A recent report from BI Intelligence has analyzed precisely what location based services such as Foursquare are actually all about — and if they can be a genuine business.
The report from BI Intelligence has taken a look at just how leaders in the space are going about attempting to create sustainable and large-scale business models by examining precisely how and why the hugely successful Foursquare is succeeding. There are a number of methods being used by Foursquare, including analytics and yield management, customer loyalty, search and discovery and deals.
The Vice President and Head of Business Development for Foursquare, Holger Luedorf, told BI Intelligence that Foursquare intends to monetize the “merchant dashboard” which it presently offers to as many as 500,000 registered members. This is actually a massive opportunity due to the fact that local merchants have high fixed costs, with the dashboard allowing merchants to be able to run specials, claim their venue and access a great deal of other information as to how their customers are interacting with their business in real time.
Foursquare is also intending to replace “a digital version of a stamp card”, which is where check-in specials come in. Furthermore, Foursquare is presently partnering with such brands as Bravo and the New York Times in order to create branded content and badges linked to the check-in achievements of users. Because of the fact that it is effectively operating loyalty rewards programs for other firms it should be able to go about monetizing these partnerships.
A year ago Foursquare added the Explore feature in order to allow users to search neighborhoods and to be able to garner recommendations for local businesses, a clear challenge to the local reviews site Yelp and even to Google, but also a move to try to increase user engagement away from their phones.
Foursquare has also partnered with a variety of daily deal sites over the course of the past year in order to offer real-time location-based deals, as well as inking a deal with American Express to allow users access to location-based deals via their American Express card.