Location-Based Marketing and Starbucks
June 22, 2010A few months ago, we wrote a blog post on Starbuck’s digital media success. They are continuing to embrace new media by latching onto location-based marketing.
Location-based marketing is used via Smart Phone applications. Examples of Location-based applications are GoWalla, Tri-Out and Foursquare. Since Starbucks is using Foursquare as its location-based marketing platform, we will go into some detail about how it works.
A user downloads the Foursquare application to their Smart Phone and creates an account. When you go to a location (restaurant, bar, coffee shop, etc.), you “check in” using the application. You can link to your Twitter or Facebook account so you can let your friends/clients know where you are. The person that checks into the same location the most amount of times becomes the “Mayor” of that location.
Starbucks among a few other companies have started rewarding their “Mayors”. Starbucks Mayors receive a dollar off of their order. This creates incentive for Starbucks customers to show loyalty to a particular location and it’s also a competition.
Since location-based marketing is new, it has its share of problems. For one, you have to have a Smart Phone in order to participate. As Smart Phones get more popular, this will be less of an issue. Another problem is that Starbucks hasn’t been vigilant about letting their employees know about this promotion. As a result, it creates a negative Starbucks experience when it is supposed to be positive. Also, there is nothing to stop employees from checking in effectively blocking customers from taking advantage of the deal.
Once these issues are ironed out, I think location-based marketing will be the next big thing for retailer’s, restaurants, bars and pretty much anything with a storefront. You can read more about Starbucks’ use of location based marketing here.