Foursquare Tests Customer Loyalty

Manufacturers that sell through retail outlets routinely purchase or access data about their customers’ buying choices at the store level. That practice, like every other one in the business world today, is becoming much more real-time. And, interestingly, the new normal will begin to chip away at the dominance of the middleman — the retailer — for manufacturers that normally don’t interact much with customers.

Retailer data services, such as Wal-Mart’s Retail Link, can give manufacturers and brand owners previously unheard-of insight into how their products perform on the shelves. But imagine knowing exactly who your customers are and where they are standing at this moment. Now imagine you can instantly deliver them incentives to buy your product. Sound like sci-fi? It’s happening now, and it will spread like a viral video of a singing dog.

The company Foursquare is one of the innovative, Web 2.0 players setting the stage for this reality. Foursquare members — a tally that stands at approximately 1 million — download the free application to their mobile device in order to broadcast their physical location to a select group of friends. Thus, if I visit Krispy Kreme for a donut or a bucket of donuts, everyone in my network will know it.

Customer management specialists and marketers of every stripe are drooling over this technology. Pepsi is out in front of the wave, firing off promotions for Pepsi products when Foursquare users come within range of outlets that carry them. It’s a new and intriguing phase in the beverage company’s loyalty program, and a New York Times article quotes Margery Schelling, chief marketing officer of PepsiCo Foodservice, as saying, “It gives us immediate feedback for what’s going on in the marketplace. That’s invaluable.” (Pepsi has used other innovative methods to reach customers.)

Of course, I think to myself, “Who the heck would want to broadcast his location?” The answer: people younger and more socially active than I am. This kind of openness will trickle through the population, first through the fascination of youth and then through the same kind of viral sprawl that drove Facebook from dorm rooms to suburbs, where moms and dads now routinely find themselves denied friend status by their children.

So, what if you make tools, for instance, and you could set up a system that knows a potential customer is near a Home Depot. Would you offer that customer a coupon on his mobile phone or would you shake your head and say, “Who would possibly want to use that?”

Your competitor will send the coupon.