I published a piece in MIT Technology Review today titled “How Companies Are Using Data from Foursquare.” It’s part of a month-long series on how data analysis technologies are helping companies better understand customer needs, and ultimately improve customer service and increase sales. Here’s an excerpt:
When Foursquare began, it was easy to wonder what the point was beyond the game. It asked people to “check in” when visiting places like shops, bars, or restaurants and then gave them a chance to compete for virtual prizes, like badges and recognition as “mayor” after visiting a place more than anyone else. Now, with more than nine million users, Foursquare is beginning to prove its value to businesses. It is becoming the rare social-media service that lets them directly analyze whether promotions lead to sales.
Take RadioShack, a company aiming to survive the price wars in consumer electronics by driving in-store sales. It first partnered with Foursquare last August to offer a 10 percent discount to anyone who checked in on a phone at one of its locations and 20 percent to any RadioShack “mayor.” By analyzing the resulting data, RadioShack found that Foursquare users generally spend 3.5 times as much as non-users per transaction. Also, they often buy wireless devices and accessories, products that lend themselves to repeat purchases.
I find it particularly exciting that after several years of experimenting with social media initiatives, marketers are now able prove a return on their efforts, and in language that comforts even traditionalists (read: $$). You can read the full story on the Technology Review website.