Businesses seem to have embraced the idea of mobile, mobility and social connectedness;past lessons learned, turning a profit in the cloud is quickly becoming the new normal yet again ; but if the ''why’’ has already been answered by piles of statistical data, many unknowns seem to hover over the ‘’how’’ in this equation.
With Foursquare being valued at 600m dollars and growing, location based services are earning more and more ground against traditional models, but have yet to proof their financial potential in a scope and scale scenario.
Having already gathered a crowd of 10 million users worldwide (more than 3 times the population of my native country haha), Foursquare is one of the leaders of the constantly enlarging flock of on-line start-ups, each aiming to re-write traditional rules of doing business with every post, `Like` or check-in.
Adopting an in-store give-away model, another player, PunchTab, wants to shows how the local grandpa shop cannot and should not escape the digital wave if it wants to stay in the game.The social loyalty platform company offers a free mobile application, PunchBowl, that allows consumers to participate in local business give-aways by being socially active.The idea is to reward customers who are involved with the businesses by ‘’Like’’ing their page on Facebook or helping promote a discount or campaign. The rewards are then translated into free meals, etc. The app is free for both parties, and it looks like that by giving away one or two croissants a day, the local merchant may earn higher foot traffic or word of mouth, provided it sells to a technology oriented crowd eager to engage.
While location based model keeps the local neighbourhood in check, it is the daily deal discount formula that sells big. Financial Times`April Dembosky reports how big US brands are tapping into the online discount sector, striking deals with Groupon (with more than 140m subscribers) and LivingSocial. He writes that the established online deals sites ``are increasingly being recognized [...] as a marketing channel and customer tracking system that warrant exploration``.
He also tracks a change of dynamics occurring within the discount sector. Usually, daily deal companies were incurring the expenses in exchange for customer acquisition but now things are changing towards marketers eager to pay for the eyeballs amassed by the likes of Groupon and LivingSocial.
Of course, one should ask how those traditional daily deal players will adjust to these trends.
Moboline says: While venture capital keeps flowing in, it is the profit margin that counts at the end of the day. Stay tuned to new updates on the latest success business formulas in today's digital age. You can check my previous post on a very innovative BUS model in the telecommunications industry.