How Local Restaurants and Retailers Benefit from Location Based Services (LBS)

Nov 5, 2012 | Marketing, Public relations, Social media, Social Networking

Location based services appsOne thing I relish about my book club is discovering new restaurants. Book club members never disappoint with their selections. So when I arrived at a cafe for our meeting, I checked in on Foursquare, which is a location-based service (LBS). Those of us who use such services get a thrill out of checking in, especially new places.

And the excitement doubled when Foursquare announced I had unlocked a newbie special! It was for a free order of beignets. The last time I had the fried pastry was when I visited New Orleans over a decade ago. Naturally, I jumped at the offer.

I know I’m not alone in enjoying checking in and unearthing surprises like these. The enthusiasm isn’t just about the specials, but also reading and acting on other people’s tips. Location-based services give restaurants and retail stores a fun way to get more repeat customers. Think of the experience as playing a game filled with good surprises. You never know what you will get when you check in.

Location-based apps take advantage of the GPS technology on smartphones to identify your location. In case this worries you, take comfort in knowing that no application may track your whereabouts without your permission. It’s not required to check in everywhere you go. You control when you want to check in.

When you open an LBS app, it pinpoints your location and displays a list of nearby places. Tap wherever you are and you’re checked in. Add a comment, photo or tip to help your network learn more about the place or neighborhood.

Location-based services growing

As of February 2012, Pew Internet & American Life Project reported that 74 percent of smartphone owners use their phone for location-based information, up from 55 percent in May 2011. The growth is incredible considering only 4 percent of online Americans used location-based services in 2010.

The report also found that 18 percent use geosocial services in which smartphone owners use a service like Foursquare or Yelp to “check in” or share a location with friends. To clarify the difference between geosocial and location-based services, Pew Internet & American Life Project defines location-based information to mean getting directions, recommendations and other details based on a user’s current location.

Benefits of LBS

It’s hard to ignore these numbers as these services provide free word-of-mouth. At their Dreamforce 2012 session, Marketo’s Jon Miller and Copyblogger’s Brian Clark reported that 92 percent of us trust what our friends have to say in social. Your customers can leave tips and reviews that their friends will see when they show up nearby. And that could be your business they’re talking about.

Furthermore, businesses that offer specials motivate customers to visit more often. Just like any game, geolocation apps also bring out customers’ competitive sides as they try to top each other.

It doesn’t cost anything to have a profile on these services. Should you decide to run specials, you’ll need to create a strategy and a plan to ensure you have a successful local marketing program, or else you risk disappointing customers.

When I went to that cafe, one of the employees didn’t honor the special. I found the manager and he had six piping hot beignets delivered to my table. Yes, they lived up to their reputation as several people recommended the cafe’s beignets in Foursquare.

How do you use location based services? Do you use it in your business or you check in? What do you like about it?

Who else should read this? Please share!

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