Over at Fast Company, there’s a post about the American Express partnership with Foursquare. While the announcement is interesting, the direction that Fast Company runs with the article is less so.
According to Fast Company, the AMEX/FourSquare deal “…might finally give us some hard evidence as to whether social media is a worthwhile investment for merchants and marketers.”
I’m not sure where Fast Company has – or hasn’t – been looking, but agencies, consultants and business owners have been proving the ROI (return on investment) for a while now.
The Easy Social Media Management Example
Lauren McMullen is the owner of Easy Social Media Management, a consultancy that helps small businesses understand social media and how it can help their bottom line. Her agency was recently involved in a book launch for an anthology called Align, Expand and Succeed – Shifting the Paradigm of Entrepreneurial Success.
The book featured 40 authors, and over a six-month period Lauren used the social networks of the authors and the publisher to build awareness around the impending publication. This included blogs, YouTube interviews, and article directory promotions.
Because of this, the book became an Amazon bestseller on the morning of launch, and held the number one position in the four categories it was targeted to.
The Willis eTech Ltd. Example
John Willis is the founder and owner of Willis eTech Ltd., a small business offering photography, video and websites for other small businesses based in Okanagan, BC.
While flying over the newly-opened Sparkling Hills resort in Vernon, BC, John took some pictures of the resort and uploaded them to his TwitPic account. He tweeted the owner of the area where Sparkling Hills had opened their resort, and was invited to contact them.
That led to a bunch of photography and media projects for John’s company, and his use of other social media platforms saw him become recognized as the go-to guy in his area for social media and how it can be used to drive business. He speaks at local Chamber of Commerce events as well as seminars, and trains businesses on how they can effectively use social media.
Why the AMEX / Foursquare Deal Isn’t All That
These are just two examples. If you want others, just type in “social media roi success stories” to Google and you’ll find just under 3,000 results. Now, that may not sound much in the grand scheme of things, especially when other Google searches often result in millions of examples.
But that’s more than likely to do with the fact that instead of writing about how the ROI of social media is real, most businesses and agencies are just getting on with proving it to their clients, as opposed to trying to show how great they are in public.
They’re making results happen every single day – which is why the Fast Company angle means less than they might have hoped for.
For instance, according to the article, one of the “big wins” with the deal is that Foursquare will “…help merchants foster customer loyalty.” By encouraging check-ins and rewards, and the ability to tie back into your AMEX card, it means more people will shop at your location.
Great stuff. Except for one major problem – you don’t have to be at a location to check in. You don’t have to physically be there to become a Mayor and reap the rewards for it (like a free meal, or a discount on your clothing, etc).
My house is about 5 miles away from my office. Yet, by not checking in anywhere when I leave the office, I can be at home and check into my office because of the way Foursquare caches my last check-in.
Think about that from the point of view of a restaurant owner. They decide to offer a free meal and drink to the Mayor of their restaurant. I see that, so start checking in, even though I’ve never been there before in my life. I become Mayor, get my free meal and drink, don’t pay a thing and leave.
I then get my friends to do the same, and between us we constantly force the restaurant owner to give us free meals and drinks. But we never go to that restaurant as paying customers.
So… where’s the loyalty building in that?
Until location-based services can actually lock you down somewhere and make it impossible for you to check in somewhere unless you’re there, you’re not going to build loyalty through offers. You will, however, lose the vendor money – and that doesn’t build loyalty or ROI.