay a Google-style smackdown on Foursquare? Is Yelp itching to tag in? Don’t know, don’t care (though I will care in exchange for a financial stake in and/or lucrative engagement with Foursquare, Facebook, Google or Yelp). The marketing tactics that attract the most new and repeat business are unlikely to vary significantly across platforms. Moreover, since this is an emerging market built on fledgling technology, active marketing participation can influence the direction of future application and platform development. What works for marketers will be built into the feature sets of all LBS platforms, because what works will provide the best experience for LBS users. So, you don’t need to wait for a Winner to emerge from the fragmented platform and application marketplace before you incorporate proximity marketing via location-based services into your marketing mix.

Aside from hindering adoption and missing out on the opportunity to influence the direction of the technology and market, the cautious approach recommended by Forrester will unnecessarily extend the learning curve for marketers, and lead to the adoption of inappropriate engagement models. This is my 3rd basic assumption:

3. A platform agnostic approach that encourages early adoption, experimentation and testing offers the best hope for long-term success when the technology matures.

In the public statement accompanying the Forrester study’s release, Parrish suggests that “other marketers” take a wait-and-see approach to location-based services, primarily because usage is low, the user base is monolithic, the market is fragmented, and the future uncertain. I’ll grant that all of this is true. But as I said before, the ultimate Winner’s technology will not be so unique and distinct from Foursquare, Gowalla, Brightkite, Loopt and other existing location-based services as to render obsolete the marketing lessons learned before the victory. If anything, the uniformity of existing users should indicate a need to tailor marketing tactics to particular target customers. As with all social media technology, usage differs dramatically based upon the diversity of users. Learning what works for your particular target customers will be a matter of trial and error. Waiting simply amplifies the pressure to adopt a “previously proven” engagement model once the market matures, one which is unlikely to fit the unique circumstances of your business, product, services, customers, competition, and local market. Marketers should be encouraged to start experimenting with LBS now, while the barriers to entry are relatively low, and the benefits of early adoption so very high.

Aside from pragmatic concerns about the recommendation of caution issued by Forrester, what the study ultimately highlights is the need to preface our research with an understanding of the things that make each particular social technology unique, as well as the particularities of user experiences and expectations of each. Marketing is a critical aspect of location-based services, and recommendations based on any study that fails to put that fact front and center should be highly suspect.

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In a recent blog post, Chris Brogan explained why he’s not a fan of location-based social applications such as Foursquare and Gowalla. From a business perspective, these services don’t add any apparent value for Chris, and might even cause problems, such as unintentionally revealing the identity of a client or inadvertently snubbing someone who might want to meet up if they knew he was in town. Personally, Chris doesn’t much care to be the “mayor” of his local haunts, preferring instead to reap the more traditional perks associated with frequent patronage. While Chris’ post hardly qualifies as a “rant”, he’s an incredibly influential guy, and this rather succinct post has already garnered 98 comments, a good portion of which laud him for pointing out the Emperor’s lack of clothing. Unfortunately, and with all due respect, Chris is just wrong about location-based services (LBS).

You’re not Chris Brogan

Let’s assume for a second that Chris is right about the potential professional pitfalls of LBS. His concerns apply to only a very narrow subset of LBS users: those folks who need to keep the reasons for their business travels secret, and are popular enough to have to worry about unsolicited invitations from their hundreds of thousands of followers. I’m going to go out on a limb here and suggest that neither of these apply to the vast majority of potential LBS users. Even for folks like Chris, these aren’t exactly compelling arguments against LBS. Don’t want folks to know you’re in town, whether to conceal a client’s identity or insulate yourself from unwanted contact? Don’t check in. Holy crap, that was easy. It’s not like they implant a GPS chip in your brain that automatically broadcasts your exact whereabouts when you sign up for Foursquare. Selective use of the technology pretty much solves all Chris’ professional concerns.

From the comments on Chris’ posts, it also seems that there is a general misconception about how information on these services is conveyed. Sure, you can post your check-ins to Twitter, Facebook, and LinkedIn, but it’s certainly not required. With Foursquare, for example, only your Foursquare friends will be able to see your check-ins and history unless you intentionally push that information to a third-party platform. You can even check-in “off-the-grid” to hide your whereabouts from everyone but still earn badges, see nearby specials, and otherwise take advantage of the service. If you’re selective about who you choose to “friend” on Foursquare, and how and when you send check-in information to other social sites, you can reap the rewards of LBS without sacrificing your privacy.

We don’t need no stinkin’ badges

It’s funny – in a sad-funny sort of way – that so much of the conversation revolves around badges, mayorships, check-in points, and other social gaming aspects of location-based services. To me, these are utterly beside the point, and certainly no reason to avoid using these services. Not to dismiss the value of these social gaming elements entirely, at least to a subset of potential LBS users, but that’s not why I use Foursquare. Here’s how I put it in my comment on Chris’ post:

I’m sitting at the bar, enjoying a happy hour cocktail, and decide to “check in” via Foursquare (or Gowalla, BrightKite, or any other LBS). A notification appears, informing me that the restaurant next door is offering free appetizers to Foursquare users. I’ve never tried the place, but a quick perusal of reviews that accompany the business listing on Foursquare makes me think it’s a place I’ll like. When I check in at the restaurant, three more notifications appear, one of which is for matinee-priced admission to the next showing of Inception at the theater across the street. A check in at the theater pulls up another half dozen notifications, including a free cocktail at my favorite bar around the corner. And all of this happens without me notifying a single person of my whereabouts, thanks to privacy controls on the LBS platform (sharing locations with other users or the general public isn’t mandatory). What’s not to love?

