7 Tips on Using Location-Based Social Media to Boost Business

September 14, 2010

If all publicity is good publicity, what’s even better? Free publicity. And what’s even better than that? When the free publicity comes straight from customers.

Location-based social media services, such as Foursquare, Gowalla, and Facebook Places are juicy opportunities for small businesses to get oodles of free publicity. That’s because these services allow tech-savvy, smartphone-enabled customers to spread the word about their favorite haunts by “checking in” to certain locations. Once they check in, they can leave tips, mini-reviews, and other forms of feedback that in many cases boost a business’s public profile. Though these services continue to be networking tools to let friends know where you are and what you are doing, small businesses are now using geolocation tools to bring in business.

So, how can your business get customers gabbing about your awesome sweet potato fries, stellar lattes, and happy hour deals? Here are seven tips that will help you become that lean location-based social media machine you’ve always wanted to be.

1. Offer rewards to drive customers to your business.

Sputnik, a café/restaurant/bar in Denver, CO had plenty of walk-in nighttime business from the concert hall next door. What it needed was to boost its daytime sales. So, its Foursquare promotion provides a free coffee for a user’s third check-in. So far, the strategy has worked: Sputnik’s venue page shows more than 400 people and almost 1200 check-ins. Meanwhile, food truck businesses in San Francisco, CA are known for reaching out to those users most active on location-based social media and offering them discounts in hopes of getting reviews. It’s free publicity that’s often received as entirely authentic by others.

2. And offer those rewards to the customers who talk.

Author Josh Bernoff, in this discussion on how to best use product giveaways to create buzz, says, “give free stuff to people who will use it, like it, and talk about your brand as a result…concentrate on the customers most likely to talk — Twitter users, bloggers, social network denizens — and give them advance access to your products and ways to find the greatness in them. Then they’ll do a lot of the marketing for you.” The trick is doing enough homework that you know which customers are most likely to gab about your stuff and to learn the best ways to target those customers by understanding what freebies, discounts, or other “rewards” that will encourage the most feedback.

3. Determine what kinds of promotions make sense based on your location.

Foursquare has created various tools to create promotional specials. For instance, businesses can choose to reward the customer who checks in the most, or who can encourage at least 50 customers to check in at once, among other ideas. But the most important consideration when selecting your promotional tool is location.

“In dense cities like San Francisco or New York, where you have a lot of Foursquare users, mayorship promotions are fun because you have a lot of people trying to vie for the title,” says Melissa Hourigan, a PR and marketing expert. One idea she suggests in these markets is to generate excitement through deadline-based mayorship promotions, where whoever is mayor by the deadline gets a special reward.

In smaller cities or places with lower Foursquare adoption rates, merchants may prefer rewarding frequency or first-time customers, in order to entice a wider customer base. “I was in line at a chain coffee place in Boulder [Colorado] the other day and checked in, when I saw a special for a nearby café for a free chai with a check-in,” Hourigan says. “I left and went straight over there. That’s direct marketing at its finest!”

4. Get your customers involved and excited, but don’t forget your staff.

If you offer a promotion, be sure that your staff is on board. One barista at Sputnik said he and his fellow servers didn’t know there was a coffee promotion on a location-based social media app the eatery uses. When customers bellied up to the bar, smartphone in hand, expecting free coffee, confusion ensued. This led a customer to post a “tip,” or comment, that showed up on the venue page. It read: “Asked for my free coffee, but they looked at me like I was crazy.” Not what you want.

5. Encourage customers to detail their happy experiences and respond to any bad ones.

There are ways you can encourage your customers to leave positive tips and reviews. Matcha Source, an online tea retailer, used Foursquare to create a “special” that promised users free tea if they left a digital “tip.” The strategy led people to promote the shop by checking in (an in-store sign reminded them to do so), and add a public recommendation that popped up on friends’ phones if they used Foursquare nearby. “I wanted people to be the preachers,” White says.”

There’s no guarantee that what they will post will be favorable, and in the event a customer posts negative reviews, the best thing a business can do is respond. Yelp provides examples of how to do so constructively, since customers who are vocal about a bad experience are also likely to be vocal about any efforts made to correct the situation.

6. Reporting tools can help you determine what is working and to better understand who your customers are.

Both Yelp and Foursquare provide business analytics to help businesses understand what’s working and what’s not. For example, you can get demographic information, and in the case of Foursquare, find out what percentage of check-ins are being broadcast to Twitter and Facebook. You can also track over time the number of page views your business receives on Yelp. These tools are free.

7. Creativity counts.

While location-based social network services have a ton of ideas and features to get you started, businesses will still want to exercise creativity. Amber-Leigh Stipicevich, foodie and avid user of Foursquare and Yelp, once had a drink named in her honor at a local bar, after she won a “mayorship” via Foursquae. “From a customer’s perspective, it’s still a novelty and game,” says Hourigan. So anything you can do to stand out on the advertising platforms and provide promotions that are relevant, targeted and fun can provide big bang for little (or no) bucks.