How to Use Foursquare to Win Customer Loyalty, Featuring D.B.A. Barbecue

I'm David Eckoff. I'm on a mission to help businesses and residents in Virginia-Highland use social media and technology to their advantage.

Last week in part 1, we covered "". This week in part 2, we'll explore how local merchants use Foursquare to create raving fans; we'll detail the business results that can be achieved; and we'll talk about advice for local businesses.

Checking In

I recently had dinner at in Virginia-Highland. While there, I used the Foursquare app on my smart phone to check in. This instantly earned me a special that visit, a free Whippet shooter (Whynatte Latte and Pinnacle Whip Cream Vodka). Not something I'd typically order, and it gave me a chance to try this Wynatte concoction.

While on Foursquare, I read the "tips" section for D.B.A. Barbecue which included:

• "Try the smoked wings. Top-Notch," (Clark)
• "OMG the Mac & Cheese is heavenly," (Stacey O.)
• "The creamed roasted corn is probably the best I've ever had," (Stephanie W.)

I went ahead and ordered them all.

Also while on Foursqure, I couldn't help but start to plan how to unseat the current mayor of D.B.A., Jordan B., who has 22 check ins there during the past 60 days.

Acknowledging People

Turns out, check ins, specials and tips are just the start of how D.B.A. Barbecue owner Matt Coggin uses Foursquare at his restaurant.

"I'll walk up to a guest, and greet them by name and say, 'I saw you check in on Foursquare and I appreciate that', Coggin told me in an interview. "People seem appreciative. The whole thing is acknowledging people for going out. It's all about being acknowledged."

Coggin does something I think is super-smart: he keeps up with his regular (and most valuable) customers via Foursquare even when he's not in the restaurant.

"I walk around the dining room all the time and say hi to people," Coggin said. "But when I'm not there, I can go onto Foursquare and see who checked in, and who is new. Maybe the next time they come in, I'm in the restaurant. I'll go over and say hi, and 'I appreciate you coming in two weeks in a row'. I can shake their hand and thank them for coming in and get to know them personally."

Creating Raving Fans

If Groupon is all about winning new customers, Foursquare is focused on generating return customers who are highly engaged.

"I think retention is what we're going to do better than almost anyone else in this space," Dennis Crowley, co-founder and CEO of Foursquare said at SXSW Interactive. "We just re-launched the specials program with all sorts of new tools for customer loyalty built into that. We have an opportunity to be better at loyalty than almost anyone else."

For Coggin of D.B.A., it's all about turning customers into fans.

"Foursquare gets you a fan, not just a customer," Coggin said. "Someone who is going to talk about you with his friends at work the next day. It generates vast repeat business. You're getting a buy in that you wouldn't get with a coupon in Savvy Shopper."

This is especially helpful in Virginia-Highland.

"Virginia-Highland is a neighborhood where people talk with their neighbors a lot about where they go and what they're doing," Coggin said. "The people talking about D.B.A are talking passionately about us."

Business Results

Word of mouth through social media can help you to grow your business. And Coggin provides some numbers to illustrate.

"Last night, I had 11 people checked in," Coggin said. "One of them was a party of 6 people who all checked in. That goes out to their 112 friends each that they checked in, that goes out to 700 people."

This kind of word of mouth hits the bottom line.

"We're up about 25 percent now vs. this time last year," Coggin said. "Foursquare is probably 5 percent of that. Because I can see who the person is and their repeat visits, I'd say it's a substantial amount."

While we’re talking numbers, results from retailer Radio Shack got my attention this month.

According to the Radio Shack's chief marketing officer, Foursquare users at Radio Shack spend three-and-a-half times more compared to what non-Foursquare users spend (source: ClickZ).

Not bad for a tool that is free for merchants to use.

Advice for Local Merchants

What are the biggest lessons learned about Foursquare?

"Be very specific in what your special is," Coggin said. "Don't just put 'free boiled peanuts when you check in', because then you're just giving stuff away. Put on there, 'with the purchase of a sandwich or an entre'."

Coggin has tested various specials.

"I've done things like 'free shot if you check in if you're wearing an Atlanta Falcons jersey'," Coggin said. "It was a way to get the message out that this is a place to come watch the Falcons game. It wasn't about me giving away a drink. It was getting the word out that we're a great place to watch the game and enjoy food and drink with four TV's. In the spring, I'm changing over to the Braves. We're open in the middle of the afternoon while a lot of places probably aren't open, if you're off from work, come watch the game, drink a beer have some ribs. I'll probably change my check in soon to free boiled peanuts when you check in at D.B.A. during a Braves game."

Coggin's supplier of Whynatte Latte chimes in with advice about defining specials on Foursquare.

"Try to figure out a special that is attractive to the customer yet cost effective for you as the retailer so you aren't giving away too much," Jesse Altman, owner of Whynatte Latte and a Virginia-Highland native said.

Coggin adds a reminder that is timeless - and useful for all businesses.

"You have to think like your customers," Coggin said. "If you're trying to embrace college age to mid-thirties, you've got to think like they do, you've got to stay up to date with what they're doing."

Technology Alone Is Not Enough

Even with great technology like Foursquare, technology alone is never enough. You've got to have heart.

"If you're a Chili's trying to do it and you just putting out random messages and there's no person behind it, then it's just empty, it's just an ad," Coggin said. "But look at Ron from Rosebud (restaurant), you can see his personality in his social media. You know there's a person behind that restaurant. For D.B.A, it's me and my mom. They see us there all the time. Talking with regulars. People see that and our regulars have become a family. We've made all these connections through social media."

Caring about your customers - actually giving a sh*t about them - is the ultimate way to differentiate your business.

And Coggin extends this to caring about the neighborhood.

"I could not be happier than I am in Virginia-Highland," Coggin said. "I've worked in this neighborhood for fourteen years. When the location became available, we jumped on it. I wouldn't have been happy if I had a restaurant anywhere else. Social media has enabled me to make even more connections, faster, and I get to meet them personally. They understand why I have a restaurant. I love it. It's why I do what I do."

The bottom line: Location-based mobile app Foursquare helps merchants to acknowledge customers, create loyalty and turn customers into raving fans.