Foursquare, Amex Partner On Offer Program At SXSW

Looking to add value for both consumers and merchants, Foursquare and American Express have partnered on a pilot program running at South by Southwest Interactive that allows participating card members to redeem offers without coupons or codes, or showing their smartphones to cashiers.

The test-run, which began Friday and ends on Tuesday, lets SXSWi attendees and residents of host city Austin, Texas, link their personal American Express Card accounts to their Foursquare profiles. Following completion of the pilot program, the two companies plan an official, broader rollout in the coming months. A more definite timeframe is not yet available, according to executives at both companies.

"We wanted to start to show merchants, and industry as a whole, how to add to the value of their offline advertising," Tristan Walker, director of business development at Foursquare, told InformationWeek.

American Express partly builds customer loyalty via its "member since" date, which appears on consumer's cards, he said. Likewise, Foursquare's service encourages loyalty by tracking the length of time a customer has visited a particular retailer, restaurant, or other location, he said.

"We're really trying to recreate for our users this appeal to socialize and evangelize their loyalty to [a] place. Foursquare wants to designate this 'regular' and have this really strong appeal to place, much like AmEx has done this with their card holders," Walker said. "It's a true match made in heaven."

The two companies also expect they could each generate some new clients, based on each of their established bases. By Friday morning, Foursquare already had attracted some American Express cardholders to its service, Walker said. Likewise, American Express expects some Foursquare users to consider applying for its card after learning about the promotion, Dave Wolf, vice president of global marketing capabilities, told InformationWeek.

After linking their cards and profiles, users automatically can redeem Foursquare specials by loading them to their AmEx cards within the new American Expressnew Smart Offer APIs, then using the card at participating merchants' locations. These American Express APIs receive notifications, so whenever enrolled card members pay with their AmEx card, they get a message alerting them about issuance of a statement credit. This step eliminates the need for merchants to train cashiers in offer-redemption procedures, and also allows them to more easily measure the success of their location-based marketing efforts, according to American Express.

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The financial services firm had used APIs in the past for other merchant programs, but this is the first time it has used its Smart Offer API with a third-party partner, the company said. American Express has a closed loop of information generated by its cardholders, merchants, and the transactions themselves, Wolf said.

"In general, American Express needs to go where our card members and our merchants are. More and more they're using social media, and more and more they're using Foursquare," he said. "These APIs are a way in which we can share information across platforms. It's how we can link an American Express card member to a Foursquare profile."

To promote the pilot, people who link their American Express and Foursquare accounts will get a "Spend $5, Get $5" special at more than 60 Austin merchants. After checking in and viewing the special, card members can tap "Load to Card" within Foursquare, then receive a statement credit of $5 within three to five days of spending at least $5 at a participating outlet.

American Express is sponsoring this promotion during the pilot, but the company is considering how and what it will eventually offer merchants when the service does roll-out nationally -- and, potentially, internationally, said Wolf. Because the partnership will generate information such as the amount of each transaction, the number of times each card member visits a merchant, and other data, American Express can determine the impact Foursquare and the deals are having on consumers, he said.

"Because it is all coupon-less, we're able to link someone's digital behavior to their spend behavior," said Wolf. "American Express has funded this offer, but we do think this is such a compelling value proposition that merchants are going to find this incredibly valuable."

Building on Foursquare's badge-based legacy, the first time registered card members use their cards at merchant in Austin during the show, consumers unlock an exclusive badge and American Express donates $1, to a maximum of $20,000, to Grounded in Music, a local non-profit organization.

"Sweet just swiped my Amex at Gingerman -- a beer for me and $1 for Grounded in Music!!!" tweeted Devon Biondi.

Foursquare has been busy in the days before SXSWi: On Tuesday, the company released version 3.0 of its iPhone and Android application, followed a day later by six new specials designed to help businesses run various promotions at their venues.

This marks Foursquare's third SXSW show. Since then, the company has grown from about 5,000 users in its first year to almost 7.5 million users today, said co-founder Dennis Crowley. In 2010, the company enabled nearly 500,000 check-ins, he said.