Starkville’s own Shane Reed of Strange Brew Coffeehouse makes the paper of record.

Location-Based Services Can Put Businesses on the Map

By MP MUELLER

Although Starkville, Miss., is home to Mississippi State University and the fighting Bulldogs, it’s not a large city with a dense urban epicenter — the typical playground for those who use location-based marketing services such as Gowalla and Foursquare.

But one small-business owner there, Shane Reed of Strange Brew Coffee House, says sales of The Albino Squirrel Latte — a signature coffee drink with white chocolate and hazelnut syrup, get it? — and other drinks have increased 34 percent this September over the previous September, which he attributes to his use of Gowalla and other social media sites. When customers check in with Gowalla at Mr. Reed’s coffee house, they are greeted with a 10-percent-discount off of any drink. They show the counter crew the discount on their smartphones and proceed to sip happily.

Mr. Reed is an enthusiastic user of social media, but he says that in terms of generating walk-in traffic, the location-based services trump Facebook and Twitter. “You can have a great Twitter account and Facebook page,” Mr. Reed said, “but if people don’t know where you are located and can’t find you, it’s really not doing you much good.” On average, he said, he gets four or five check-ins a day, but that number can jump to as many as 30 or 40 a day when Mississippi State’s Bulldogs are playing. And it doesn’t cost Mr. Reed anything, save the value of the discount.

There can be other advantages as well. When the users of location-based services see friends checking in on Gowalla, Foursquare or Yelp and making a comment about the business they are visiting, it can have an impact. The location services reward the businesses with the most check-ins by ranking them higher in their search results. Someone who types “hair salon” into a location-based app on a smartphone will get a list of the most popular places to get coiffed in the vicinity and the salon with the most check-ins will be at the top of the list with its logo, a link to its Web site and a map to take customers right to the door.

Foursquare says it has more than 10 million users worldwide and use of these services is expected to soar. To date, Foursquare’s core audience of 18-to-34-year-olds has skewed male. This may be the result of female security considerations or a greater inclination among males to take a cannonball approach to jumping in the social pool. However, Adam Ostrow, editor in chief of social media news site Mashable, says checking in won’t be necessary in the future to receive geo-targeted specials, and that may attract more female shoppers. “Every smartphone that’s shipping now is including location features so that creates an opportunity for these services to extend their reach and start pushing out offers based on where consumers are,” he said. “So consumers won’t have to share their location to get those deals.”

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