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?

Think Before you Speak!

No, this isn’t another post about Google + although the rapid rise and excitement of Google’s latest and greatest social network is the impetus for this post (that was originally to be titled, “Shut the F*ck Already with the MySpace Comparisons). However, with all of the recent tweets, status updates and blog posts predicting the demise of either Facebook, Twitter or both a la MySpace, I couldn’t not share my thoughts in a space that allowed for more than 140 characters. What I can tell you is that while I have seen too many big companies fail over my lifetime to not know that it can always happen again, if Facebook and Twitter fail, it won’t be for the reasons that MySpace did.

For starters, let’s clarify that MySpace did NOT fail because a newer, shinier object came along in the form of Facebook OR Twitter. MySpace failed because of several fundamental flaws in the way it operated, particularly once it was purchased by Rupert Murdoch (btw, Businessweek wrote a great article that goes into all the details of the rise and fall of MySpace).

In particular:

  • Once Murdoch purchased MySpace, there was significant pressure to deliver revenue (not necessarily a bad thing). Unfortunately, this forced MySpace to ramp up the advertising opportunities on the site which led to a lot of spammy ads for unsavory products. As a corollary to this, Twitter and Facebook are both venture backed and private. While both are feeling pressure to deliver more revenue, innovation has taken precedence over money.
  • MySpace made the fatal mistake (I’ll call this the AngelFire Boner) by allowing users to customize the background, fonts, layouts of their pages. While creativity is good, allowing for 8 billion different user interfaces (UI) across 350 million pages is not. UI 101 calls for putting things in the places where users expect to find them. Some people are good at this. Most people are not.
  • Demographics – while most companies love to attract the 18-35 set (male-skewed), there is a downside to this strategy. This demographic tends to be technology-savvy and fickle. The combination of the two allows them to pick up their “ball” and take it to a different ballpark whenever they like. You’ll notice that Twitter’s demographic came out of the gate closer to 32 than 22 and Facebook’s fastest growing (and most dedicated) segment right now are women over 40.
  • Lack of developer commitment. While Twitter and Facebook have both fostered rich ecosystems of developers, MySpace never went down this path.
  • After a few months of MySpace being the apple of Murdoch’s eye, a new “jewel” in the crown emerged when Murdoch opted to court and ultimately purchase the prestigious Wall Street Journal.
Does this mean that the rise of Googe + (which is still has only 5 million more users than photo sharing site, Instagram, and the same number of users as location-based service, foursquare) won’t kill either Twitter or Facebook? No. But if it does, it will be for different reasons than those that dethroned MySpace. To that end, I responded to a tweet by Edelman EVP and uber-blogger, Steve Rubel, regarding a post that tech-blogger, Robert Scoble, wrote the other day about how Twitter had become boring and what it could do to fix that problem. My message to Steve was that “Twitter has become like electricity. Boring but critical.” Facebook will be around for a while longer because of the “barriers to exit” it’s created with the over 40 set. What this means is that Facebook owns most people’s social graph and it has taught most parents and grand parents how to post, comment and share. For this reason, it will take a pretty significant change to get these people to leave (privacy be damned!)
What do you think?

Facebook Fan: $136.38? $3.60 or $0.00?

I’ve had this post in my head for a while. And given the fact that many of my Twitter friends were complaining about Facebook being down yesterday, I figured that this was as good a time as any to write this post about the value of a fan on Facebook.

Judy Shapiro of AdAge did a nice job this summer of summarizing the findings from two independent studies conducted by Syncapse and Vitrue (more on those in a minute). And my friend, Augie Ray who is a senior analyst over at Forrester has written a blog post about this. His assertion is that a fan is worth zero. It’s a conversation with Augie about this topic that was the original impetus for this post. And believe it or not I completely agree with him.

Before my fellow marketers decide to take me out back and shoot me, I should probably offer a little additional information. First, I don’t really believe that a Facebook fan is worth $0. And neither does Augie. In fact, it’s what the fan can do for the brand that actually makes them valuable. Without getting into all sorts of facts, figures and methodologies, let me paint a picture for you.

I’m a huge Starbucks addict. My wife and I both drink one of their iced venti Americano’s at least five times a week. Maybe more. Up until recently, both of us were mayors of two different Starbucks on FourSquare (I no longer own mine) so every time we go to the store, we let our social networks know we’re there. In fact, if you asked a number of my friends what my drink of choice was, they’d be able to answer without even thinking about it. BUT… I’m already a fan of theirs whether I’ve “liked” them on Starbucks or not. And yes, there is an outside chance I would buy more stuff from them if they gave me additional offers. But probably not.

Iced venti Americano

So I am a valuable customer. And I buy a lot of coffee from them every year. But I don’t by more coffee from them because I “like” them on Facebook. This is the fundamental “chicken and egg” problem I have with Syncapse’s methodology that pegs a fan at an average worth of $136.38/fan. I’m not valuable because I spend more money with Starbucks (my Facebook fandom is a by-product of my passion for the brand). However, I think I am worth something to them because of my network i.e. 1,700 people that I’m connected to on Facebook and 14,000 on Twitter and my blog. Especially when you consider that a lot of the people I’m connected to are like me… they too have big networks.

