Foursquare has a plan for monetization. What is it? Two words, personalized coupons.
Foursquare CEO Dennis Crowley told the Wall Street Journal, “We are building software that’s able to drive new customers and repeat visitors to local businesses”.
Foursquare is in a unique position to pull this off. Unlike companies like Groupon and Living Social, Foursquare knows where you are at an exact point in time. Unlike the other coupon services that just know what city you’re in. Say for example that you’re checking in at Olive Garden for a fine family dinner. Might I recommend the Pork Milanese? When you check-in through Foursquare you could be pushed a coupon for a free dessert or appetizer. This could really drive Foursquare’s usage through the roof.
Currently Foursquare uses gamification tactics to entice you to check-in. These strategies are supposed to be a boost to your online ego, but they don’t appeal to everyone. Many people call Foursquare creepy, and don’t want their locations pushed out across various social networks. Would those same people start checking in if Foursquare gave them coupons? Perhaps the Mayor of Olive Garden always gets free salad and breadsticks? I’m not sure, but I think it a good tactic for them to pursue. In just a short time, companies like Instagram have already surpassed Foursquare’s user base. Now, obviously location sharing and photo sharing are fundamentally different models, but it has to make Foursquare nervous.
If there is one company who can make another coupon model work, it’s Foursquare. Hopefully by coming into the game a bit later they have learned from some of the mistakes Groupon has made.