Case Study: RadioShack Finds Foursquare Customers Spend More

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When RadioShack launched its pilot campaign with Foursquare in August 2010, the company’s director of social media and digital strategy, Adrian Parker, was skeptical that the platform could be used as an effective marketing tool. So RadioShack started out small and began using the redemption codes embedded in its check-in offers to track the purchases of its customers. After 15 months of tracking this data, it became clear that customers who check-in on Foursquare spend more money on average than those who do not. These customers are also more likely to buy wireless products, a core component of the RadioShack brand.

How did RadioShack get involved with using Foursquare?
I think our history and pedigree with Foursquare is interesting because, I will admit, at first I did not want to proceed with them. We were just starting our social media engagement strategy in early 2010. There are so many buzzwords and so many platforms that come across your radar when you are trying to get started in social media, and everybody has a silver bullet. It seemed like location was just becoming a buzzword and we weren’t really sure where we wanted to go. Instead of committing to this huge partnership that was going to cost a lot of resources and time on our end, we agreed to do a test campaign, a pilot, with Foursquare in August 2010 to really understand the platform and gain a deeper knowledge of how it was going to work with consumers. [We wanted to know] how the associates in our stores were going to work with Foursquare mobile and to really test the platform. So we started there.

We immediately saw significant results in terms of identifying our core and profitable shoppers with Foursquare who not only spent more per transaction, but are more likely to buy a wireless product, which is something that is core to our business. To use a very bad metaphor, our relationship started as a date, then moved onto dating steady. I’d say right now we’re definitely at the point where RadioShack and Foursquare are definitely engaged. We launched some of their new items in our dashboard this year. We’ve been a launch partner with some of their badge offerings, as well. They see us as a great way to test new retail technologies and retail applications. It really has evolved from a first date to more of a brand engagement.

How do you judge the effectiveness of a campaign?
Foursquare’s performance measurement is actually looked at through the same lens as our other marketing activities. Our key performance indicators for any traditional marketing activity would be items per transaction, dollars per transaction, and sales lift. Above and beyond the traditional marketing metrics, we measure earned media. Are we getting buzz and credit for being innovative? Is there media pickup around the marketing activity? We definitely measure the program [against] what we see in other marketing media, like direct mail and email. Compared to those, this performed extremely well and very profitably. It definitely [is] a great way to get buzz in the industry and to get credit for being innovative. Using Foursquare is a great way for us to use technology and wireless platforms to talk to consumers about the devices that we sell.

How do you track the items per transaction when somebody checks-in on Foursquare?
How it works for us is, when we do offer a special or a discount, like a mayor discount or a general check-in offer, we attach each redemption to an actual code. When somebody shows [the associate] their phone and says “I’m a mayor” or “I just checked-in,” on that unlock screen for the special, [the associate] would enter that [code] into the system. So every [redemption] goes into the system and we record that like we would an email coupon or a direct mail coupon. We quickly close the gap between being a mobile, digital check-in to a physical transaction in one of our stores.

How does the financial investment for an LBS campaign compare to other types of marketing or advertising initiatives that you’ve done?
We’ve found that the cool thing about Foursquare is that you can use the specials and the platform totally free. I can go on the dashboard that they just launched this year and activate a special to drive immediate revenue and share of voice and awareness for my brand and my local stores for absolutely free. There is no media or programming investment involved with the partnership. Now, the cost comes when you do a custom badge or a custom program. But for the majority of retailers or even major brands, the Foursquare platform is open source and it’s crowdsourced information. In talking to their founders, their vision is really just to create this ultimate lexicon of check-ins and venues to help you navigate the city. So it’s a very affordable kind of channel, of course, because a lot of the aspects of it are free. And from there, your only investment is how creative you can get: Are we going to offer prizes and rewards? Is there a discount? Is there a cool campaign that we could try to challenge our agency partners to come up with? It really is about being more creative and less about the investment, because it’s a pretty scalable and efficient channel for us.

What mechanisms do you have in place to encourage people to check-in?
We have found success in having the Foursquare campaign reinforced by other marketing elements. We’ve used it as a store driver or a traffic driver for our retail locations knowing that you become alerted to a Foursquare offer anytime you’re within 200 meters of a RadioShack store. Once you see that, you’ll check in. To support the overall program, Foursquare is tagged in our circular. Foursquare is tagged on our blog and our YouTube videos, as well. We also include it in our e-mails and some of our Web campaigns just to have an overall awareness that we are a Foursquare participator in the retail space. From there we also educate our store associates, so that when a consumer checks-in, or if they’re buying a new phone, then there’s an opportunity to message the Foursquare platform.

You might know that we’re approaching the tipping point for smartphone penetration. So there’s a good number of people who are purchasing their smartphones for the very first time. As part of that transaction, our associates who are experts in mobility and technology are able to walk a smartphone newbie, so to speak, through how to download an app, how to do a check-in, how to download Facebook, and how to text. So we use social media and location-based applications as a walk-through and a demo of how to use your new smartphone device.

How are you leveraging your scale in LBS campaigns?
We’ve got 6,000 locations across the globe. We’ve got franchise and corporate-owned stores. Some strip mall stores. Some mall-based stores. There is such an interesting dynamic. Our biggest opportunity to improve the Foursquare program is just associate awareness. We make sure everyone’s aware of the program, that they’re trained on how to redeem a mobile offer, and that it becomes a part of that retail experience for our associates, as well.

I admire brands like Tasti D-lite. If I had a brand I could give kudos and accolades to, it would be them for being very innovative with Foursquare. They’ve injected it into their marketing across the board, and they’re very nimble. They are also very decentralized, and so they actually empower each store manager and their regional field representatives to have Foursquare campaigns. For us at RadioShack, we’re still centralized to where we have the master dashboard for our Foursquare program. As we migrate to a more de-centralized model, [we will] empower our associates to have more location-based tools.

Do you have any special LBS promotions in the works for the holiday season?
Yes. We are still confirming, but I can say some exciting things are happening. We’ll definitely launch a new custom badge program. Last year we launched the Holiday Hero badge, which [people earned by] checking in at different tie-ins. So it might [have been] Starbucks to get caffeinated, then the gym to get in shape, and then that third check-in at a RadioShack would unlock the Holiday Hero badge. We are going to announce a [new] badge within the next few weeks, following in that cadence. The idea will be to talk to our audience about what is “So Right.” So Right is our new platform and we will have a badge called the So Right badge that rewards customers for checking into venues, events, and occurrences. The payoff for that is going to be a really philanthropic angle. This one is not necessarily going to be about offering a discounted value. We are going to try a new really innovative way to add value. Stay tuned for that.

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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.