5 Reasons Location-Based Services Benefit Customers

Two days ago, I wrote a post about “location” being the last third of the “holy trinity of data” for marketers. In the post, I explained why Facebook’s move away from check-ins wasn’t necessarily a bad thing. In writing the post, however, I neglected to mention why location-based services (and perhaps Facebook with its new functionality in particular) make sense for end users like you and me. Thank goodness for friends like Jim Storer who reminded me that without customers like us buying into location-based services — and more importantly, finding value in these services — marketers won’t have anything to gain access to.

Rather than try and explain how customers derive value from location-based services in the comments of my original post, I promised Jim that I would write a follow up post here. To that end, here are five (of many) reasons location-based services provide value to customers:

  1. Deals – to date, many companies haven’t stepped up their “offers” to the degree that they’ve made it worth it for customers to check-in and give them data. However, as more companies embrace this, more people will engage. Facebook is slowly winding their way out of this game but foursquare isn’t. To date, a few deals in particular that got my attention are Starwoods offer to connect their loyalty program to your foursquare account. Once you do and check into a location that you are physically “checked into” (meaning you have a paid reservation), you get 150 Starwood points. American Express is also making it compelling to attach your foursquare account to your Amex card. If you do, you get cash back for checking into certain vendors locations. And then there is TastiDlite. They also connected their loyalty program to foursquare, Facebook and Twitter. Swipe your card when you make a purchase and not only auto-check-in but also earn valuable program points.
  2. Tips/photos – I travel a lot. When I do, I am constantly looking for Starbucks (or good coffee shops), restaurants, bars, etc. By consulting with tips and photos that others have left, I can get recommendations from friends in 140 character bites.
  3. Discovery/sharing – this may arguably be one of the biggest selling points for Facebook and their new location functionality. How many times has someone posted that they are at a Farmers Market, new restaurant, new dry cleaner and you think to yourself, “hey, I’ve been looking for a new _____.” Because you trust that person (or hopefully you do if you are connected to them on Facebook, them sharing that location with you helps you discover new places. And while it’s not essential to have the meta data attached to the check-in, it certainly helps when you can click on a link in your friends status update to see more information about a venue (including which of your other friends have checked in).
  4. Passport – Gowalla has already started to head in this direction i.e. focusing on collecting your check-ins and stitching them together to show trips versus just individual check-ins. Over time, these can benefit others like you that are thinking about a trip from Boston to Austin or Chicago to San Francisco. Collecting this type of data can also dramatically help LBS and marketers provide better services, offers and ultimately recommendations to their customers. The ability to tag photos is also powerful as over time, we may forget where we were when we took a serious of restaurant pics, or photos of the ocean. Or beautiful flowers.
  5. Fun – let’s not forget how much fun gamification can be. Earning badges, awards, points and street cred arent’ for everybody but there many people (myself included) that will go out of their way to do things to play the game (case in point, checking into Gold’s Gym every other day gets me that much closer to my Gym Rat badge). I’ve also picked a restaurant or coffee shopbased on the fact that I want to try win (or win back) a mayorship.
Do you use a location-based service? If so, why? If you don’t, what would it take you to do so?
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  • http://community-roundtable.com/ jimstorer

    Thanks for posting this Aaron. You’ve obviously given this a LOT of thought and I agree with a most of what your points. What I’ll say is location-based services need to create a more compelling reason for “Joe Six-Pack” to start using their services. While what you list above will get the early adopters to give it a try, I don’t think the WIFM (“what’s in it for me?”) is there for most people to stick around and use it consistently.

    1. Deals – Making it easier for me to get points in your loyalty program isn’t really going to spur most people to act. Give them something real/tangible/cool/exclusive. It could be as simple as a special mayor t-shirt for anyone that holds the mayorship for a certain period of time. Just an idea. 
    2. Tips – I think this is valuable, but assumes people are using the service. These are hit or miss right now – they need more people sharing what they know. 
    3. Discovery – I can see this, but I also like actually communicating with a friend when I see the kernel of something interesting in their feed. We don’t need to get so efficient that we no longer need human:human interaction. 
    4. Passport – This is interesting, but most people don’t see enough value in this to make it a compelling reason to use LBS. Again, imho. 
    5. Fun – Sure. I question whether this aspect is enough to get most people to use it, but it definitely can be fun. 

    Clearly I’m a bit of a skeptic, but I do see opportunities with LBS. I just think companies need to think about it differently. It’s not something you duct tape onto your existing marketing mix. The early adopters are out there. To get to mass adoption there needs to be a compelling reason for the masses to use it. 

    Jim 

  • Anonymous

    Jim,

    Thanks for the thoughtful comment. Bottom line, I can “lead a horse to water but I can’t make him drink…” To that end, you are right. Some people will never embrace location-based services, just like some people have yet to embrace Facebook, Twitter or even LinkedIn. That is there choice.

    Regarding your responses below, you are correct in your skepticism as it relates to LBS “today.” But think about 2006 when we were trying to convince people of the benefits of community or blogging. We got a lot of, “why the hell would I want to do that” looks. Part of that was due to lack of understanding about the space. The other was because the tools generally sucked. Think of LBS being closer to 1999 in that regard meaning that we still have a long way to go.

    Once we get to a place where LBS is more integrated with everything we do and the real value shines through (particularly on the deals and tips/discovery front), I guarantee you that people… even the Joe Six Packs of the world… will be much more willing to use LBS. If you like, copy my comment into an e-mail and set the time of delivery to December of 2012 and I promise you that I will sound a lot more right than wrong on this post. If not, I will be happy to deliver a case of your favorite beverage.

    Best,
    Aaron

  • http://www.facebook.com/profile.php?id=10618874 Chase Sherman

    I don’t use LBS simply because not enough of my friends are using them yet.  And, there’s not one service that has overtaken the rest to where people are literally forced to join because of social pressure.

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  • http://www.blueclover.com/ Tim Hayden

    Aaron, 

    Great post on the “customer” side of LBS.  No doubt, the more local/location guidance and experience testimony shared by consumers on the web, the more valuable such services will become in making purchase decisions that are relevant and/or “fitting” to their preferences.

    While the networked potential of current LBS services allows us to compete with, share and learn from trusted friends, the big potential for all will be realized when brands begin to take contextual notes around location and opinion to deliver more impacting “offline” experiences. With the same focus that has been paid towards sentiment, the LBS dance between business and customer will be sweeter with real-time customer service and delights provided on-site.

    Most retailers aren’t taking LBS serious today in the current “active” formats (foursquare, Gowalla…) because there are few “Joe Six Packs” (the mass median consumer) who have the time or care to check-in, play or share. I believe this as much the brand/business’s responsibility to invite Joe to join the fun as it is to only target current users.

    Tim

  • http://www.facebook.com/wilken.holle Wilken Holle

    I really like your post Aaron. I’m currently writing my Master Thesis about Business Concepts for Location-Based Services/Games. Your blog helps me a lot! We developed the cubodo, a location-based game where the players have to carry package through the world. Currently, we are adding a service for customers to it. Thanks for your posts.

    Wilken

  • http://twitter.com/userOpia Karina Bahr

    Great article and thoughts.  I do agree that discovery is great for facebook because in a 2010 survey, 2/3 of Facebook users reported that a positive referral from a FB friend made them more likely to buy a certain product.   So at this point not many people are checking in or due to the lack of benefit/value but when they do….their friends listen!  Glad to follow you to see further insight.