This morning, deals site ScoutMob and location-based social network Foursquare have announced a partnership that will see the Atlanta-based company’s local deals distributed across Foursquare’s platform. 500 deals from Scoutmob’s thirteen markets will join offers from a handful of other sites like Groupon, Living Social, and Gilt City that are already on Foursquare.
The two-year old startup offers a markedly different approach to the traditional deals model. With ScoutMob, a user purchases a deal on-site through a mobile application that uses location-detection to confirm that the would-be consumer is at the business. Merchants pay ScoutMob a small flat rate for each redeemed offer, instead of the massive revenue share typical of most deals sites.
“From day one, we’ve been utilizing a user’s location as a form of currency,” ScoutMob Co-Founder Michael Tavani said in a statement. “That has allowed us to flip the traditional ‘pay upfront’ deal model on its head. And now Foursquare will enhance the Scoutmob experience through their tips and location-based social features.
The partnership with ScoutMob appears to be a particularly good fit for Foursquare, which has offered its own Specials through its Explore feature for sometime. Similar to the format of Specials, ScoutMob users unlock deals by effectively checking-in via its location-confirmation feature. (Tavani told Street Fight that while the functionality could exist down the road, users who redeem a ScoutMob deal on Foursquare do not automatically check-in to the venue.) By bringing the point-of-sale back into the store, the ScoutMob model facilitates the type of online-to-offline interaction, which Foursquare has worked to promote with Radar and Explore.
As Foursquare expands, the merchant product will remain at the core of its strategy — not only as a future monetization play, but as a way of adding value for more mainstream user today as well. ScoutMob’s pay-per-lead model, in which customers pay the merchants who then pay ScoutMob, eliminates a major pain point for local merchants with deals– namely, that they have to wait 30-60 days to receive the revenue generated by the promotion.
Steven Jacobs is an associate editor at Street Fight.