Glen Sloan is the mayor of Starbucks, though he admits he didnt do all that much to earn the honour.
Every morning Sloan, a motorcycle mechanic, orders a hot chocolate at the Starbucks on the corner of College Street and Euclid Avenue in Torontos downtown. As hes standing in line for his travel mug to be filled, he uses his iPhone to maintain his mayorship via the website Foursquare.
Foursquare is a social network that members use to check in at businesses and other locations they often frequent. The person who checks in the most is thereby crowned the mayor of that location.
Recently, Starbucks began using Foursquare to offer the mayors of each of their stores a $1 discount on their drink of choice.
I think platforms like Foursquare offer a real opportunity for loyalty programmes, says Phil Barrett, the vice-president of digital and mobile at Torontos marketing communications agency BStreet.
In the past, businesses would send coupons to homes, and maybe youd go or maybe you wouldnt, says Barrett. With Foursquare, youre motivated to go back time and again to maintain mayorship and get points. It drives beneficial behaviour for the retailer.
According to a statement from Starbucks, Foursquare represents a natural evolution of its social-media strategy. Whats great about Foursquare is that it links the real-time, in-store experience to the online community, it said.
Sloan agrees. It brings the Internet into the real world, he said. You can go and have a tangible experience instead of vicariously living through people. Its more like a morale boost.
At last tally, Foursquare had about 1.8 million users a relatively small number compared to Facebook and Twitter but the website has become part of a geo-positioning social-media phenomenon, and is growing by about 15,000 users a day. On July 2, the website hit a milestone over one million people checked in that day. Then, the next day, it reached that number again.
The company recently an??nounced that it had locked down a new round of $20 million in venture funding, led by Silicon Valleys Andreessen Horowitz. And while its business model remains a work-in-progress, marketing deals with location-based branded companies such as Starbucks are a clear priority for driving revenue.
Those who use Foursquare often refer to it as a game, because the process of checking in earns users online badges and honours, depending on frequency. According to Barrett, thats the true business opportunity.
The real opportunity isnt for mayors thats limiting and short-sighted, he says. Knowing that the top 5% of customers generate the majority of the revenue, its a whole new loyalty platform. And its a lot cheaper than Aeroplan.
He adds that Foursquare discounts are not foolproof: The disadvantage is you now have employees becoming mayors and preventing the best customers from en??joying rewards. In Canada, its still early days in terms of businesses utilizing Foursquare. Especially compared to the U.S., where Barrett says hes seen businesses offering everything from free drinks to happy-hour discounts to those who check in.
It really is something that could take off, he says. What [these businesses] want is foot traffic, and [Foursquare] will drive it in.