Our Thoughts

Checking In is the new Loyalty

August 29, 2010 by Nathaniel Flick

Back in the days before the mobile internet, an outing to the shops or the pub was planned ahead of time. But now I have Location-Based Services like Foursquare, Twitter, Groupon and GroupTabs, and mobile phones are everpresent, there’s no longer any need to plan, just show up where the bargain is, and get in on the action. Your friends are doing it and doing it in droves.

This current trend is based on the flash-mobs in the early part of this decade, random gatherings that materialised out of nowhere without a monetary goal. They existed solely to bring people together to do silly things but they lasted a short time and ended as quickly as they began.

Checkins are flash mobs plus profit. A serious business model being leveraged by serious players offering serious discounts to loyal members with the end result being the antidote to the recession and ultimately the business-model of the future.

Checkins are all about keeping customer loyalty. This loyalty is the only real product of value left now that everything is reduced to a commodity and customer attention is divided amongst 1,000 interesting things at any given moment.

Seth Godin says the same in a recent blog post: “Given that expectation and trust are just about all we have left to sell…”.

Keep in mind the examples I’m going to cite are in the States so they don’t apply so much here in New Zealand yet, but they are rolling out world-wide soon. They are relevant because they apply anywhere there’s wireless internet.

For example:

If you are headed to a bar check into GroupTabs first. Bars offer specials and through this service can give their customers immediate discounts lasting for a limited time to draw their attention. Bring a friend, boost the numbers to a certain level and save even more.

Groupon is a similar idea but they smashed sales records with their nationwide Gap deal bringing in more than $11 Million with their one-deal-per-day system focused on them.Talk about creating scarcity – you have Groupon users primed for deals but there’s only one per day so they KNOW it’s going to be good. The Gap isn’t complaining!

Foursquare is even more interesting and it’s effect on how retail works will be the longest lasting. Let’s face it, drunk people forget deals pretty quickly but shopping is forever. Anyway, the Gap and Ann Taylor have offered 25% off deals for checking in on Foursquare. Foursquare reenforces this behavior by sending stickers to participating stores to reenforce the deal.

Foursquare makes these sales more proactive and spontaneous while also allowing stores to advertise more cheaply while giving them valuable customer data. Never has it been easier to get this data and it’s scary how powerful this is. Checkins means more concrete sales numbers and allows them to draw direct cause and effect between their marketing spend and sales profits. Businesses have been wanting this for a long time.

I think this whole Checkin craze is changing the way we shop. Now it’s not so much what I, the customer, want, it’s who has the best deal and how fast can I get there to take advantage of it. Where are my friends? What are they buying? Instant mystique. Instant traceability.

Loyalty will lie in the deal, not in the brand at first. But the companies that rise to the top of the heap in this checkin market will balance these two in a powerful message spread by social media and word-of-mouth. Advertising will be checkin sales. Marketing will become answering the question, who wants this deal and what network are they on; how can we reach them?

Checkins makes all of this traceable – even predictable, and loyalty is king.

Facebook even wants to patent the phrase, “checkin”! That’s how important checkins are now. This space is heating up and fast and it’s barely begun. I imagine this is how we will buy goods and services from now on. Businesses will fall who don’t get in on this game early.

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Tags: checkins, facebook, flash mob, Foursquare, Groupon, GroupTabs, location-based services, loyalty, seth godin, twitter

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