The benefits I receive from location-based services – discovering new places, receiving special offers, serendipitously meeting up with friends while out on the town – have nothing to do with social gaming. These are practical benefits that improve my offline experiences, from dining and entertainment to shopping, and enhance my appreciation of any local environment. As more users jump on board, and venue and review data becomes more robust, discovery will become even easier. As these services mature and brick-and-mortar businesses become more sophisticated in their use of the technology, the tangible rewards of LBS participation will extend beyond mayors and loyal patrons to include incentives for first-time customers (sorry, Starbucks, but I can’t compete with Johnny the barista in terms of frequency of check-ins, and I HATE Frappucinos, but 30+ check-ins at a half-dozen locations in two months ought to count for something). Even at this early stage of the LBS phenomenon, I’m already “winning,” and that has not a damn thing to do with badges.

Professionally speaking, I have a hard time wrapping my head around Chris’ arguments against LBS. If he’s truly concerned about folks discovering the identity of a client, he might want to remove the Clients link from the New Marketing Labs website. If it’s about maintaining stealth-mode while courting new business – or keeping an existing relationship secret – the concern seems kind of absurd unless he’s talking about traveling to a one-business town. And if it’s the unintentional snub he’s hoping to avoid, doesn’t that same risk occur ever time he shows up for one of his well-publicized out-of-town speaking engagements? If there’s a professional-life argument against LBS in here, I’m not seeing it. On the other hand, I can envision ways LBS participation could be good for business. As a consultant whose business is not quite at the beating-clients-off-with-a-stick stage just yet, I have no problem advertising my arrival in a new city, or letting potential clients know I’m having a coffee down the street from their office. I might not have time to meet, but I sure as hell have time to shake a hand or take a call and make future plans. Seriously, there’s a downside here?

You got your online chocolate in my offline peanut butter! Mmmmmmm!

Setting aside the question of whether you as an individual should jump on board the geolocation bandwagon, there is the more important issue of what the services mean for your business. Put as plainly as possible, location-based services are a mobile marketing dream come true. Imagine being able to reach your target consumers when they’re not just in-market, but right around the corner. For brick-and-mortar businesses, LBS are ideal channels for attracting new customers, rewarding loyal patronage, creating awareness about promotions and special offers, identifying market synergies, and keeping an eye on the competition. Services such as Foursquare have already created tools for businesses, including the ability to offer a variety of specials through the service, promote specials in-store, and track venue performance. Here are just a few examples of businesses taking advantage of the Foursquare opportunity:

  • Village Lantern (New York, NY)
    Everyone who checks in gets a 2 for 1 Svedka cocktail. The mayor receives a free shot of Jameson on Friday.
  • Matcha Box Pop Up Store (NYC, Ny)
    Receive a free matcha tea, or latte when you leave a tip about Matcha Box.
  • Boqueria – SoHo (New York, NY)
    Free Glass of Sangria with your meal!
  • Mermaid Oyster Bar (New York, NY)
    Check-in to claim a FREE side item (limit one per table per visit). DETHRONE THE MAYOR and receive a FREE lobster sandwich! You must show your phone to your server or bartender to activate these promo
  • American Eagle (Ottawa, Ontario)
    Check-in to any AE store and unlock a 15% Off discount towards your next merchandise purchase. Expires 7/31/10. Limit one per customer.
  • Foos Burgers (New York, NY)
    Free game of foosball on your first check in. Beat the reigning champion and win a beer and burger at Lucky Strike. (Mon – Fri 10-6)
  • Emack & Bolio’s (New York, NY)
  • Bobby Berk Home (New York, NY)
    Show us your check-in and get 15% off any regular priced item.

If  your business isn’t already experimenting with proximity marketing through location-based social applications, it should be. Not only are these services great marketing tools in and of themselves, but they are rapidly surpassing more traditional channels. As Brian Solis recently noted,

Local services are realizing, albeit slowly, that increasing visibility in the real world, on the traditional Web and now the social web, is an effective way of competing for attention where it is focused. Foot traffic, Yellow Pages, Google and Yahoo Search are losing favor to new forms of research and referrals. Yelp paved the way for social reviews and referrals, but Foursquare and the like are introducing trusted opinions and real-life networking into the mix that reward exploration and experimentation. Businesses can only benefit by playing along.

Given the massive growth of location-based services over the last year, the only real question here is which service to choose. Foursquare, Gowalla, Loopt and Brightkite are the Big 4 of location-based social applications, with Foursquare dominating the other three in terms of both users, venues, check-ins, business participation, and rate of growth. However, Facebook has made rumblings about joining the geolocation fray, and Yelp has already dipped its toes in the LBS waters, so the future of this market is far from decided. At the moment, I urge clients to remain platform agnostic, and advise that they examine local LBS usage data to determine platform popularity in their local market. Unless promotional participation is cost-prohibitive on a given platform, try them all. Additionally, going with a service that simplifies engagement and tracking is always a good idea. But the bottom line is this: if you’re not already thinking about how location-based services can help your business, you’re missing out on a tremendous opportunity. I wonder if Chris would disagree with that statement?

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