Should you play it safe with location-based social networks?
Last week Forrester released a report advising most marketers wait to use location-based social networks (LBSN) as only 4% of the US population is currently using platforms such as Foursquare (the current market leader), and that the networks skew heavily male. They advise that brands that target young males experiment with the services and other brands adopt a “wait and see” approach.
I couldn’t disagree more. Here are my 5 reasons why it’s smart to start experimenting now.
1. First Movers.
There’s something to be said for getting a head start on your competition in the digital space. Brands like Starbucks, Dell, Pepsi, and Nike have all taken advantage of the emerging channels and reaped the rewards of building a strong early foundation with consumers.
While you should not rush into a new tool without understanding your strategic goals and how it integrates with your business objectives, experimenting with emerging technologies that are opt-in and potentially have a direct customer impact is smart.
When Facebook opened their gates to the general population in 2006 they had a small user base of university students. Four years later they are a behemoth. Twitter adoption rates have been increasing exponentially year over year since their launch in 2007 and the tool is now considered a “must use” for social business. Considering Foursquare launched about a year ago, can we expect to see the same type of growth curve as the early adopters begin to influence the early majority? (see “Crossing the Chasm” adoption curve)
2. Google. Facebook. Oh My.
Location-based services are not limited to the current apps we have been hearing about. Facebook has expressed they will add a location-based offering soon, Twitter has added “Tweet with your location” to their service, and the biggest news is that Google is adding a Places API to their eco-system, as well as adding LB data extensions to their mobile advertising product.
LBSN will become mainstream sooner rather than later, and it will be the big players, not the niche networks that will drive the adoption. Testing and learning now, before it becomes ubiquitous should be something on every marketers radar.
3. Data and utility.
There is an enormous amount of insightful and actionable data that can be gleaned about your customers and prospects from mobile & LBSNs. Eventually this data could be used to inform inventory control, staffing levels, consumer tastes and trends, etc. The data can also be used in loyalty programs, to identify influencers, test new products, and as real-time service focus groups.
Companies already testing the waters include:
4. Sales, Coupons, Offers, and more.
Part of the Forrester analysis identified that mobile couponing is widely successful with the users currently using the services, which is interesting as the base is primarily young males, not the average coupon-consuming demographic. Gone are the days of clipping coupons in the Sunday paper, now you can serve relevant offers and drive foot traffic and purchase directly to a mobile device. These offers are opt-in, and contextually relevant, not SMS spam. Testing offers, tips, and messaging via mobile should be on every retailers plan for the next year.
Of course one size doesn’t fit all and ensuring that your product or service fits within the make-up of the demographic, depending on service (existing or branded), is a must.
5. Mobile usage.
Of course mobile, and specifically smartphone, usage is soaring year over year. Ignoring mobile at this point is like ignoring the Internet in 2002 because broadband wasn’t prevalent yet.
Bottom line for marketers:
Experiment. See what fits, what your customers are looking for, and where you can add value. Don’t wait until it becomes mainstream, because that will be sooner than you think and you’ll be playing catch-up.
[cross-posted from Teehan+Lax]