Small Businesses Use Geosocial Apps to Attract, Engage Customers

Mama Louisa's restaurant hardly looks like a testing ground for geosocial marketing.

The Tucson, Ariz., family-owned Italian restaurant sits on a four-lane street across from a strip mall. Its neighbors include a pawn shop, a bank, and a Super 8 motel; its biggest customer base comes from the sprawling Davis-Monthan Air Force Base less than a mile to the south.

But like a lot of small businesses -- especially in the retail and food industries -- Mama Louisa's has realized that geosocial services aren't just for businesses serving hip, young urbanites anymore. They're for anyone willing to give them a try.

"We have an older lady who checks in on Foursquare," says owner Suzanne Elefante. "And she's in her seventies. It's something that's kind of growing through all the age groups."

Geosocial services allow people to share their personal and geographic information with their social network, and include services like Facebook Places, Yelp, Foursquare, and Gowalla.

Elefante says that while Mama Louisa's entry into geosocial marketing has been in "baby steps" so far, it's already paying dividends. The restaurant, even with its older clientele, already has 121 total check-ins on Foursquare and 32 reviews on Yelp.

"I didn't know too much about Foursquare or Gowalla or any of that stuff," Elefante says. "But I knew my children, who [range in age] from 24 to 35, use those things."

Foursquare alone has more than 8 million users worldwide and is adding about 35,000 new users every day. Check-ins -- which happen when a user lets their social network know when they've arrived at a specific location -- have reached 2.5 million a month. And 250,000 businesses have signed up for Foursquare's merchant platform. For its part, Gowalla has a membership estimated in the mid-100,000s, according to Fast Company magazine. Review site Yelp reports 50 million visits a month and a total of 18 million reviews.

Those are hardly Facebook-size numbers (the social networking site's membership has just surpassed 600 million), but one of the advantages of geosocial services is that they link up to other social networks. So more than providing an online record of user reviews and reactions, they also function as a source of free word-of-mouth advertising. When someone checks in to a location on Foursquare, they have the potential to broadcast that information to other social networks, such as Facebook and Twitter.

"I can't think of a single retail establishment that couldn't take advantage of or shouldn't be using Foursquare," says Paul Evans, president of Evans Media Group, a social media marketing firm in Overland Park, Kansas. "Anywhere people go and check in, you're getting a brand hit."

Or as Nick Robinson, director of client services for Philadelphia-based SocialMedia HQ, says: "It's mobile, but it's on steroids."

And Robinson has the numbers to back it up. When one of his clients -- a Sonic Drive-In franchise -- claimed its venue on Foursquare, engagement went through the roof. Within 60 days, there were 123 total check-ins; 20 percent of those were broadcast to Twitter and 33 percent to Facebook. That represented a 20 percent increase in activity and customer engagement, Robinson says.

But geosocial services do a lot more than check-ins. Most also create competitive games, where users can compete for the most check-ins at a given location or can collect special badges for completing certain tasks. Businesses can also use the services for promoting special deals. A swarm special on Foursquare, for instance, is kind of like a Groupon coupon -- check in with a certain number of your friends, and you get a discount.

Hundreds of miles from Mama Louisa's, an Italian restaurant in Austin, Texas, Cannoli Joe's, uses these special promotions to bring in customers. For every third check-in, a customer gets a free pizza, which is a $10 value -- a kind of geosocial coffee card.

"For us it's more about just getting people in the door," says Quirino Silva, the restaurant's executive chef and general manager. "We're just trying to get our name out there."

And it has paid off: The restaurant's already gathered 430 check-ins on Foursquare and 179 on Gowalla. And since each check-in serves as a word-of-mouth endorsement potentially sent to hundreds of other people, that's a pretty good return. Not only that, but people are slow to redeem offers for free pizza -- only six so far -- so the promotion has cost very little.

While many small businesses are still trying to understand how geosocial applications can help increase sales, there is no reason not to do it; the cost of entry is small, and there's not much of a downside to getting started. The services are almost entirely free, after all, and according to Robinson, there's really only one potential stumbling block: "Businesses simply have to make sure that the profit margin on deals is high enough so they won't be losing money on new customer acquisition," he says.

Besides that potential pitfall, the only real cost for a small business is time, and if a business doesn't have that, it will probably need to outsource its marketing.

As Elefante of Mama Louisa's believes, it's better for businesses to get started sooner rather than later: "This is it right now. People are talking."