Commentary

Foursquare, Starbucks Need Better Blend Of Offers

Starbucks/Four Square

Starbucks and Foursquare garnered widespread publicity when they teamed up last month to offer a $1 discount on Frappuccinos to the mayors of individual Starbucks stores. The hot social location service and one of the country's most ubiquitous consumer brands looked like a formidable pairing.

Tristan Walker, who leads business development at Foursquare, told Mashable at the time that he hoped the effort was just the start of Starbucks experimenting with other mayor rewards in partnership with the company. "Starbucks is particularly innovative as it relates loyalty and social media," Walker said. "So we continue to be super excited to explore this intersection with them," he said.

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But the companies may want to consider lessons learned from this initial rewards offer, which ends June 28, before jumping into the next one. The Frappuccino promotion has come under criticism on various counts, laid out in a recent post by Forrester analyst Augie Ray.

For one thing, he points out that becoming mayor of a Starbucks location isn't so easy -- he estimates it may take 30 check-ins or more during a two-month period to gain that honor just to get $1 off a $4 Frappuccino. Woohoo. That's not even on par with an old-fashioned punch card offering a free java after 10 trips.

He and others have also pointed out the inherent unfairness of Starbucks allowing its baristas to compete to become mayors of local stores. It seems like a no-brainer that Starbucks would have blocked employees from being eligible for the rewards program, effectively pitting baristas against consumers.

"I didn't see this whole promotion thing coming or I would have never become mayor," commented one Starbucks worker on the Starbucks Gossip blog earlier this month. "I'd much rather some customer benefit from the $1 off Frappuccino coupon."

Forrester's Ray also noted that the Frappuccino promotion seems to pop up every time he gets an alert for a special offer nearby when he checks in somewhere. "I now seem to receive no offers other than Starbucks," he wrote. It's a little like watching a 30-minute sitcom and seeing the same Starbucks ad eight times!"

He also complained the Starbucks ad wasn't geo-targeted, so he would see the offer even when far from his local Starbucks at home, where he would have a shot at becoming mayor. What's more, Ray explained he isn't even a coffee drinker, so why isn't he seeing offers more tailored to his preferences?

People commenting on his post concurred, suggesting that Starbucks and Foursquare come up with ways to reward people for loyalty other than mayorships. That's something social location rival Loopt has tried to do with its recently launched loyalty program that lets brands customize rewards. The Gap, for instance, is giving a 25% discount to users of the Loopt Star application who visit any store twice.

One comment on Augie Ray's post recommended Starbucks reward people for 10 check-ins that they push to their Facebook and Twitter accounts with a discount or free item. "Mayorships are tough to earn, but consumers engage in other activities which are of value to companies," it read.

Assuming Foursquare and Starbucks continue to pursue joint loyalty programs, they would be wise to heed such suggestions to provide more diverse and worthwhile offers. "If Foursquare and other geo-location platforms (are you listening Facebook and Yelp?) want to build long-term success, it's going to take unique, customized and relevant offers, and not the same 'Please check in here a lot and we'll give you 100 pennies' offer," wrote Ray.

Otherwise, the only title they'll be worthy of is Mayor of Simpleton.

3 comments about "Foursquare, Starbucks Need Better Blend Of Offers".
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  1. Steve Chandler from Paramore|Redd Online Marketing, June 21, 2010 at 5:26 p.m.

    I agree. Harry Carey's in Chicago is using FourSquare and uses different offers at different locations. Holey Cow!

  2. Reuben Segelbaum from Syncapse, June 21, 2010 at 8:37 p.m.

    for me...I always receive the notifications also. However, the coupons are always available AND a number of the locations required me to go home and print the coupon off....considering it was a mobile program...wouldn't the locations know just look at the screen and honor the coupon?

  3. Mark Scott from AutoTrader.com, June 22, 2010 at 3:15 p.m.

    Yeah - hardly worth the effort to become the Mayor of a place for $1 off. Especailly if you're competing against the baristas who are checking in there every day.

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