Tuesday, 19 July 2011

The problem with foursquare...

CrunkedFoursquare is seen by many as a template for a new style of loyalty programme - trading physical rewards for virtual achievements in the form of badges and showing how tiering can be scaled horizontally, not just vertically. Whilst these achievements may technically be valueless, they do seem to provide value for Foursquare with various reports indicating that it is still the King of location based services with up to 5x more check-ins than rival, Facebook Places.

But as a (reasonably) dedicated Foursquare user, what's becoming clear is that the design of foursquare is really less about retention and more about acquisition. Sure, I'm still playing so it's done a great job of keeping me engaged - in essence retaining me. However at an individual behaviour level it is less convincing.

The challenges in terms of collecting badges ensures I continue to check-in, but each badge, once attained is essentially done. I don't need to do anything more for that badge, it's mine, forever. The same for mayorship. If I don't do anything more (and if no-one else checks in) then I retain that ranking.

Simplistically, Foursquare is a behaviour change acquisition programme, not a behaviour change retention programme.

Foursquare probably don't care too much - they don't need me to exhibit the behaviours necessary for the "Crunked" badge more than once, they just want me to keep checking in and to chase that next badge.

However, as we begin to echo these kinds of gaming and recognition mechanics into mainstream loyalty programmes, we need to consider the consequence of recognising a behavioural achievement only once.

We can see this consequence in traditional loyalty programme tiering. While tiering can be quite limiting in that it normally only recognises one behaviour - that of spend - it is also limiting in that it "tops out" with many scheme operators seeing customer behaviour begin to tail off once a customer has reached a designated tier level. In essence they have achieved it.

This isn't because the customer has given all they have, instead the customer has simply moved on to a competitor programme. They are "gaming" the whole loyalty eco-system, racking up recognition across different brands as they've exhausted the challenge (and the benefits) within that one brand.

This isn't just limited to loyalty.

Banks see the same behaviour around card fees. Where a customer is charged a fee but can essentially "earn out" that fee based on spend, there is a noticeable drop in spend once this earn out period has been met. Customers haven't stopped spending, they have just reached the goal or challenge set, even though this wasn't the intention.

Cogs

Given that customers have a psychological need to finish what they've started and a competitive streak to do better, it doesn't make sense to limit achievement recognitions to a once only event. Instead, we need to make sure that they can keep progress, either to maintain that recognition or to lift it further.

Looking across to games, they recognise different levels of achievement for the same behaviour. The iPhone game Cogs for example provides a bronze, silver and gold recognition for different behaviours such as the time taken or the number of moves required. This means even when the task is complete, I can usually do better.

This isn't to say that one off recognition isn't important. Customers need to feel they have achieved something, "banked" it and can move on. However, if this is the only sticky retention mechanic a programme uses it risks losing focus on key, repeatable behaviours.

Behaviour isn't simply changed, it is maintained.

A great example of recognition which looks to maintain behaviour (if slightly unique) is United Airlines acknowledgement of frequent flyer, Tom Stucker, who has racked up 10 million miles on their programme. In recognition of this amazing feat, Stucker was given a unique (for the moment) titanium loyalty card and has had his name put on the side of a United Boeing 747. Whilst a tearful Stucker was overwhelmed by this recognition, the problem for United is they have just raised the bar again. There is now a new challenge to be achieved and you can bet there are some out there with their eyes set on it.

As we start to democratise our loyalty programmes, bringing in horizontal recognition and increasing the engagement through broader challenges and rewards we need to make sure we don't limit a programmes growth by letting a customer simply tick the box and move on.

6 comments:

EndafKerfoot said...

I recently took my HTC to be repaired and it came back stripped of all apps - including Foursquare. I had been a super-active Foursquare user - with close to 2,000 checkins, and I have not bothered reinstalling it. Why not? For many of the reasons you outline in this post. I feel like I've "done" Foursquare, out of 2k checkins I generated a single glass of wine for my wife at random from a restaurant in Covent Garden, and other than that I have had opprobrium heaped on me from my Facebook contacts that noone cares where I've been. So, all told, Foursquare need to change things up somewhat in order to get me re-engaged - they sent an email yesterday urging me to come back. What would make me come back is more free stuff, put bluntly.

Barry Kirk said...

A related issue is that Foursquare players are basically in the dark about what it takes to earn badges. I can't set my mind on a goal (achieving badge X) if I don't know what behavior is expected of me. One might argue that the "discovery" of what it takes is part of the game, but I think they would do better to create a mix of badges with easily understand achievement tasks and those that are more secretive.

That aside, totally agree with the argument you are making about the overall design of the Foursquare experience, as well as loyalty programs in general. I've often thought that the idea of fixed membership levels is way too limiting. We should take a page from modern game design where such limitations seldom exist -- World of Warcraft continues to add new levels as the most dedicated players master the current ones, and think about how many times Angry Birds has expanded that game to provide new levels of challenge (and pig busting).

Dave Olsen said...

It's interesting that you focus so much on the game aspect of foursquare. I wonder if the real challenge for foursquare is in convincing folks to shift from using foursquare in game mode (e.g. badge, check-ins, mayorships) to using it simply as a discovery tool for local deals a la groupon. When I first tried out foursquare there were few "players" and very few deals near me so I gave up on foursquare pretty early. Re-opening it recently I was shocked to see over 30 deals near me including some at my most frequented restaurants.

It's not the game that should keep you involved but the deals. That's why the types of specials have expanded so much including a loyalty program as opposed to just mayorship deals.

But maybe foursquare have painted themselves into a corner with the gamification.

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