How Local Businesses Can Benefit From Mobile Social Networks

Local Businesses Can Benefit From Mobile Social Networks
The nearly mainstream social web is now evolving and graduating to mobile devices.  This emerging space of mobile-based social networks are empowering customers to find the best venues and prices, and offering savvy companies unique ways to cater to this new medium.  Yet, despite the emergence of applications like FourSquare, Yelp, and recently launched GoWalla, there are risks as customers talk directly to each other and opportunities for businesses who harness the tools.  Local businesses should approach the mobile social networking space by first listening to their customers, responding to commenters, provide special offers to advocates, and prepare for pricing to be impacted.

Mobile Social Network Offers Discounts Based On Location
Using FourSquare, a location based social network, I ‘checked in’ to the movie theatre indicator to my friends my location.  Immediately after the application identified my approximate location it offered a ‘special nearby’ which I clicked.  The Savvy Cellar Wine Bar offered me 50% off a wine flight to a store 2 blocks away. Using both my general location using 3GS on the iPhone and my explicit checkin to the location, it was able to serve up advertisements based on my physical location.  We should expect FourSquare to evolve and eventually offer advertisements based on your friends interests “John, Amy, and Allen all like Los Taqaritors, invite them now for a 20% off discount”.  Location based ads will soon connect with social information.

Catering To “Top” Customers Spur Word Of Mouth
The opportunities aren’t just focused on location based, but also provide opportunity for developing an unpaid army of advocates.  Take for example Foursquare’s point system, those who ‘check in’ the most to a location can become the ‘mayor’ of their particular store, indicating they’re the top customer.  Some savvy restaurants provide free drinks or other services to the mayor, who will continue to spread their affinity for a restaurant using social networks.   A few weeks ago, I spent time with Yelp’s marketing team and their community manager Connie who oversees many of the community facing events.  I learned that many local restaurants cater to Yelp Elite, and will likely provide them with quality service above and beyond, in fact, Yelp has launched a program for restaurants to offer a prix fixe menus for Yelp users. Expect to see Yelp’s mobile application advertise these special deals for Yelpers as they search for restaurants online using mobile devices.

Empowered Customers Check Prices In Real Time –Impacting Buying Behavior
Even if you don’t have a physical store, but offer a consumer good, consider RedLaser, which is a real-time bar code scanner that allows any phone to scan UPC codes and find them cheaper online.  This means that retailers with higher priced products may miss out as consumers can quickly buy it from a competitive store down the street or find it online.  If this trend continues, manufactures may shift their supply away from high-priced retailers to compensate for the change in demand.  (Thanks Andrew Hyde for the tip)

Innovative Market Dependent On Adoption
Despite the innovation, location based marketing and advertising has its limitations as it’s dependent on: total number of consumers with mobile devices, adoption of mobile social networks, and their desire to find location-based offers.

Key Takeaways For Local Businesses:
Local businesses should approach these mobile social networks in a four part strategy –not simply reacting without a plan.  Companies should approach this space by:

  • Listening In For Free Research. Local businesses should immediatly montior their brands on mobile social networks like Yelp and FourSquare.  Use this information as free research: find out the perception of customers opinions both good –and bad to learn about their market.
  • Responding To Reviewers. Use negative information as a way to improve products and services and let your community know you’re listening to their feedback.  Although there are always two-sides to any complaint use these same tools to respond to customers in public, but be sure to abide by the terms of service.
  • Rewarding Top Customers.  Customers that frequently patron your store and tell others on these mobile social networks should be rewarded.  Build both in person and online relationships with them so they’ll continue to advertise and market on your behalf.  Free drinks anyone?
  • Preparing for pricing impacts and positioning.  With disruptive tools like RedLaser appearing, customers can quickly find pricing of products and find them at nearby retailers.  Retailers like CVS, Walmart, Target, BestBuy, Safeway should take heed as consumers continue to become empowered through instant information.  Companies will need to respond by:  making product pricing more competitive, or offering other deals such as bundling, speed, time, or other value-based offerings.

Update: Here’s some screenshots, I learned how to take screenshots with your iPhone by holding the main button and power button.

photo photo