About 8 months ago, we were discussing different app directions and a provocative idea came up: if we could direct traffic to establishments, we could charge those establishments for every person that checked-in.

I’m sure we weren’t the first to come up with such an idea. In fact, it’s an age-old form of marketing. Every week, business’s pay upfront to put their coupon in a local mailer. Potential customers see the coupon, and business’s grade their campaign’s success by tracking every coupon that is redeemed. Pretty basic. What’s fascinating now, is that gps technology allows business’s to more accurately pay for what they want - real customers - with minimal overhead.

With Pay Per Check-In (PPCI), business’s wouldn’t have to risk paying high up-front costs. If no one checks-in using the system, the business pays nothing. If N number of people check-in using the system, the business pays N x R, where R is a previously agreed-upon rate. Payment is made as you go so funding doesn’t have to be upfront. With this model, the business’s risk is dramatically lowered.

In the pay-for-what-you-get sense, PPCI is similar to a real-world version of Adsense. Instead of eyeballs, your currency is people. Instead of online sales, your directing traffic to brick and mortar stores. Foursquare might seem like a close model to this but it tracks/reinforces loyalty much more than it directs traffic.

Imagine teaming up with a promoter in your city to build a nightlife application. You could offer your users (1) the utility of the nightlife schedule on a mobile platform, and (2) drink/food specials for checking-in. Throw in some game mechanics and you have a potential boon promoting the nightlife industry.

So what do you think? Is PPCI the next phase for online to offline sales? Is this a viable pivot for Foursquare to monetize?

Let me know your thoughts,

-Brian

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