Businesses of all sizes are constantly bombarded with advice to jump on the social networking bandwagon, with one of the newest ideas being location-based networking, where you connect with people based around where they are at a particular moment.  But what do these services offer to SMEs in particular and how can they use it to connect with customers in their local area?

Foursquare and Facebook Places are perhaps the best known examples of ‘local social’ to arrive relatively recently, and for SMEs this means that traffic hasn’t been monopolised by big brands yet.  Foursquare now has over 10 million users, and has more than doubled in size since Facebook launched its competitor ‘Places’ feature less than a year ago.

The idea is that it’s a very social thing to let people know where you are, where you have been and what you’ve been doing while you are there, and the ability of smartphones in particular to deliver marketing messages to people as they ‘check-in’ and announce their arrival at new places is a very powerful service.

How does it work?

In most cases, a social check-in involves logging onto Foursquare or Facebook on the web or via an app, which then uses the GPS capability of your smartphone to identify your location.  You are then presented with a list of nearby places - you choose your precise location from the list and the service tells all your friends and followers what you are up to.  Businesses who run campaigns to target local social users create special offers for people who visit their outlets, and they are presented to them as they check-in.

It’s popular, but compared to the impact of social networking in general, local social services are still in their infancy.  For instance, one branch of Starbucks in London has over 1,700 Foursquare checkins (from only 800 people). The London Eye has just over 7,000 Foursquare checkins and a further 55,000 on Facebook - promising numbers but perhaps not the headline grabbing figures we’ve come to expect from social media in general.

There are some high profile brands on board, but what kind of offers are they presenting? The Wetherspoons chain, for example, is a national brand that has enthusiastically promoted Foursquare money-off ‘Specials’ in many of their outlets. Typically, they provide 20% off the price of a food order for the Mayor of the venue - i.e the individual who has checked-in the most to that particular outlet using Foursquare.

Similarly, if you manage to become Foursquare Mayor of Debenhams on Oxford Street you can earn yourself a free coffee every Friday, and London Midland trains have been giving away free return tickets to the Mayor of one of the stations in London where they operate.  There are a whole range of offers out there, but you don’t have to be a major brand or operate a national chain of outlets to get involved.

Smaller businesses - even those based in a single location - should consider this kind of campaign as an opportunity to reach consumers in ways that their competitors haven’t even thought of. To do so, a good strategy should provide a good incentive - without that you’re bound to lose users fast. These ‘Specials’ can evolve to maintain interest, and if you look upon them as loyalty programmes rather than pure customer acquisition campaigns then it becomes easier to see the value.

As Wetherspoons and the other brands have done, users should be encouraged to compete - as you get into the habit of using Foursquare, winning, losing and re-capturing Mayorships is all part of the fun. Group activities also work well - users who gain more by bringing friends to a particular venue are very valuable.

But above all else at the moment, local social networking is still pretty new and brands are still figuring out the best way to exploit it, so don’t expect miracles from the start. On the other hand, campaigns can be established and managed at relatively low cost - traffic hasn’t been monopolised by big brands yet, so smaller businesses should certainly take a look.

Author Farhad Divecha is Director of AccuraCast, a leading SEO, PPC, social and mobile marketing business. For more information, visit www.accuracast.com