How to Harness the Power of Foursquare

Check-ins, mayors, badges—these words are important to the millions of people who use Foursquare, and as more people join, these words have been grabbing the attention of a growing number of businesses as well. The challenge is figuring out how to make Foursquare work for a company's particular needs. In his new book, "The Power of Foursquare," journalist and communications expert Carmine Gallo reveals several keys to unlocking Foursquare's business potential. Associate Editor Judith Aquino caught up with Gallo and asked him to share his findings.

CRM: Why should companies care about Foursquare?

Carmine Gallo: Foursquare is a location-based social media tool. People download the free app to their smartphones and use it to "check in" at venues like restaurants, stores, bars, and gyms. They can then tell their friends where they are by sharing that check-in info. Foursquare also has a game element that allows users to earn badges and mayorships by checking in frequently.

Companies should care about it because their customers already use Foursquare. More than 10 million people are using Foursquare worldwide, and more than 3 million check-ins happen per day. You might not be interested in Foursquare personally, but as a business owner, you should be on this platform. It [location-based social media] is an extension of where social media is going. This is a new opportunity for you to be engaged with people where they are spending their lives.

CRM: What are the immediate and long-term benefits of using Foursquare?

Gallo: The immediate benefits are that it's a free and instant tool. It takes about a half hour to create your account and start offering deals. When people check in, they see what's around them. If you're offering a special, you can instantly draw people by exposing your business to them, even while they're in a competitor's store.

The long-term benefits are customer loyalty and information. After you attract "newbies" by offering specials for checking in for the first time, you're exposing them to your business. You can engage further by creating rewards for returning customers. Another great thing about Foursquare is you also get a dashboard that tracks useful information, like the time of day people check in, their gender, your most frequent visitors, and other details.

CRM: Why should companies use Foursquare over its competitors like SCVNGR, Facebook Places, and Gowalla?

Gallo: Not all of these platforms are free like Foursquare. Also, Foursquare already has traction as a worldwide brand. This doesn't mean you shouldn't consider using someone else. Foursquare is one way. It's easy, it's a pioneer, and it's growing rapidly.

CRM: What are the best ways to use Foursquare?

Gallo: Include Foursquare in a three-pronged campaign with Twitter and Facebook. When people check in on Foursquare, many share their check-ins on Facebook and Twitter. You should have a presence on all three to better engage your audience.

Then, offer compelling specials that are consistent with your brands. For example, Miss Shirley's Cafe in Baltimore is so popular it regularly has lines that go down the block. It made sense that it offered a deal on Foursquare that lets the mayor [someone who checks in the most frequently within a 60-day period] go to the front of the line. Real estate agency The Corcoran Group offers tips in the neighborhoods where it sells homes and apartments. Keep it fun and people will keep coming back.

CRM: What are the potential pitfalls? Could using Foursquare hurt a company?

Gallo: Pitfall number one is poor customer training. It's no good if a marketing department promotes a company's Foursquare account if the employees don't know about it. This leads to disappointed customers. Chili's did something bright. When you unlock a special on its Foursquare page it says, "servers use code #…." That way every employee will know what to do.

Pitfall number two is lame specials. I walked into a restaurant once that was offering 5 percent off for every fifth check-in. That wouldn't even cover the sales tax in California! Be creative. Your only limit is your imagination.