BII REPORT: How Startups Like Foursquare Are Trying To Make Money


Location-based services get a lot of hype, However, many people wonder what location-based services are really about, and whether they can be a real business. 

In a recent reportBI Intelligence analyses just that, taking a look at how leaders in the space are trying to create large and sustainable business models.

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So, how is Foursquare trying to do it?

  • Analytics and Yield management: Holger Luedorf, Foursquare VP and head of Business Development, told BI Intelligence that Foursquare plans on monetizing the “merchant dashboard” that it currently offers to some 500,000 registered merchants. The dashboard allows merchants to claim their venue, run specials, and access a host of other data about how customers interact with their business in real-time.
  • Customer loyalty: Foursquare wants to be “a digital version of a stamp card.” This is where check-in specials come in: Free drinks for the mayor or for the nth check-in. Foursquare also currently partners with brands like The New York Times and Bravo to produce branded badges and content linked to users’ check-in achievements. It should be able to monetise these partnerships because it is essentially running loyalty rewards programs for other companies.
  • Search and Discovery: Foursquare added the Explore feature a year ago to let users search neighborhoods and garner recommendations for nearby businesses. This is a clear challenge to local reviews site Yelp and even Google, but also an attempt to increase user engagement off their phones. 
  • Deals: Foursquare has partnered with a number of daily deal sites over the past year to provide real-time location-based deals. It also inked a deal with American Express that lets users access location-based deals using their AmEx card.

 In full, the report:

  • Presents an overview through explainers of the most interesting location-based services including Foursquare, Shopkick and Groupon Now.
  • analyses case studies of promising business use of these platforms, including examples from Sports Authority, RadioShack and Neiman Marcus.
  • Outlines the big business opportunities for location-based services, such as driving people in stores and increasing consumer loyalty.
  • Lists the challenges to location-based services, such as end-user adoption and reaching small businesses.

For full access to the report, sign up for a free trial subscription to BI Intelligence today.

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