Ben Wise on Branding

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Posts Tagged ‘Foursquare

Foursquare Brings Customer Intimacy to the Masses

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In 1995 Michael Treacy and Fred Wiersema released a book called The Discipline of Market Leaders. In a nutshell, they stated that there are three value disciplines and companies must choose one in which to excel. The three areas are:

  • Operational Excellence (eg. FedEx or Wal-Mart)
  • Product Innovation (eg. Intel)
  • Customer Intimacy (eg. Four Seasons)

The Customer Intimacy discipline provides a highly customized level of service. Since this is often expensive to provide, it creates a price premium and is generally offered to a small number of customers.

However, with sufficient data, some companies are able to provide a high level of customization to a large number of customers. My favourite example is Amazon, whose book recommendation engine knows my reading preferences inside and out and can alert me to book releases or sales that are perfectly aligned to my preferences.

Foursquare is now aiming to do the same thing. On the company blog, they announced that the list of nearby “Places” will be customized based on each user’s habits. This will be driven by the vast amounts of data that Foursquare has collected from its hundreds of thousands of users. Not only will their algorithms take into account the places you have ‘checked in’ to, but will analyze the existing popularity of different venues, as well as other factors like the time of day.

The result, if the algorithm works as planned, will be a user experience that is tailored to each individual user. Done properly, this is an extremely powerful brand proposition and can produce excellent loyalty among consumers. And unlike most Customer Intimate businesses, when powered by data it becomes extremely scalable. In fact, the more users on Foursquare, the more powerful their recommendation engine will become as they will be able to collect more data. This is much more efficient than a hotel or retail store that has to hire enough sales staff to give each customer an equally customized experience.

What do you think? Is Customer Intimacy the right discipline for Foursquare?


Written by benwisebranding

May 13, 2010 at 1:19 am

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How The Rise Of Foursquare Will Benefit Every Other Brand

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I recently read an article on the great blog Mark Evans Tech, about why he is passing on the Foursquare craze. Despite all of the media hype the service has received, I am with Mark and won’t be signing up anytime soon. Despite that, I do think that the rise of Foursquare has much greater implications for branding that will become evident in the next few years.

The significance of Foursquare certainly has to do with online and mobile gaming for the masses, but it also shows a trend in consumers who are increasingly willing to share information about their location. This is where the opportunity really lies for brands who want to reach their consumers at the right time and at the right place. If I were to receive a text message from the Gap giving me a $10 coupon while I was walking through a mall, I would at least go into their store.

This technology has been around for a couple of years, but has been held back by consumers who do not want to share that information with brands. Clearly, there is a big step between telling your friends you are at a local coffee shop and telling a brand that you are out shopping and it will still take some time for consumer behavior to evolve to the point where they are willing to share this information (not to mention the effort it will take brands to prove to consumers that they can be trusted with this information). But the trend is unmistakably moving in that direction.

Is all the hype that Foursquare is receiving warranted from a business point of view? Probably not. Will they be a profitable company down the road? Maybe, but nothing too significant. The real changes will be when any brand can make use of mobile geo-location to connect to their users.

What do you think? Would you share your location with your favorite brands?

Written by benwisebranding

January 14, 2010 at 6:28 pm