Thursday, June 6, 2554

Mature a start-up, working with AmEx

Then Facebook and Google borrowed the concept — and even the term check-ins. Analysts and users wondered if those Internet giants would squash Foursquare as a bug.

So far, apparently, Foursquare is holding the Earth. The company said this week that it had hit 10 million registered users, although I would not say how many of them are active.

And Thursday, Foursquare plans to introduce its partnership biggest until now: a national agreement with American Express to offer discounts to cardholders when they check in on their cell phone at some stores and restaurants.

Foursquare users are accustomed to receive prizes in the form of coupons and merit badges. But bids more substantial, such as those offered to holders of American Express card can bring Foursquare and other location based services further into the mainstream.

These services have been slower to recover between people who do not live in dense urban areas like Manhattan, where the meetings with friends are often just a taxi ride away.

In may, the Pew Research Center found that only 4 percent of American adults use such services to share their location. Companies like Foursquare to offers, as a way to make their offers more attractive for those who may not want to meet after work for a drink, but would be interested to get a deep discount on sneakers.

"In 2010, it was all about check-in," said Noah Elkin, an industry analyst with eMarketer, a mobile advertising and marketing company. "Now, is to check out".

Although Foursquare will not receive any revenue from the deal, American Express, says the promotion will help legitimize the approach of the company and will help attract other more profitable partnerships.

To begin, American Express will offer deals to the authorities and the sports clothing retailer H & M, together with some restaurants in New York, as the barbecue and Union Square Cafe mixed Blue Smoke. For example, buyers who spend $ 75 m & H will receive a $ 10 credit to their American Express accounts. Those who spend $ 50 at Sports Authority will get a reward of $ 20.

Edward p. Gilligan, vice President of American Express, said that the national deployment came after a test run in March South from music and Technology Conference Southwest. On average, those in the program spent more than 20 percent of American Express card holders who do not have access to special offers, Mr. Gilligan said.

"We have always done marketing with merchants to make offerings to our members, how to send offers by direct mail, put the information on sales on the Internet," he said. "But the response rates tend to be low".

The trial version of Foursquare bond brought a higher response rate than anything we're doing, "said Mr. Gilligan.

American Express also hopes that by combining with a start-up that appeals to hip and technologically skilled, it can appeal to a younger clientele.

"We don't tend to tilt under 35," said Mr Gilligan. "Hopefully this will help us to remain relevant to younger customers.

He said the company elected to partner with Foursquare instead of Google or Facebook why Foursquare already has a widely accepted system that rewards the user loyalty.

American Express can work with other companies in the future, said Mr. Gilligan, though he said he was sure that Foursquare would be the focus of the company for a while. "The point is for us to find customers where they are already active," he said.

Dennis Crowley, Executive Director and a founder of Foursquare, attributed his momentum continued in its singular focus on the spot. "When people think about Facebook, think about it as a place to send their friends messages or post updates, not necessarily as a place for check-in," he said. "We are associated with one thing, position, and that really helps."

He also said that the partnership of American Express was a sign that Foursquare, which now has about 21 million dollars from investors and more than 60 employees, was maturing. "We started by offering vouchers for Keys D-Lite and other smaller deals, and now we are introducing offers to the millions that use American Express," he said.

Foursquare is growing faster than similar startups. Gowalla, another check in service based in Austin, TeX., has about a million users, while Loopt, a location service rival mobile, has more than five million.

Google says its latitude service has 10 million active users over the last 30 days, although that includes people who were using on the PC.

Malorie Lucich, Facebook spokesman, declined to say how its location service called places, was faring. In the past, the company said that more than 250 million people were using the mobile application, although it did not offer specifics on location service.

Analysts say the capacity of those services offer customized offers buyers will become more valuable as the daily deal and coupon market becomes more and more cluttered.

"If you look at Groupon and LivingSocial, they put out a lot of offers, but are random," said Madeline k. Aufseeser, a senior analyst at Aite Group, a research and consulting firm focused on the financial services sector. "You could be a man and constantly getting beauty services offered by you."

Collaborations, such as the American Express one, he said, is targeted to merchants because the sites are aimed at those who actually use them. In addition, companies working with Foursquare and American Express will be able to leave the paper coupons or even the need to scan the screen of their phone at a Terminal. The awards will be counted behind the scenes with every shot and the tap.

"There is a whole new industry evolving around to deliver more sophisticated offerings, geographic based," he said. "It's only going to get much more powerful."

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