American Express is taking a new swing at burnishing both its youth appeal and its loyalty with current cardmembers, and it’s choosing the location-based social platform Foursquare to do so.
For its part, Foursquare is positioning the partnership as a “game-changing” further step in enabling local merchants to use its check-in network to promote their businesses, something the network is increasingly trying to do to help monetize itself.
The campaign, which rolled out at Austin TX’s South by Southwest Festival on March 11 and ended on March 15, let current American Express users sign up and link their personal credit cards to their Foursquare social accounts. Once they’d done that, those members who opened Foursquare on their laptops or mobile devices could find merchants in Austin offering special deals or discounts for Amex Foursquare registrants.
Those deals are tagged as “Special Offers” in the Foursquare Tips category (now replaced with an “Explore” button. Users must check in at the location to unlock the deal. They can then tap a “Load to Card” button and send the deal—most often a “Spend $5, Get $5” offer—to their Amex card. If they use that card to pay for their purchase, the $5 giveback will be automatically credited to their account within 3 to 5 days, according to the partners.
Each redemption of an Amex offer on Foursquare during the event also triggered a $1 donation to Grounded in music, an Austin-based non-profit that brings music education to young people.
“This campaign is about putting value where our cardmembers are,” says Luke Gebb, vice president of global network marketing for American Express. “We know that our cardmembers like to use services like Foursquare, so we want our value inside those platforms. We also want to bring to market a new channel for our merchants that brings them new customers as well.”
About 60 local merchants took part in the Amex/Foursquare campaign during the SXSW festival, including the Austin outlet of Whole Foods, Starwood Hotels and Stubb’s BBQ. Merchants taking part in the promotion posted “Austin Unlocked” signs in their windows.
The partners also worked to promote this campaign, Amex’s first use of a location-based service. American Express funded the $5 offers and also fielded street teams to sign and train local merchants in using the offers. Attendees got printed cards explaining the Amex/Foursquare promotion and found QR codes in POS that led them to the Web site explaining the Austin promotion. Foursquare did not charge merchants to take part in the SXSW promotion.
“We know that our members are much more tech-savvy than the average person,” says Leslie Berland, Amex vice president for social media. “For example, we know that they are 70% more likely to have an iPhone than non-cardmembers. We also do quite a bit of work in social media, so we get significant engagement from our cardmembers there. They‘re tech-savvy and social-savvy, and we’re already getting quite a lot of positive buzz from this promotion.”
From the Foursquare side, the network wants to leverage both its 7.5 million members and the 250,000 brands and merchants who advertise on the platform. “We want to create an incredible redemption experience when redeeming deals in the offline world,” says Tristan Walker, head of business development for the social network that made its bones handing out virtual mayoralties at local hot spots. “We realize we have a lot of work to do there and think we can really make it totally seamless and frictionless, not just for the user but for the merchant, who has to train employees, etc.”
“We wanted to work with Amex specifically because no organization understands loyalty marketing to the degree they do, and I think we have a lot to learn from their successes as we build our own platform.”
Apart from its membership, Amex’s contribution to the partnership is “transaction data, merchant data and card data, all under one roof,” says Gebb. “We facilitate some of the technology behind features such as being able to allow for in-app enrollment in the offers, and the couponless nature of the offers.” Because the deals apply a credit to users’ Amex statements, merchants taking part don’t have to train their staff in how to handle either paper coupons or worry about handling the mobile phones of customers redeeming offers.
Once the campaign is over, Amex will be able to share aggregated data about how many customers signed up for and fulfilled on a merchant’s offer and to what degree they remained loyal to that merchant, as tracked by Amex card usage.
“Retailers have measured loyalty along three levers—recency, frequency and value—and the large chains have really nailed it from an information perspective in understanding who their loyal customers are,” says Walker. “But sole proprietors and local merchants have never had any real idea about their customers’ metrics. If we can combine information that we have about where people are checking in and how often with information about that spending behavior, that will provide something that’s really valuable to local merchants.”
The SXSW campaign represents Foursquare’s first deal partnership with a credit card program, although Walker points out that Foursquare has worked with retail loyalty programs in the past. Last September the social network paired up with Amex to offer a free iPhone app called Social Currency that let users share purchases and wish lists with their friends whenever their checked in to retail destinations over their smartphones.
Neither Amex nor Foursquare is talking yet about future pilots of this partnership, including whether they will continue to center on very local, time-limited http://blog.foursquare.com/2011/03/09/a-whole-new-world-of-specials vents and attractions or will broaden to some other framework.
Just prior to the start of the SXSW Festival, Foursquare unveiled its 3.0 update. Besides changing the way users can discover what’s around them, the new version offers marketers some enhanced options for “Foursquare Specials”, or check-in related offers. These include limited-time doorbuster “Flash Specials”; “Friend Specials” for large groups checking in together; and “Newbie Specials” for first-time check-ins.
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