So what do you need to know about “the next Twitter?” Well, it depends on what kind of business you run. If you operate a brick-and-mortar store, then you probably should be aware of what Foursquare is and what it can do for you. However, if you operate a ecommerce-only storefront, then there is little value to you and your customers.

I’ve been personally using Foursquare for the last three months to figure out what value it might have to my customers.

What is Foursquare?

Foursquare is a location-based application that is installed on a mobile phone with GPS capabilities – like an iPhone, Android phone, or other smart phones. After creating an account and adding friends (it can automatically search Gmail, Facebook, etc. for friends using Foursquare), you use your phone to “check in” at physical locations (venues), like the mall, a grocery store, a nightclub, etc.

So what’s the point? Well, once you check in, the app will tell you which of your friends are  nearby (or even at the same venue). You might find out that a buddy is at the bar next door, and you can meet up with them in person. It also provides you “tips” about the venue you’re at or venues of interest nearby. For example, if you check in at the airport during a trip, there might be a tip about a well-hidden security checkpoint with short lines – or maybe that a particular restaurant has awesome chicken parmigiana. The tips are user-submitted, so some are more useful then others.

After you’ve visited a location more then anyone else in 60 days, you become “mayor” of that location. For the most part, mayor-ship is simply bragging rights among your Foursquare friends. However, some businesses and venues offer discounts, deals, or freebies for mayors. Starbucks, for example, recently announced a discount on Frappuccinos for mayors of Starbucks. Many Carrabba’s Italian Grill locations offer a free dessert to all mayors with an entree purchase. Foursquare offers some tips to businesses looking to offer these specials here.

Finally, there are “badges” you unlock on Foursquare. They don’t do anything or provide you with anything at this point, except for “cred” among Foursquare users. Some badges include “Explorer,” a badge for checking in at 25 different venues, “Bender,” for checking in four nights in a row at any venue, “Super Mayor, ” for being mayor at over 10 venues at one time, and “Swarm,” for checking in to a venue where 50 or more others are also checked in at the same time.

Businesses don’t need to do anything to get their venue listed on Foursquare – when a Foursquare user visits the location for the first time, they can quickly add the location’s name and venue type – and GPS does the job of identifying where the location is.

My Experience

I’ve been using Foursquare and  checking-in as often as I can remember for the past three months. The overall experience has been somewhat entertaining, but I wouldn’t call it much more then a game. It should be noted that I’m using Foursquare in and around Albany, NY – a region with just under a million people living in the greater metro area. Out of the 400 or so contacts I have in Gmail and Facebook, about 6 people I know use Foursquare – extend that to people I follow on Twitter – and I’m at about 20 Foursquare friends (and about half of those live nowhere near me). So far, I’ve never run into any of my real friends at or near a venue while checking into Foursquare. I was able to become mayor at about 12 venues and I’ve unlocked 10 badges since I started using it.

Since I’m using Foursquare in a relatively small city and at the age where not all my friends are social media savvy, I can assume the experience is far different for 20-somethings living in Manhattan with 1200 Facebook friends. However, as much of America doesn’t live in NYC or San Fransisco, the experience will be different depending on where you live. I am a mayor at a local Starbucks, so now that they’ve launched the national Foursquare mayoral discounts, next time I go I’ll be getting my $1.00 off.

The Value For Businesses

If you don’t own a business with a physical location, then you can relax – there’s no need to start managing a Foursquare social media initiative!

If you do operate a brick-and-mortar business, then you might consider offering a mayoral discount to Foursquare visitors. It could help bolster repeat business and bring in . In addition to letting people know who are checking in at your “venue” that there is a special offer – it lets people nearby (it seems like its about 1000 meters) that you have a special too. Thus, I might be at the bookstore across the street from your coffee shop and see that you offer a special to mayors – causing me to come check out your business next.

Additionally, there is some real value in checking out your business’s real-time stats on Foursquare. Once you “claim” a venue as yours, Foursquare will provide analytics on most recent visitors, the time of day people check in, gender breakdown of customers, and more.

It’s been called the next big thing in social media, but I’m still on the fence about geolocation. First, there’s a lot of privacy concerns – will people want everyone knowing where they are all the time. Sure, there’s a small market of users now, but will it get any bigger? Look at all the recent backlash on Facebook’s new privacy policies… Second, the usefulness is limited depending on where you live. Most of small-town America will see absolutely no point in checking into their local bar – they already know everyone there – and can you see Jim Bob offering free coffee to the mayor of the local hole-in-the-wall diner?

I was in the market for insurance as it was, and during the event, I saw some Tweets from Ryan and thought to my self – “Hey, I bet that guy sells insurance.” I direct messaged him on Twitter, and wa-la, we connected by phone the next business day. That was a few weeks ago — and today, I signed my policy papers with him in person.

While he was at the office, I thought about how this was a real-life case study happening in front of our eyes. This was a real example of how Twitter can help you generate word of mouth. If Ryan wasn’t tweeting as @AlbanyInsurance, I never would have connected with him and I’d have signed with a different insurance carrier today.

So I made Ryan a few bucks today – though my new policy did cost me a few.