Geolocation Services: Battle Between Yelp and Foursquare

With everything on the Internet pointing towards mobile in some form or fashion, it only seems logical for online properties to find ways to provide geo-location services. A number of companies such as Gowalla, Loopt and even Facebook with “Places” threw their proverbial hats into this arena recently with limited success but when the smoke cleared, two popular services took control of the space: Foursquare and Yelp.

Interestingly enough, while Foursquare and Yelp started in different directions - the former starting as a geo-location with a side of gamification and the latter as a review service - but as time passed these companies’ services have become quite similar. This recent connection between the two has led to a rivalry of sorts. Since we’re about unity in this space, and with both having their pros and cons, we will explore how each in their present states can live harmoniously in today’s world.
Is checking-in a one-trick pony?

This is a notion I’ve read in some posts online. There is obviously some value in checking-in. If there wasn't, I doubt that so many companies (such as Yelp) would have added the feature, or want to add it or at the very least are trying to add it. Notwithstanding this point, providing a service where checking-in is the only enforceable action will most likely shorten your company’s life cycle to that similar of a fruit fly. There must be something more.

For example, when Foursquare launched they added a point system which added a level of competition—perfect for today’s hyper-connected and competitive society. Yelp decided to emulate (copy is probably  more accurate) this model with the introduction of their check-in service in January of 2010. In addition, both give users the ability to attach pictures, share with Facebook friends and Twitter followers, post tips and gain mayor status and other honorary badges. Given this, I’d suggest Foursquare gets a slight edge in regards to checking-in: 1) for making it popular and “cool” and 2) for extending check-in and its subsequent “rewards” into a product line extending its “cool” factor.

Eventually you're going to need to provide a discount or free service based on check-in status. After awhile even being mayor loses its luster unless some perks come along with the job.

Business perspective: Providing something value added will continue to be a key component for any location-based services.

 The Mobile UX

Finding multiple channels to market to is a great tactic and, in turn, I would advise against a mobile-only experience. For now, at least. Nonetheless, geo-location is inherently mobile—unless you’re planning to walk around with a laptop or a desktop all day. When it comes to the majority of Foursquare’s user experience, it has to be mobile.

mobile growth segments

While Yelp’s mobile experience is, as we mentioned earlier, very similar to that of Foursquare, it does allow you to draft a review of any venue you visited or search online at home and then migrate to mobile as you move about. Some users, however, may feel that not being able to finalize their thoughts from a mobile device is a missed opportunity, especially since reviews are Yelp’s claim to fame. Drafting a review does allow you to get your thoughts on virtual paper though, and you’re less likely to forget anything, good or bad, that took place at the venue. In this case, for its purpose, Yelp will get a slight nod.

Business perspective: The best (and cheapest) advertising your business can find is through current clients. A platform that allows consumers to share their experience will drive even more through your doors.

What's the Deal?

To quickly go back to the idea of checking-in for a moment, let’s think of this situation: I’ve checked in, got my points, got my badge and even possibly became a regular or a mayor. Now what? Why should I continue to check-in besides trying to beat my friends in this game?

lets deal


Both companies have overlaid deal structures with their services: Yelp with their own branded deals; and Foursquare partnering with the likes of Groupon and American Express, most notably on Small Business Saturday. These deals have certainly helped both entities grow. The ability to save a couple of dollars by simply checking into a restaurant, retail store or other place is a more than fair trade off and opens the opportunity to breed brand ambassadorship.

Business perspective: In the deal category, it is Foursquare’s aptness to work with both the venue and third parties to form deals for the user that presents a small advantage.

Content provides engagement and long-term value

There’s no denying this fact—particularly when you’re talking about social media. We all know that engagement is a big deal. Yelp’s platform gives people a chance to submit detailed reviews and, obviously, people can then respond. Furthermore, Yelp’s rating system also extends user engagement thus giving it a leg up on Foursquare in the content realm. Foursquare provides its engagement at a much more mobile level. Although there is no rating system, users can still make comments on venues, leave tips and also comment on people’s check-ins—all forms of engagement that make sense on their platform. Yelp, by design, is the winner in this category. It was built on content, with content and through content.

Business perspective: User engagement is the cornerstone of online and mobile business. The more content you provide the more likely consumers will interact with you. The more they interact, the more likely they are to become customers. Period!

The moral of the story is: Finding what works best for you is what’s most important. Yes, Foursquare and yelp may share much of the same audience, but both sites still have their own unique spaces even though they might not be as disparate as other competitors in other industries. Once you’ve gained the knowledge of both, your decision simply boils down to choice. I use both. How about you?

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  1. I’m glad I read this. I was just thinking of switching from 4Square to yelp because reviews are more important to me than points and badges. Plus, all my 4square check-ins are restaurants anyway.

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