Foursquare: Consumer Friend or Foe?

Foursquare, a desktop and mobile app that consumers typically use to check in to bars and restaurants to let their friends know where they are, has recently announced that local NYC businesses can now offer coupons and other offers to the app’s users. Foursquare has been a great way for retailers and restaurant owners to find out who their most loyal customers are based on the people that “checked in” most often. If an individual “checked in” enough times, they were often deemed “mayor” of the location by Foursquare, and in some cases might receive a free drink or a % off a bill from the store or restaurant establishment.

Foursquare_screenshot_6.3.13

Until recently, Foursquare has only allowed large national companies, such as Starbucks and McDonald’s to advertise to consumers on the site/mobile app. In an effort to increase monetization, Foursquare is now testing out this opportunity with small businesses in NYC. Not only will these companies be allowed to reach consumers with coupons and offers when they check in to the restaurant or store itself (which they were already allowed to do), but local companies will also be able to serve up offers to customers who are nearby through location-based targeting and previous check-ins to neighboring establishments.

Foursquare is saying that the purpose of this test is to tap into the world of local small business mobile marketing because of the revenue potential of approximately $1.2 Billion, but what about the voice of Foursquare’s consumers? On the one hand, allowing small businesses in major cities like New York to advertise and push out coupons and other offers will likely bring in new customers, but from a user perspective, the app will now be even more inundated with ads, which might ruin the experience.

My questions for the class are:

  1. Would you be more willing to try out a new restaurant or visit a retail store owned by a local small business if you saw a coupon or special offer on Foursquare?
  2. Do you view offers from small businesses (in addition to existing offers from the larger national companies) as a form of enhancing a user’s experience or weakening it?
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3 thoughts on “Foursquare: Consumer Friend or Foe?

  1. As someone who is always looking to check out new spots I would definitely be more willing to try a local small business if there were special offers. I think this is a great way for small business owners to promote themselves and entice people to visit, because honestly, who does not like a good deal?

    I think offers from small businesses enhance the user’s experience because it could possibly make the user aware of the business if it just opened. I also feel that the positives from ads scattered throughout the app outweigh any negatives, such as becoming overwhelmed with having them all over the place. Small businesses can promote themselves, which in turn can help out the economy in general, and users of the app can find out about good places to go in their neighborhoods that they would not have found out about otherwise,

  2. I think in principal this shift in the Four Square business model makes senes. There has been a growing sediment around supporting small local business around the country and this may be Four Square’s way of getting in on the party. Four square seemed to be losing a bit of steam in the social space as other larger social platforms started to replicate their features. Social companies have to walk a fine line when controlling the amount of ads they pass along to the user, it is fairly easy to lose customers to competing platforms with the over use of ads. From a small business perspective this should help drive new business but at the same time they need to be careful not to recreate some of the issues seen with Groupon in which many business took a loss on the offers they ran.

  3. I signed up for FourSquare a month ago, and so far have had a positive experience. I have checked into 3 different restaurants/bars in my neighborhood (UWS) and each time I received some sort of discount or “prize”. If it did not provide discounts, I wouldn’t use it.

    I would be more willing to try a small business it they provided a coupon or special offer. Frankly, if FourSquare didn’t provide discounts, I wouldn’t use it as there would be no benefit for me as the “social” and “interaction” aspect of FourSquare for me with friends or strangers is not intriguing. Offers from small business do not weaken the experience, and have the opportunity to strengthen it (as long as it is not discounted Sushi). The discount has to be tangible and something of value, though the most used discounts would be get 10% off your next purchase to increase repeat business. I was excited to get a free dessert at the new restaurant I tried, and I could use it right there and then and not have to come back to use it!

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