Case Study: Using Foursquare to Increase Foot Traffic

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How does the owner of a business with minimal signage and a hidden fourth-floor location encourage walk-in business? For Tom Elliot of Idea Greenhouse, a co-working office space for entrepreneurs and startups in Durham, New Hampshire (pop. 14,638), location-based services have been key. Elliot uses platforms like Foursquare, SCVNGR and Yelp to let people working in coffee shops know that a more attractive group workspace is available nearby.

What kind of role do location-based services play in your marketing?
We are present on all the LBS sites that offer visibility to the business. We’re a new business started in March, and I thought this was a very low-cost way to get visibility for a brand that’s really unknown. We’re up on the fourth floor of a brand new building, so we can’t have great signage and we don’t have walk in traffic. The next best thing for me is to have Idea Greenhouse listed on all the various social networking and LBS sites. Someone who might be checking in on Foursquare at the coffee shop down the street will have the option to check-in at Idea Greenhouse and go, “I’ve never heard of that. What is that?” I think of [Foursquare] as a discovery tool. I actually think that Google+/Latitude—their check-in function is probably going to be the most useful discovery tool for us. More people are using Google than Foursquare, and the Google+ phenomenon—they haven’t talked about it, but the whole check-in aspect and who’s posting nearby is going to become very powerful.

How do you measure the effectiveness of an LBS platform?
I find the lack of measurability of visibility on these networks frustrating. I’d love to know how many people click through on Foursquare, for instance. Obviously, I know who’s checked in and I have that data, but it’s pretty low volume for us. You have to work hard to get up here on the fourth floor, so that’s why I use these tools to gain visibility. The other thing I’ve done—and I don’t know how Foursquare is feeling about this—is I’ve gone around and left tips at a number of places nearby where people work, like the back of the coffee shop that doesn’t want you there. I leave tips at all these places, like “Hey, this is a great place to get coffee. Come check us out if you want a place to work.” At some point, Foursquare might start to view that as spam, but at the moment I think they’re happy to get people leaving tips.

What other LBS platforms or networks do you use besides Foursquare?
I use Yelp, which I think it is a dark horse in this game. They are really working hard to get people to use them as an LBS system more than just for online reviews. I was on SCVNGR for a little while. I think there’s a great opportunity there. It just takes more energy than I’ve had to set up the quests or missions around town. The [networks] I pay the most attention to are Foursquare, Yelp, and Google Places. The Facebook thing is interesting, but it’s clunky for us. The way Facebook approaches location—I’m sort of amazed it hasn’t gone through the roof given the user base.

Do you ever use paid advertisements?
I have run ads on the Google Places system, but not with great success. I found the cost-per-click astonishingly high, but I was also competing in a fairly crowded space. I was competing for the keyword on “office space,” so that puts me up against the big realtors. The LBS advertising opportunity on Google is evolving all the time. My hunch is that over time that will be a place where I will want to put some advertising dollars. At some point, I think Yelp could be the same. Yelp has really valuable content and you can check-in. Facebook has my social graph and you can check-in. Foursquare is just checking in. I did do a special for Foursquare Day where I gave anyone who checked in anywhere in New Hampshire or Maine on April 16th a free month of co-working here. I had three or four people redeem that, so that was a really valuable promotion.

Did any of the people who redeemed your Foursquare deal continue on with a paid membership?
That’s interesting—none of them have converted to a paid membership. I think that has more to do with where we are than what the Foursquare Day special was. There were folks who lived far away from here and who came in here to work. It didn’t make sense [location-wise]. I look at this stuff as the gateway to word of mouth, which is still the most effective marketing on earth. I had four or five really socially connected people who now re-tweet me, know about us, and feel supportive and excited about this place. So even if I’m not getting their $40 a month, it was worth it.

We are so early in what smartphones can do and what mobile, social, and local convergence will do for a business. The thing that will make LBS successful for us may not have even been invented yet. I have friends who say, “Facebook Places has failed. Nobody uses it.” That might be true in the last year, but five years from now will Facebook be a monster in location-based services? I’d bet yes. Facebook has such a strong market presence with retailers compared to Foursquare, but Foursquare users seem much more passionate. As a guy who uses all these services, I routinely say to myself, “What’s the point of checking in on Foursquare?” There’s not a lot of deals, there’s no coupons, it’s not like they have a sales force. I will not knock the community though. Foursquare users are super passionate, they are plugged in and connected, and they are the people you want to know.

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This interview has been edited for length and clarity.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.