The Hostway Blog

Where 2.0

Location-aware mobile applications are the newest mobile technology phenomenon. The latest wave of mobile phones including the iPhone have GPS capabilities allowing developers to tailor applications for those devices. Early adopters of such technology have taken to applications like Loopt, Foursquare and Gowalla. This presents a unique opportunity for businesses to advertise and offer extra incentives to customers who frequent their locations.

How it Works

Geolocation applications allow users to "check-in" to locations such as parks, landmarks or businesses based on where their device is located. These check-ins are published on the application like status updates on Facebook and can be viewed by friends and followers of the user. Most applications can automatically publish these check-ins to other social networking sites like Twitter and Facebook.

Explore Chicago, the city's tourist resource Web site, offers an enhanced look at the city for tourists using Foursquare. When users check in to landmarks like Wrigley Field, they can unlock local badges like the "Chicago Blues" badge. Users can also discover and leave tips about places around the city for others to find.

Advertising and Loyalty Programs

Tasti D-Lite, a New York-based ice cream company, is arguably one of the first businesses to utilize geolocation technology as a customer incentive program. In addition to a traditional physical rewards card, customers can link their Facebook, Twitter and Foursquare accounts to their rewards account. When customers use their rewards card, their social networking statuses are automatically updated, and they earn extra rewards points.

Not only does this program allow Tasti D-Lite to to advertise to the customer's social network, but it also promotes customer loyalty through incentive programs. Other businesses have also been using Foursquare to encourage customer loyalty by offering free drinks or meals to "mayors" of the location. A mayor is the Foursquare user who checks in at a particular location the most.

The Austin-developed application Gowalla offered similar rewards during the South by Southwest Festival 2010. When users checked in at certain panels or locations during the festival, they earned digital badges or picked up digital items that could be traded in for physical items such as a free taco from a local taco truck that had partnered with Gowalla. Knowing where your frequent customers also check-in can be a valuable analytic when considering business partnerships.

Issues with Geolocation Tools

The issue with location-aware technology is the inherent lack of privacy within these applications. Other social networking platforms including Twitter are incorporating location-tagging functionality. Currently, these features are only available to users who opt-in. Users can still tweet without appending their locations to their tweets.

Users still have to approve friends and followers so there is some control over who can see particular updates. Despite this, geolocation incentives will only reach a fraction of a business' customer base.