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Foursquare/Gowalla/Yelp check-in app growth: This is your tenth check-in here, have a free burrito

Posted on | April 13, 2010 | 4 Comments

Burrito Loyalty CardThere has been some debate about the potential of check-in apps to a) acquire a large userbase and b) generate significant revenue. Dave argues that you have to pay users to check-in because otherwise there is too little motivation to check-in, and Lawrence argues that checking in isn’t so hard and the game elements can do the job. They both make some good points, and I also think there are some opportunities to get scale without incinerating a shitload of VC money in the process.

How do you accelerate growth for checkin-apps?  Create a loyalty program for local businesses, and they will promote your checkin app for you AND users will have an incentive to check-in often.

What’s the incentive for local businesses?

Local businesses have a loyalty program they pay for and develop themselves, those programs cost money, and they have limitations no online business would stand for.

Imagine you’re the local coffee shop… You have to design and print up a bunch of little cards and hand them out to your customers. You need to train your staff to punch the cards and then probably sign them to avoid fraud. You have no idea if it’s worth the effort or not — you basically are in the dark as far as analytics are concerned. And worst of all, you get ZERO information about your customer other than that they seem to like buying your coffee. You can’t learn from them, and you can’t reach them by email or any other channel. Even though you need a loyalty program, the status quo sucks.

Would I mind putting a little sticker in the window stating that customers can now participate in the loyalty program just by checking in to Foursquare? Sure, why not. Would I pay for analytics or to reach my Foursquare visitors with offers? I might even do that.

What’s the incentive for users? It’s free stuff, and what the heck I’m curious what my friends are up to. The game probably appeals to some users, and combined with offers would be even better. Would I remember to check in at Ritual if it meant getting a free latte in the future? Absolutely. A lot of people already carry around those scuzzy loyalty cards in their wallet, and an opportunity to ditch them and still retain the benefits would be welcome.

Why should checkin-apps jump on this?

1) It isn’t much of a diversion from what is already being built. It’s a low effort, high potential feature.

2) It gives them a way to use local businesses as a distribution channel to drive adoption. Yelp did a good job driving their own adoption using stickers in the window, and this is at least as powerful.

3) It could be a revenue source down the road, as companies will pay to reach their (currently anonymous) customers.

4) For checkin-app startups who are not Yelp, remember that Yelp is well positioned to do this quickly. Get there fast.

If you’re a local business owner, I’m especially interested to hear what you think about this idea.

Note: Someone asked if the “mayor drinks free” in Foursquare counts. Clearly it’s a step in this direction, but because  it applies to so few customers and so few businesses it won’t drive adoption like a real loyalty program.

Comments

4 Responses to “Foursquare/Gowalla/Yelp check-in app growth: This is your tenth check-in here, have a free burrito”

  1. dmarks007
    April 14th, 2010 @ 1:18 am

    New post! : Foursquare/Gowalla/Yelp check-in app growth: This is your tenth check-in here, have a free burrito http://youcanchangeitlater.com/2010/04/1

  2. dmarks007
    April 13th, 2010 @ 6:18 pm

    New post! : Foursquare/Gowalla/Yelp check-in app growth: This is your tenth check-in here, have a free burrito http://youcanchangeitlater.com/2010/04/1

  3. spinnakerstudio
    April 14th, 2010 @ 1:43 am

    RT @dmarks007: New post! : Foursquare/Gowalla/Yelp check-in app growth: This is your tenth check-in here, have a free burrito http://bit

  4. spinnakerstudio
    April 13th, 2010 @ 6:43 pm

    RT @dmarks007: New post! : Foursquare/Gowalla/Yelp check-in app growth: This is your tenth check-in here, have a free burrito http://bit

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