Posts Tagged ‘Starbucks’

4 Things I Just Learned About Location-Based Marketing

by on Tuesday, October 5th, 2010

As someone who enjoys – but doesn’t completely get – Foursquare and other “check-in” services on the Web, I was looking forward to the Location-Based Marketing Summit I attended last week in New York. I learned a great deal about this rapidly-growing field, and I had the chance to hear and speak with some of the people who are responsible for the latest thinking and most interesting developments in location-based services (LBS) and their application to marketing. Here are some of the things I learned at the conference:

via jorgempf (Creative Commons)

Check-in is only the beginning. Services such as Foursquare and Gowalla have received so much publicity lately that it’s easy to equate LBS with check-in. But LBS also includes maps and other query-based services (imagine wandering through a museum and using your mobile device to learn about the painting you’re standing in front of) and a variety of shopping platforms (mostly deals and discounts but also several loyalty platforms) as well as socially oriented services like Foursquare. What can LBS do for marketers? At least three things:

  • Grow loyalty. Some marketers, such as Tasti-D-Lite, are using LBS as a loyalty platform, where a purchase results in an automatic “check in” and a message to friends as well as an award of loyalty points. A new service called TopGuest drives enrollment in hotel loyalty programs by offering bonus points when a guest checks in (in the LBS sense).
  • Increase relevance. Adding time and place to any information increases its relevance. And almost any kind of information can be made more valuable by adding relevance. Location data can tell marketers about what people like to do and to buy, and when and where they like to do it. It can place consumer behavior in context: Is going to Starbucks after the gym the same as going there on the way to work? Is going to Starbucks because it’s convenient the same as going there because you like it? With more detailed and relevant information about the consumer, marketers can create messages and offers that are much more relevant to the consumer – and more likely to be acted on.
  • Provide data. Marketers also can use aggregated location data to make better decisions. Comcast, which uses Twitter as a customer service channel, has been mapping tweets as a way to learn where service resources are needed most and communicate with customers in those areas. Location data can also be used to map patterns of customer behavior, from which bars attract fans of what teams to which doctors are prescribing what medications.

Engagement is everything. The hype about check-in services has obscured the wide variety of location-based services that are already available. The common denominator among them is engagement. How can LBS create engagement? One way is to deliver relevant information delivered in real time. Or, as one speaker called it, earning attention by being in “the right place, right time, all the time.” Another source of engagement is providing an enjoyable experience, such as by including game mechanics. On a superficial level this is how the check-in services work. But the real value of these services is relevance: for avid users, where their friends are and what they are doing right now matters. Another way to create engagement is financial: location-based shopping services that provide deals and discounts certainly have an audience.

Local is next. It’s easy to think of LBS as the province of large marketers, and it’s true that large marketers are better able than small ones to take the risk of jumping into LBS early. However, many of the speakers (and attendees) at the conference were talking about local applications. Why? One reason may be that, according to Google, one-third of mobile searches and 20% of all searches have local intent. That’s a big audience to overlook, and with the cost of technology decreasing, local marketers have a chance to engage with them using a location-based platform. Although local use of LBS is still in its early stages – for one thing, awareness of and interest in LBS is thought to be low among local marketers – look for substantial growth in this sector. And look for Zavee to be right in the middle of things.

Privacy is a transaction. This was one of the most eye-opening insights of the entire conference. No speaker disagreed that consumer privacy concerns were a legitimate issue for LBS and the marketers who use them. Several speakers, for example, were critical of Facebook for being insufficiently sensitive to users’ privacy concerns. But every speaker who discussed privacy at any length made the same point: While a service that exists only to push marketing messages will always have a privacy problem with consumers, a service that delivers a genuine benefit will find consumers more likely to share private information. The greater the benefit, the greater the sharing. This only works, of course, if consumers know what they are being asked to share – a potential issue with some advertising programs. All of the speakers at this conference, however, emphasized the need for LBS to be transparently opt-in with an easy way to opt back out. It will be very interesting to see, over the next several years, whether this transactional notion of privacy reflects consumer behavior or whether there are certain bright lines that no LBS can safely cross.

This has been a busy few weeks but our conference-going isn’t over: Zavee CEO Alan Pleskow and I are off to California for the Rise of Social Commerce Conference in Palo Alto – expect a post about it next week.

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Do You “Like” Me? Do You Really “Like” Me?

by on Tuesday, June 1st, 2010

Remember Sally Fields’ famous acceptance speech at the 1985 Oscars? “You like me! You really like me!”  But what if we didn’t mean it?

One of the recent changes to Facebook has been a great expansion of the “Like” concept which, among other things, replaces the “Fan” concept.  Yelp and other social networks have followed suit.  At least for now, Zavee is still inviting shoppers to become “Fans” of merchants they haven’t yet shopped at and not just “Like” them.  Why?  Because we think that, on some perhaps subtle level, being a “Fan” implies a higher degree of emotional engagement than merely “Liking” someone or something.  How substantial is that difference? It’s hard to tell.  If you follow sports you might agree that there is a difference between liking a team and being a fan.  If you follow the New York Mets or the Miami Dolphins you almost certainly do.  At Zavee we are considering changing the “Fan” concept to something completely different – something that retains a high level of engagement but provides greater flexibility.  More news to follow on that new feature.

One thing we didn’t think about when we were debating “Fan” versus “Like” was whether a lower level of engagement might make it easier for users to be less than candid about what they say they “Like”.  Would people really do this?  And why?

Starbucks Barista Badge from Foursquare (via pbende)

No less a social media authority than Robert Scoble says they would, and do.  In fact, he says that he has done that very thing.  Why?  Scoble says that it comes down to a fundamental truth about human nature: we present ourselves as we want others to see us.  Since the pages, users and merchants we “like” become part of our public social persona, we can change that persona by changing what we say we “like”.  If our tastes run to country bands and donut shops, but we’d rather be thought of as someone who prefers singer-songwriters and vegan restaurants, our “likes” can reflect that.


