The Analytics of Geo-Location

Geolocation and mobile computing are trends that are now in the mainstream so it’s about time to examine what kind of analytics we can get and what we can do with it.

For one thing, Geolocation and Foursquare can be your best friend, especially if your business is brick and mortar, like a restaurant or even a hardware store (though, besides Home Depot, there aren’t that many hardware stores that are fun to hang around in).

Take Havana Central, a New York Cuban Restaurant chain who is a client of mine and who aspires to be the Roger Smith Hotel of local restaurants here. Through my WebMetricsGuru.com blog I have become known to many in the Social Monitoring sector and have access to many of the best platforms, tools and agencies of choice to work with. One of the tools I use often is Radian6, a Social Monitoring platform that is used by many marketing, PR and communications agencies to monitor “online chatter” and “buzz” for their clients or own businesses. Radian6 is also known as the first “listening” platform to integrate with WebTrends (and Omniture) as well as SalesForce for SocialCRM.

I set up  Radian6 alerts set up on Havana Central that sends email status every 10 minutes  when anyone tweets or mentions the restaurant chain in any way.  It just so happens that I was in the 46th street Havana Central location one evening and received an email alert from a customer who was saying she was in the restaurant – via Twitter.  When I read my email alert from Radian6 I immediately realized the customer was in the restaurant at the very same moment I was.
This is what the alert looked like on my iPhone:

TWEET FROM: KIMBERLY819

Kimberly

Source: twitter.com, Posted on: Mar 01, 2010 9:36 PM by KIMBERLY819
Chillin with my girl Yesenia in the city!! Great restaurant Havana Central!! Great Live salsa band!! Oooooooowwwww!!!!
Following: 86 | Followers: 65 | Updates: 270 | Sentiment: Positive

The alert took place in real time – I suggested to the management the customer and her friend should be given free drinks and discounts that evening. That’s all I did – and as we acted in real time- within 10 minutes of the initial tweet – the response was interesting.

The customer, Kimberly819 and her friend got their free drinks.

Later on that night I got another alert – guess what this one said:

Kimberly TWEET FROM: KIMBERLY819
Name: KIMBERLY819 Posted on: Mar 1, 2010 1:07 AM
Followers: 66 Following: 87
What a GREAT night at Havana Central!!!! My new favorite spot!!
Link http://twitter.com/KIMBERLY819/statuses/9811482654

That got me thinking … if we could do something like this – foster customer loyalty – that easy (hell, just give the lady a free drink) what would happen if we gave everyone who tweeted at one of Havana Central’s 3 locations a free drink?

I used analytics to figure it out. How often could Kimberly819 happen and what would it mean to Havana Central in increased revenue? I found on first pass, exporting Radian6 data from a “River of News” Widget I set up for the restaurant alerts that at least 20 times in the last month a customer tweeted they were in one of Havana Central’s locations – though in retrospect – that number is way, way too conservative – I put it more at 100 times a month, at least, and maybe even double that – if we take every variation of announcing “I’m at Havana Central”.

Radian6 – Tweets & Facebook announcements of presence at Havana Central

Source: Radian6 – Tweets & Facebook announcements of presence at Havana Central

For those customers who have linked their Foursquare accounts with Twitter and Facebook the numbers are even higher with about 5% of the total conversation recorded as having happened at one of the restaurants  – and I can swear the number is closer to 10% as we get 2 or 3 tweets a day from people who are announcing they are at one of Havana Central’s locations.

Radian6 – Alerts with Foursquare check-ins included

Source: Radian6 – Alerts with Foursquare check-ins included

Suppose we go with the higher number (around 60 individuals a month say “I’m at Havana Central” in one slang way or another) and estimate a typical loyal customer will return a certain number of times and spend a certain amount in per visit – we can get a approximate ROI number.

I’m going to make a deduction the a typical “rewarded customer” we find via Twitter, Foursquare and Facebook might spend $300-$500 a year at the restaurant in addition to anything else they might have spent there if they had not been rewarded. I was told by Jeremy Merrin, one of the owners of Havana Central that the number might be considerably higher than that (add up all those blueberry mojitos and live Latin dancing, etc)– but I’ll be conservative, just to be safe.

One possible result is increased revenue of close to 30K a month – over a year that could mean as much as 360K – just by making someone’s visit a little bit friendlier and better for them.

Check out Marshall Sponder’s blog  – www.webmetricsguru.com.

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5 thoughts on “The Analytics of Geo-Location

  1. Thanks for sharing this experience – great post!

    I’d be interested to compare ROI on giving free drinks to clustomers found via social media with giving free drinks to randomly selected customers in the restaurant.

