Location-Based Social Networking: Worth Checking Out the Check-Ins?

If you’ve noted the ever-growing number of location-based social networks out there with increasing curiosity, you’re not alone. Yesterday’s MITX event, To Check-In or Not to Check-In?, with Mike Schneider (Allen & Gerristsen), Leighann Farrelly (Yelp), Phil Thomas Di Giulio (Pegshot), and Wayne Sutton (TriOut), weighed out the opportunities and challenges.

Leighann explained that while LBS is valuable in some ways, it’s still simply a gaming challenge for some consumers and not quite yet an accurate portrayal of a brand’s customer base (especially considering that there are still a large number of people without smartphones).  The discussion spanned three key areas of LBS:

The Options – What’s Out There, & What’s the Point?

Mike began by asking the panelists “What’s the point of a check-in, and what are the differentiators?” which panelists elaborated on by illustrating case studies from their own experiences. Comparing Pegshot, TriOut, and Yelp, in addition to some panelist favorites Whrrl and Stickybits, it’s clear that standing out is about maintaining a unique focal point in usage & benefits. For instance, while Pegshot is primarily focused on sharing media without consumer incentives, brands utilizing LBS like Tasti D-Lite encourage check-ins for points. Still other platforms, like Yelp or locally-based TriOut, focus primarily on a facilitating authentic relationships between consumers and business owners. So while Foursquare approaches their 2 millionth user, the vast number of platforms succeed by keeping their experiences, features and benefits unique.

The Value – How Do You Create Relationships vs. Transactions?

Wayne simplified the way for businesses to get the most out of location-based promotions comes down to time and knowledge bandwidth of employees. Without understanding and managing the wealth of data LBS provides (like “Google Analytics for people”, as Wayne put it), it’s just pushing money around instead of building experiences. Phil noted that smaller brands have even more to gain in this sense, because the money is pushed back into the community – so connecting and engaging are the critical goals. Offering value over incentives for consumers will be the key to success in LBS.

The Opportunities -  What’s Next?

In terms of where LBS is heading, privacy, monetization, and competition were recurring topics of concern from the audience. Phil voiced his concern that bringing a location-based aspect into Facebook would be a “scary thing”, as the platform isn’t inherently public (as Twitter has been). Leighann explained that allowing more than one layer of conversation (as Yelp does) between business owners and their customers enables authentic conversations and balances the needs of both sides. The endless possibilities of ad placement throughout platforms, in addition to special business promos like TriOut allows, creates an easy model for monetization of LBS platforms. While check-ins do allow for rogue tips from competitors, the panel agreed that people will see through it as “LBS Spam”, which should keep competition in check. Keeping value unique and data measurable/manageable will be the keys to  creating successful new LBS platforms.