Foursquare Is Growing: Use It for Your Business

Geolocation service Foursquare is on the rise. Founded in 2009, by this week it has registered over a half million merchants, after counting 10 million users in June. Foursquare is trying to define itself as a standalone social media platform. This seems to be working; even in the face of Facebook Places and Google Places, the company continues to grow.

The service entices users with playful incentives to check in to locations–usually local businesses–using badges to indicate the frequency of visits and assigning “mayor” status to a site’s top visitor in a given day. Using Foursquare can be simply fun, but it can also earn customers discounts and freebies.

In addition, the opportunity for small and medium sized businesses without huge marketing budgets to sign up is especially compelling. Using Foursquare has these distinct advantages over other social networking marketing:

1. It Reaches Real Customers

Though it’s easier to round up hundreds of followers or “Likes” on Twitter and Facebook, as compared to check-ins on Foursquare, only a tiny fraction of your Twitter and Facebook followers will convert to paying customers, while most everyone who checks into a location using Foursquare will make a purchase.

2. It’s Hyper-local

Sure, you can sign up for Groupon or another mass email service and draw folks from all over your state, but chances are those customers aren’t going to become regulars. A Foursquare promotion–like a free coffee with a sandwich–is more likely to attract those already in the neighborhood, as well as to foster a feeling of appreciation and reward from those already planning to frequent the business.

3. It’s Playful

Foursquare had to build its 10 million users from the ground up. It didn’t have the advantages of rolling out a location-based service on an existing social network such as Facebook. They did this by building the service around games–offering the option to scramble to become mayor of a location, for example. This lends itself well to businesses offering deals through the service. A company may offer a free burrito to the “mayor” of a location each day, crowning the user the “burrito king.” So while businesses can offer check-in based deals through Facebook Places, only Foursquare offers the level of playfulness many users want to interact with.

Among other news, Foursquare in June announced a partnership with American Express, which will allow users to load discounts and freebies to their AmEx credit card when they check in to certain locations. In addition, its new notifications appear with any new activity, rather than only when you check in manually to a new location. This is an attempt to provide users an incentive to return to Foursquare more frequently rather than checking in and forgetting about it.

Finally, although its recent milestones are impressive, Foursquare actually maintains a much bigger reach through integration with Facebook and Twitter. And while its new notification system is an attempt to define Foursquare as a standalone platform, the company isn’t foolish enough to break ties with larger social media siblings.

On the contrary, Foursquare will seek new ways to embed with these platforms as it grows–the way it notifies Facebook friends who join Foursquare. This is all good news for small businesses, which can leverage the game-based location service, while their actions also spread across the larger social platforms.