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Frequent flyer programs encourage repeat patronage of an airline by offering social status, improved service and benefits, and free trips over time. Achievements encourage purchases of more Xbox games more frequently by offering a record of accomplishments and a way to share and validate them among friends and competitors.
If a game like Foursquare operates like a loyalty program, what target does it serve? To what lord does Foursquare pledge fealty?
Some argue that social media services like Foursquare and Gowalla turn ordinary life itself into a game, so everyday practice itself must be the system the loyalty program serves. But I'm unconvinced. Loyalty demands choice, and so do games.
Instead, Foursquare and Gowalla are self-referential loyalty programs. They encourage loyalty to themselves.
They compete for user's allegiance to their very implementations of the idea of wrapping playful collection rules around their everyday experiences. And the differences between the services will inevitably decide whose program evokes more auto-fealty.
From the perspective of social value, Foursquare and Gowalla seem to be used among slightly different communities. The former skews toward younger stateside urban hipsters, while the latter has expanded into a broader international community.
It seems clear that the social value of participation is more readymade among Foursquare's audience, since they are more likely to be concerned with building social status around going out in the first place. Just as Williamsburg hipsters are unlikely to be impressed by my Delta Medallion status, so I am unlikely to care about their Foursquare accomplishments.
From the perspective of service value, Foursquare provides something approaching a game, one with rules and accomplishments that require non-trivial effort. But the mayorship concept severely limits the service's ability to construct a sense of usable loyalty. Imagine if each airport offered only one flyer good service. The fact is, a regular at a bar is more likely to get a free pour thanks to being a regular, not on account of her make-believe Foursquare status.
What's happened is clear. Foursquare has confused two targets of its users' loyalty: that extended to the establishments that serve as locations in the service, and that extended to the service itself. Instead of check-ins and mayorship, features like user tips and badges are more credible grounds for loyalty.
And of those, only badges offer the designed experience that service value really requires; tips are crowdsourced from user contributions. That's not all bad, but it's a strange bet to place on product whose only value comes from its ability to offer interestingly coherent slices through the urban landscape. It makes Foursquare feel like a venture-funded experiment in the lifestyle of aggregation.
Perhaps Foursquare and Gowalla represent signals for the future of game-based loyalty programs rather than cultural forces of their own. Any business or industry can learn something from Foursquare's effort to make the discovery of the permutations of a commercial ecosystem the point of an experience, rather than the obstacles that stand in its way.