A top priority for many organizations today is developing a strong social media presence that provides a return on investment. One issue that many organizations face is that, while social media is a fantastic way to build brand loyalty, it can become time-consuming and not have an immediate impact on the bottom line. Facebook fan pages are excellent sources for interacting with customers, but unless a staff member knows how to use FBML (Facebook Markup Language), most fan pages look bland and have a difficult time garnering enough traffic to merit the investment. Most organizations are developing social media strategies, but are constantly plagued with the question, “How can we leverage these tools to drive business?”

Location-based networking is the latest trend in social media and provides a wealth of opportunities for business and consumers to interact. The company currently leading the charge with location-based networking is Foursquare. The premise behind Foursquare is to turn everyday experiences into an adventure where users “check in” at various stops throughout their day and share their experiences. This can be excellent for businesses because Foursquare users can see other users’ reviews, and favorable feedback can lead to new customers.

One of the ways in which FourSquare encourages participation is by providing its users with badges as they explore their world. Badges are an effective way to motivate users to stay active on Foursquare and receive rewards for participation. Here are some of the common badges and how they are earned:

Here are some examples of how organizations are leveraging badges to their advantage:

Seeing the success that Starbucks has had with their badge, many organizations would like to offer a custom badge for their own location. Unfortunately, Foursquare is very selective about which companies are allowed to create their own badges, but the software company Osnapz has developed an application that allows companies to create their own custom badges. These third-party badges can be seamlessly integrated with Foursquare. The custom badges are a great strategy to target younger generations with promotions, discounts and upcoming events.

Rewarding customers is a high priority for most organizations, and Foursquare provides an opportunity to recognize the most loyal patrons. The person who has checked in at a specific location the most times in the last 60 days is considered the “mayor.” In response, many companies have offered 20-percent-off coupons and free appetizers as a way of thanking their most frequent visitors.

Foursquare Stats is an analytics tool developed to enable businesses to identify and connect with their top customers. Business owners who have claimed their venue on Foursquare can run promotions aimed at their top users, create a special campaign for a targeted number of check-ins and discover additional demographic information about their customers.

A failed attempt to acquire Foursquare earlier this year resulted in Facebook developing its own location-based platform, Facebook Places. The goal of Places is to integrate with fan pages so Facebook users can locate their friends and stay current with developments in their networks. Minor technical issues and privacy concerns have dampened the release of a promising product. The largest concern over Places is the ability of an individual to check in one’s friends—in addition to themselves—at a location. Facebook has answered this concern by sending an automated message to friends asking their permission to be checked in. If the friend does not wish to be checked in at the location, he or she needs to select the “not now” option.

It’s quite possible that location-based networking tools like Foursquare and Places will be as common as logging into an email account within a few years. With its potential to drive business, location-based networking should be strongly considered by organizational leaders who are looking for a social media tool that can have an immediate impact on the bottom line. iBi

Eric Osterman is a senior digital strategist at Hult Fritz Matuszak and the founder of CI Social Networking.