Is this a problem for smaller businesses? It might be. For one thing, advertisers tend to take us at our word.  Check in frequently enough at Starbucks and you can win a discount off your coffee.  Starbucks can’t tell whether you like the coffee, just how often you showed up.  Clicking the Like button on Yelp for a bunch of restaurants gives rise to inferences about your preferences and behavior, and advertisers will target you accordingly. Providing a misleading social persona is just a waste of time for both advertiser and user, unless it’s being done as a form of protest against behavioral targeting.

Like much about social media, behavioral targeting presents legitimate privacy issues, and they need to be worked out. However, if advertisers lose faith in the accuracy of consumers’ self-descriptions the effectiveness of social media for marketers is likely to decrease. For small marketers who are drawn to social media marketing by, among other things, its low cost and high effectiveness, this could be a very unfortunate result.

It’s probably true, as Scoble says, that advertisers have ways to verify, at least in part, the accuracy of the things we claim we like.  But the deeper point is that the value of social media as a communications tool for users in the network depends in large part on the credibility of other users.  A user who creates a false or misleading social persona may only lose personal credibility within the network, but if enough users do the same thing the credibility of the network as a whole may suffer. A recent paper about dating sites reports that deception in profiles is rampant. The paper suggests that one reason is that users understand what makes them desirable to potential mates, and create profiles to reflect those expectations. Dating sites like to advertise their successes, but they may have become just one more system to game.

Whether Zavee stays with “Fan”, changes to “Like” or goes in a different direction altogether, the principal means by which Zavee shoppers communicate the quality of their shopping experience is by writing reviews. It takes more effort (and commitment) to write a review than to click on a button, but that very fact gives proportionately more weight to the reviews and less to a simple “Fan” designation. One safeguard we put in place expressly to improve the accuracy, timeliness and fairness of reviews is for the system to accept a review of a merchant only if the reviewer has made a Zavee purchase at that merchant within 30 days.

We hope that social networks and their users develop means to limit the influence of false social personsas, not to protect advertisers but to protect the networks themselves and to permit them to continue to deliver valuable, relevant experiences to their users.

The Zavee takeaway:

  • Once it becomes trivially easy to create a social persona, that persona may itself become trivial. The problem is that those personas are taken seriously, both by advertisers and by other users.
  • It’s natural to present ourselves as we’d like to be seen, but invented personas can make the the network as a whole less valuable to users who rely on other users for timely and accurate information and opinions.
  • Local businesses will suffer disproportionately if social media marketing loses credibility, because it’s a particularly attractive tool for them in an environment where conventional alternatives aren’t nearly as cost-effective.

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Checking Out Checking In

by on Tuesday, May 4th, 2010

Have you checked in yet?

Foursquare @SXSW

Foursquare @SXSW

Location-based social networks such as Foursquare and Gowalla make use of the GPS capabilities of smartphones to let users communicate in real time not just what they are doing, as with Twitter, but where they are. They are growing rapidly, and for businesses they are well worth checking out.

Both networks are about two years old but have entered the mainstream only recently. Users of Foursquare “check in” at different locations to tell their friends where they are and what they are doing. Foursquare also has an element of game play that lets users collect “badges” for certain activities, such as earning a “barista” badge for checking into five Starbucks. Foursquare has a large user base that skews young and lives in cities, and has attracted a certain amount of backlash (note: strong language at link), although it has its defenders. Gowalla doesn’t depend quite as much on its game mechanics, but supports media files, such as photos, and claims to be looking for a broader (and perhaps older) demographic.

Businesses seem to have less of a “wait and see” attitude toward location-based social networks than they did toward Facebook and Twitter. It may be that, having been through this before with other Social Media outlets they simply need less persuading when it comes to location-based networks. It may also be that the business case for location-based networks is more obvious than with, say, Twitter. Another possibility is that the networks themselves have become business-friendly faster. Foursquare already has the ability to serve merchant offers based on location, although it is still refining its analytics dashboard. In any event, marketers are not sitting on the sidelines. Recently, Pepsico announced a “geo-based loyalty program” in partnership with Foursquare that will reward consumers who check in via iPhone at businesses that serve Pepsi products. The History Channel also is using Foursquare to promote its show, “America, The Story of Us.”

Do networks like Foursquare and Gowalla have relevance for small businesses? We think they do. Even basic data on who has visited a business, how frequently, etc. adds to the merchant’s knowledge of the customer base. Serving offers and other content to those customers has obvious benefits, although it still isn’t clear how the merchant can get a full picture of the return on investment from that content (merchants will know how many people used (and, presumably, saw) the offer, but won’t necessarily know how many of those transactions were made by customers who would have purchased anyway). Checking in to a business from a location-based network also can provide extended word of mouth for the merchant. It’s going to take time to figure out how to use these services for business, but that was true with Facebook and Twitter. And, as with Facebook and Twitter, there is a lot of potential and no real downside for businesses that experiment.

At Zavee we are currently exploring the fit with location-based networks, but we fully anticipate using this technology to add value to the Zavee experience for both merchants and shoppers. With both cash back offers by merchants and reviews by shoppers, Zavee provides a great deal of content whose value can only be enhanced by becoming location-aware.

The Zavee takeaway:

  • You heard it about Facebook, you heard it about Twitter. Well, location-based social networks aren’t fads either.
  • Businesses have wised up and caught up, and are right on the heels of consumers in discovering how to make these services useful, relevant and rewarding.
  • If you were sitting on the sidelines while Facebook and Twitter were becoming huge, don’t let it happen again!

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