Mark West of Monique's Chocolates in Palo Alto, Calif., says the truffle giveaway he offered on the Foursquare service attracted about 60 customers, about one-third of whom became regulars.
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Chamin Mills has found a new way to give customers a poke. Ms. Mills manages social media for Pacific Catch, a chain of three seafood restaurants in the Bay Area.
A few months ago, the restaurant, a fan of social media like Twitter and Facebook, adopted Foursquare, the geolocation service that allows customers to get special offers and earn badges by "checking in" to certain sites.
When people used the Foursquare application within a few blocks of the restaurant, an offer popped up on their cell phones: Check in five times and earn a free Hawaiian poke. Since then, more than 1,400 people have checked in more than 2,800 times.
Geolocation services have become an important marketing tool for small businesses, especially those depending on customer traffic like restaurants, retailers, and bars. The growing importance of the services, which exploit communication networks to pinpoint the location of smart phones and other devices, is underscored by the introduction of Facebook Places, which allows users of the Facebook mobile application to check into locations and share their whereabouts.
Foursquare, which claims about 3 million users and more than 1 million check-ins daily, has emerged as the leading geolocation service for business.
Foursquare, one of several geolocation services, helped a Bay Area restaurant chain reward cell-phone users for checking in.
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Similar services include Gowalla, Loopt, Whrrl, Brightkite, Booyah, Where, and Scvngr. Along with Facebook, more established players like Twitter, Yelp, and even Google are adding location-based functions. This guide, based on experiences of small-business owners, provides tips primarily for using Foursquare, but many of the pointers apply to other services.
The first step is to claim your business listing. See if your business is already listed on Foursquare at foursquare.com/search. If not, add it.
Businesses can link their Foursquare pages to their Twitter feeds and Facebook pages. Add buttons so customers can put the venue on their Foursquare to-do list.
The next step is to establish goals. Do you want to attract new customers? Retain existing ones? Obtain better data about your clientele? Do you simply want to establish an online social network? Or all of the above?
Many businesses use Foursquare as a digital replacement for coupons or loyalty cards.
These services are free for now.
Businesses can offer deals by going to the "manage specials" section on their venue page.
Mark West used Foursquare to entice customers with a sweet offer from his Monique's Chocolates in Palo Alto, Calif.. Like many small businesses, reaching a narrow demographic - chocolate lovers who live within a few miles - is tricky.
Mr. West bought a $360 ad in the local paper for Valentine's Day but that attracted only about five customers, and a $300 ad in a local magazine drew only one.
Mr. West offered a promotion on Foursquare: Buy one truffle and get one free. The promotion cost just the free truffles and attracted about 60 customers, about one-third of whom are regulars.
"My key is to get you here to try something," he said. "I feel that if you like chocolate you'll be back."
Beneath the technology, location-based services are fundamentally social networks. For example, Pacific Catch hosted a party that allowed customers to earn a Foursquare "swarm badge," which is awarded for gathering with 50 other Foursquare users.
Foursquare gives firms an analytics dashboard with data about check-ins and customer demographics.
The Destination Bar in New York City uses this analytic dashboard to glean data about customers, like how they break down by gender, when they check in, and with whom. Recently, the managers noticed that check-ins fell off after 2 a.m. on Saturdays.
So the bar started a late-night happy hour - spreading the word through social media. A rise in check-ins and sales followed.
"I look at the Foursquare check-ins as a representation, like the Nielsen ratings," Dan Maccarone, a bar partner, said.