    Converting a single-instance customer to a loyal customer through the use of rewards is not new, and locating customers who are currently in the restaurant is not new either (just open your eyes and look around the restaurant).

    The value would be to see if Kimberly819’s tweets start driving her friends to the location – if a social media active customer has a measurably greater influence on peers than a less SM active customer.

    The $30K/month increase in sales is great, but I’m not convinced that social media measurement/tracking would be required to see these results. All her tweet told us is that she enjoyed the free drinks.

  2. Pingback: WebMetricsGuru » My post on The Analytics of Geo-Location at Web Analytics Rock Stars Blog
  3. Hey Todd,

    Good points and feedback – and bringing up A/B testing in this regard – though hardly new, seems refreshing “Analytic
    in fact, I agree with you – we ought to do a case study and prove what the effect of giving Kimberly819’s a drink vs. giving anyone a drink … and if there is a lift because we have someone on Twitter, Facebook or FourSquare a drink.

    Of course, we’ll have a tracking issue – how are we going to gell across three locations and staff/technology not yet adept to track or adapt to such requests to know a referred customer came in? I’m suspecting if we give coupons to those customers to give to their friends and do the same on 4SQ, Twitter and FB we will have the information we need.

    Any other ideas? I am all ears and like your suggestion – let’s continue the dialog.

    Marshall
    Webmetricsguru.com

  4. By way of clarification, the guest we were there to inquire about HAD shown up. She just forgotten that I, the Online Marketing and Community Strategist who had seen her mention that she was coming on our Fan Page and had interacted with her only online, had made her reservation FOR her and set her up for a really nice table, special attention and a round of drinks and told her about it ONLINE.

    It was HER loss for not having checked in by name with the hostess, but our process was in place . . .her photo to the hostesses would have helped but what if the avatar is a cartoon or logo or something unrecognizable once the person walks in your door? Anyway, raincheck . . .

    Yes, there are obstacles and many scams to watch out for, but until we take the risk that other companies have done before the internet even existed what with duplicates of coupons and such, typos in an ad or other promotion in print OR broadcast, all we can do in this increasingly Social Media Connected Environment is try to SURPASS the JONES Inc. we vy with for guests, clients, customers.

    Marshall was there to nag me about Kimberley that night, but we at Havana Central had already been showing special treatment to those who tweeted they were there or going there as evidenced by our visit that night to check on one such table. The point here is that it was even more impressive when you are in the same room and someone is connecting to the community-at-large with no notion, for now, that the business was listening.

    Yes, this has been accomplished before without gadgets, but the gadgets make it oh so much easier, n’est-ce pas? As an owner of restaurants since 1998, I can tell you that the hundreds and HUNDREDS of guests who pass through our 3 and soon to be FOUR locations are NOT that easy to track all in one system. There are general managers, shift managers, junior managers, servers, and bussers, who canNOT know everyone of our guests, although they do recognize many who come often or are just especially memorable.

    Now that geolocation services have gotten so much attention, (Hey @foursquare guys, I saw you preening in that NY Mag layout-Apr 26 issue. Niiiice.) people are seeing that they CAN get discounts, free product, or service or at least special attention if they check into a business, or at this point TV channel, movie screening. . .anything where you can show you care and you are participating, if only virtually, in the community experience. This behavior will only increase or morph into something not too dissimilar . . .I like that EZ-pass idea! ANY one wanna jump on that?

    Mr. Steve Baker, who responded to this post with a post of his own,

    http://www.thenumerati.net/index.cfm?postID=582

    you can downplay or rather upwork??? the way people use this checkin to their advantage and somehow end up costing the business lots of money trying to catch up with all of those checking, but as Marshall says, the way this market is moving, what is scammable today, is already another social media product or service tomorrow. Remember Friendster? Hell, remember MySpace? Your move, Steve.

  5. Cecillia,
    I feel your pain. Having a “Social” strategy is a win-sometimes situation, and as much as it relies on individual people to check in/like/follow/tweet, I believe it’s more about building a brand that is active on the social networks. It’s about your brand going out of its way to provide a secret password to the lucky few who have checked in x number of times in the past week, and using that secret password will get them free drinks. Now the ball’s in their court to come in and redeem that free drink.

    In my honest opinion, the constant attention that is illustrated in Kimberly’s case is way too much attention paid to one person who may or may not say something nice about you on her twitter. She’s not committed to writing something nice about you, in fact she could say something downright nasty about you. This is not a way to run a social strategy, by buying good reviews. This is actually frowned upon! Throwing free drinks around will set a bad example and will result in shooting yourselves in the foot!

    As they say actions speak louder than words. don’t count on someone’s words. Count their actions and reward them for their loyalty.

    Cindy

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