Kent Lindstrom is founder and CEO of location-based social network PlacePop and the former CEO of Friendster.
Location-based "check-in" applications let smartphone users record when they've arrived at a particular restaurant, store, or other venue in order to receive points in a game, get special offers, or have friends track you, and they've rapidly been gaining a following. But as their popularity grows, so too does the concern over “fake” check-ins. Given the way smartphone LBS systems work, a check-in can be recorded when the user is near, but not actually in, a particular venue. So users may be able to check into a variety of nearby businesses right from the comfort of their living room.
In fact, CEO of check-in app maker Shopkick recently declared that “most check-ins are fake". Yikes.
Since a number of small businesses are starting to invest in check-in apps that send promos or special offers out to customers who check-in frequently at their venue, fake check-ins are a serious concern. The fear is that conniving users will accrue points and rewards for checking into stores when they haven't made a purchase or even entered the place.
Should local businesses, then, avoid rewarding users of check-in applications? No. They should embrace these applications and their growing millions of users. People genuinely want to share their location with their friends, and, presumably, prefer to accrue rewards at places they go over places they don't. In the long-run, it is not as bad news as you might think. Even fake check-ins can be valuable to local merchant. Here are seven reasons why:
- The user engages with your brand. In order to check-in, the user has opened an application, chosen your business, and pressed a button associating themselves with your business. Contrast this to the much lighter engagement of an advertisement.
- The user sees a message from your business. After checking in, the user sees your message: “Thank you for coming to my shop, the peaches are fresh today”, etc.
- The user is near your business. Check-in applications generally only show businesses within, say, 300 feet of the business. People checking in are at least potential customers – they are not checking into a store in Chicago from China.
- You are building a customer list. Subject to the user's privacy settings, when they check into a business, they (and a lot of data about them, like phone numbers and emails) are added to your store’s customer list. Think of a fishbowl on top of the counter with a note that says “toss in your business card for …” Well, you can get rid of the fishbowl now.
- You are opening a communication channel: All those people who checked in can be contacted if they have opted in to receive emails about "deals, offers and happenings near me”.
- The user shares on Twitter: Almost all check-in apps allow check-ins to be ‘tweeted’, so every check-in can be a tweet reminding people about your business.
- The user shares on Facebook: Like Twitter, check-ins can be shared on Facebook as can photos of your business and/or product. Photos are the most shared thing on Facebook.
It is early days for location-based applications. But they provide a critical tool for local businesses to increase both acquisition and retention of customers. Like Facebook Fans, or Twitter followers, more is almost always more.