The tricky part is, it’s hard to put a price tag on what I or my fellow enthusiasts are worth because it all depends on how good a job the “brand” does to activate us and ultimately get us to amplify their message (or share our own versions of their message). Some sites like Atlantis Resorts (a Powered client) has done a nice job of activating their customers and the results are not only a steady growth of fans but a CEO that is now such a believer in social media that he is blogging about it on USA Today. Others like Expedia (a natural for social media) has a mere 12,853 fans (only 11K+ more than yours truly) and very little engagement on their wall. Right now, Expedia isn’t working particularly hard to engage or activate it’s enthusiasts. Instead, it’s more focused on a broadcast strategy… one that has obviously impacted their fan acquisition.

In the spirit of being prescriptive, here are a few suggestions on what companies SHOULD do to engage and ultimately activate their enthusiasts:

  • Post educational content vs. informercials. This means teach people how to scrapbook or how to take better pictures instead of telling them how great your products are.
  • Run fun contests. Black Star Beer did a fabulous job of this by giving away a dream vacation that focused on experiences versus cash value. Even I signed up for this and I NEVER sign up for sweepstakes.
  • Ask people for suggestions. My wife’s company, GenConnect, did this and they got some amazing responses on their wall.
  • Have some fun! When Dunkin’ Donuts is NOT allowing soft core pornos to post on it’s wall, they are actually doing an amazing job getting their customers involved in submitting ideas for their dream donut and submitting photos that might get them recognized as the fan of the week on DD’s Facebook fan page.
How about you? What are you worth? And are the brands that you love tapping into your full potential?

Looking at the Future: Onstar’s Live On

It’s an OnStar kinda night at Stubbs — Austin, TX

Last night, I had the pleasure of attending a fabulous event at Stubb’s BBQ here in Austin. The host of the party was OnStar (a Powered client) and the purpose of the shin dig was to announce OnStar’s latest and greatest in mobile technology called Live On. Without getting into too much of a marketing pitch, the crux of what VP of Planning and business development at OnStar, Nick Pudar, walked us last night through focused on these four areas:

  1. Innovative technology
  2. 9th generation hardware
  3. Enhanced safety features
  4. New marketing campaign
Rewinding a little bit, I had a chance to try out some of OnStar’s technology a few months back when my colleague, Joe Jaffe, and I were in Detroit for the Future Midwest conference. Friend and director of social media at GM, Christopher Barger, was kind enough to lend us a Cadillac Escalade. In addition to it being a REALLY sweet ride, it was equipped with OnStar technology. What I loved about the technology (in addition to coveting the ability to remotely unlock my doors) was the fact that everything is done via voice. As someone that is married to their iPhone, I can tell you that I know how dangerous it is to try and text or tweet while driving. I also know how aggravating it is to not be able to enter an address into my GPS en route.

Joseph Jaffe, Powered and Christopher Barger, GM
Back to last night… what I like about OnStar’s thinking is that they are working hard to keep drivers safe on a lot of different fronts. Considering the fact that over 6,000 people died last year in texting or other smartphone related accidents — a number that’s destined to go up dramatically — allowing people to do the thing that they will inevitably do in a safer, smarter fashion makes a ton of sense to me. In fact, OnStar President, Chris Preuss said it best in yesterday’s announcement:
Giving our customers control of their vehicles with smart phone application technology is a key advantage of OnStar’s in-vehicle connectivity. This technology empowers drivers to make decisions about their travels well before they enter the vehicle,  meaning their full attention can stay where it needs to be – on the road ahead.

To that end, allowing for the ability to use your smartphone’s bluetooth capability to to perform text to voice OR using OnStar to be able to update your Facebook status (and listen to recent updates) is huge.

Inside a Chevy giving commands to Facebook via OnStar

The live updates coming from our car as we update from OnStar

On the “room for improvement” side of things, it does take a little doing to coordinate the Facebook updates. And once you do an update, it results in a voice >> text >> automated voice update on Facebook itself. However, this is OnStar’s first shot of the gate with this stuff so I imagine that the technology and capabilities will smooth out soon. I’m also envisioning that services like Twitter and location-based applications will be included in subsequent releases of this technology.

One other thing to note is the ability to go to OnStar’s site, enter in a location and then send it to your car is VERY cool and something that is a no-brainer. As I noted earlier, I can’t even tell you how many times I’ve gotten into my car, forgotten to enter my destination into the GPS and ended up having to pull over onto the side of the road.

So a big kudos to OnStar last night for pulling off a fun and informative evening (something they replicated across the country). Also, a great big thank you to my friend, Kameya Shows, who was kind enough to invite me to last night’s soiree. You can see other pictures from the event over on Flickr.

Simon Salt, Incslingers, Aaron Strout (that’s me) and Wayne Sutton, TriOut & OurHashTag