What FourSquare Means To Financial Institutions

The Financial Brand does an excellent job of putting FourSquare into perspective for financial services firms:

Most financial institutions are trying to push people out of branches — especially for routine interactions — by encouraging use of self-service channels. But a Foursquare promotion encourages exactly the opposite: frequent branch visits. If your financial institution builds a Foursquare promotion around mayors, you will be taking those who are highly wired, leading-edge, early adopter tech junkies and encouraging them to come into branches more often than they should.

Building a Foursquare promotion around the mayors of your locations may feel like the easiest and most obvious way to tap this social media platform, but it is probably the worst thing you can do. For starters, it really limits the promotion’s audience. There can be only one mayor at a time and there will likely never be more than 2-3 people who could possibly ever overtake him/her. So if you have five branches, a mayor-based promotion would mean something to only around 15 people.”

Banks and credit unions are missing the real lesson here: People like to play games. We like friendly competition, and we like to turn routine things into games to spice them up, make them a little more interesting.

So what should banks and credit unions do? Make a game out of interacting with the bank/CU. No, I don’t mean getting 5 points every time someone does some as meaningless as check their account balance.

But what about applying “game theory” to PFM usage? Construct a budget, get 50 points. Categorize your quarterly spending, get 50 points. Help someone else “in the network” set up their budget, get 250 points. Or more broadly, make a deposit into a savings account for more than $100, get 100 points. Give up paper statements, get 100 points. For every $10 you spend with your debit card, get 10 points.

Sound like a loyalty program? What in tarnation do you think Foursquare is? (Side note: Hypocrisy kills me. There are people who criticize rewards programs for “buying” loyalty instead of “earning” it, and then turn around and rave about some social media concoction like FourSquare).

The keys to success are: 1) Constructing a points scheme that rewards meaningful interactions and actions (this is why I keep harping on the importance of the concept of customer engagement, and how to measure it); 2) Making it social so people can see how they stand relative to everyone else, and to encourage some friendly competition; and 3) Integrating it with enterprise-wide marketing efforts.

Of course, if you prefer publicity over profits, feel free to pursue that Foursquare promotion.

12 thoughts on “What FourSquare Means To Financial Institutions

  1. Pingback: Tweets that mention What FourSquare Means To Financial Institutions « Marketing Tea Party by Ron Shevlin -- Topsy.com

  2. Absotively….

    I also contest the dismissal of the Foursquare Mayors idea. Those 15 people mentioned can easily be invited to meet with the branch manager, be complimented, have their egos stroked, maybe, in your model, get some points. They’ll tweet and blog about this and their networks will and the 15 people at the core will/may/should/might/maybe-couldbe will explode.

  3. Ackkk, not points please! Points are about as boring as you can get, and really gets in the way of the other points-based rewards system that REALLY matters, namely dollars.

    I never adopted foursquare myself, making the location-based jump from Brightkite directly to Gowalla. Gowalla wins, for me personally, for a number of different reasons.

    Yes, the total number of different places that one can check in IS a running total, but equally fun for either of these “games” is earning badges. Ten different Mexican restaurants gets you a special badge, as does ten different coffee shops, and various other possibilities. Creating and founding various milestone number of places also gets you badges.

    I am reminded of a tidbit of information that I learned from social stockmarket buying/selection site Zecco.com VP, Loren Cheng, who attended the inaugural BarCampBank SF… he stated that their number one viewed page by far was the one that showed the leaderboard of stockpickers…. certain people love competition, and they could check in regularly to see who was number one, in the top ten, what their holdings were, etc.

    So yes, make a game of it! And if you make it online social, you’ll get better longevity and engagement with it!

  4. Morriss: I hear you. I don’t know what the right or best way to implement this is. Somebody with far more creativity than what I’ve got will have some good ideas. The key point I wanted to make (and in looking at the post, I realize I didn’t say this explicitly) is that the real lesson from 4Sq is about “game” and NOT geolocation. I think too many people are focused on the geolocation aspect of 4Sq, and don’t recognize it for what, at the core, it really is: a loyalty program.

  5. JP: Thanks. I’ve actually shared that idea in some of the PFM presentations I’ve done recently. Unfortunately, it’s towards the end of the presentation, when most of the people attending are already asleep.

  6. Foursquare is a game and “loyalty program” that reinforces behaviors. I like Morriss’s idea too (because it’s fun), but I’m not sure what behavior(s) it reinforces.

    Ron’s game idea isn’t going to jive with everyone, but there are lots of people who love the thrill of accomplishing something. “Give me a checklist and I’ll check ’em off.” It taps the same part of people’s psyches that lead to World of Warcraft, multi-level/stage games like Halo, etc. “I work at something and get rewarded. It makes me proud. I gain respect from others who play also.”

  7. I think you are on to something.

    In March, at the Best Practices in Retail Financial Services conference, I saw a great session by Barry Kirk of Maritz Loyalty called “The Gamification of Loyalty: Driving Deeper Customer Engagement Through the Power of Play,” mostly with examples from outside the industry.

    By this time next year, I think we’ll see a lot more examples from inside the industry.

    It’ll be exciting to watch what ideas people come up with.

  8. Love it! Of course, I (personally) would ask, “what do I win”, and it better be cold, hard, cash, or at least the electronic version of it. But then again, I don’t think Farmville (or FourSquare, in this case) offers cash incentive, does it? All I know is that I have de-friended WAAAAAAY too many folks for their addiction to that game. They certainly aren’t leaving Facebook anytime soon, and they hit it up everyday. Kinda the point, though, right?

  9. Paul: The “rewards” you get from checking in to Foursquare aren’t that lucrative. People like games, they like to compete. If it’s fun, they’ll participate for the hell of it. Here’s one suggestion I do have, though, to any bank considering doing this: OUTSOURCE IT. I can’t think of too many banks w/ a competency in “fun”.

  10. Check in, get a free toaster?

    Games are fun…being reward for small and large achievements is motivating. Love bringing more “fun” to finance. Look for points linked to achievements in a Geezeo powered PFM near you. Great idea Ron…check’s in the mail

    As for Foursquare I definitely think there’s an opportunity here but is a tough one. Turning time consuming errands into something you “want to do” is a tough nut to crack. Trips to my community bank and credit union is honestly right up there with visits to the dentist or the post office. The idea of “checking in” more than someone else at my local branch to earn mayor status will not outweigh the pain and time spent doing the chore.

    On the flip side, if I have to go the branch to make a transaction anyway I might “check in” if there is additional possible value to me.

    Perhaps the value in “Checking in” could be less self serving? maybe an event tied to a local charity or fund raiser. Creating a cause for the greater good could motivate. Another option might be to associate “check ins” to events. For example, your FI is holding a free personal finance workshop and you get points back to your PFM scorecard for attending the event.

    If all else fails you could always do a live streaming of ferris beuller’s day off on twitter. guaranteed media coverage.

    http://techcrunch.com/2010/05/07/ferris-bueller-twitter-foursquare/

    BTW Ron like the new angry tea bag design…edgy

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