Today’s guest post courtesy of Sean Enns, president of Harbour City SEO.

Right now in Canada (and select states across the U.S.A.), people are lining up to take part in donut chain Tim Hortons’ “Roll up the Rim to Win” contest promotion. The Tim Hortons chain is such a category killer in the coffee and donuts space that local coffee shops inevitably feel the drain on their business during the 6 weeks that the campaign runs.

How can local coffee shops compete with a powerful national brand? Well, like David did with Goliath, the secret to battling a giant is to use effective tools at your disposal.

Below are four examples of how local brands can level the playing field with national brands by effectively using Foursquare

What is Foursquare?

Foursquare is one of the many geolocation applications (such as Google Places, Facebook Places, Groupon and Gowalla) that allow users to “check in” to a location or business, letting their followers and friends know where they are and what they’re up to.

The idea is elegant in its simplicity. My phone, like so many others, has a built in GPS system. When I go pretty much anywhere, the various apps I’ve listed ping my location and look for any Points Of Interest (POI) nearby.

If it happens that I’m at the point of interest, when I check in, I automatically notify the POI that I’ve arrived. The idea is that my friends can see where I am, who I’m with and what I’m doing – pretty much all the time. Hundreds of millions of people are doing this right now.

How Does This Help My Local Business?

Admittedly, for some of us, the idea that someone knows what we’re up to at all times may seem like a scene out of 1984. But the reality is that for businesses and customers alike, geolocation services are providing opportunities to connect and offer mutual value in some really new and exciting ways.

While this post focuses on Foursquare strategies, it should be noted that this is a not a “one or the other” world anymore. People use their mobile devices almost instinctively now so they’re just as likely to check in to many different geolocation services if the value is there.

The ways to connect and establish a relationship with your customers are vast and virtually infinite – limited only by your creativity.

Four Promotions Using Foursquare

First of all, if you haven’t done so already, here’s how to list your business on Foursquare.

1. Offer a special deal for the Mayor and other repeat customers

The Foursquare Mayor is the most frequent visitor to your venue over the past 60 days. Since this is likely a repeat customer, and we all know it’s much more effective (and affordable) to keep an existing customer than it is to find a new one, this one’s a no-brainer.

Loyal customers who are treated well will evangelize for you. Customers who aren’t directly rewarded for their loyalty will eventually just go somewhere else.

Competitive advantage: To compete with a national brand that is running a popular promotion, offer a special incentive to the Mayor of your business during the course of the competitor’s campaign.

For example:

March Mayoral Madness – For the month of March, the Foursquare Mayor of Sam’s Coffee gets free coffee, all he or she can drink.

2. Provide something of value to first-time customers

Customers are always looking for the next big deal, so instead of spending your marketing dollars on that radio advertisement, pass it directly to the consumer by providing him or her with an incentive to come through your doors, instead of the doors of your competition.

Competitive advantage: To compete with a national brand that is running a popular promotion, honor the coupons/prizes of your competitor’s contest.

For example:

Bring in your “free coffee” coupon from Tim Hortons and Sam’s Coffee will give you a free, premium coffee of your choice.

3. Offer “flash” specials

While some promotions such as direct mail and coupons are good for long term specials, there’s nothing like a flash deal to get people motivated to act right now. Flash deals are quick deals that are only good for a short period of time — maybe an hour or less.

Competitive advantage: To compete with a national brand that is running a popular promotion, offer an even better, limited-time flash promotion.

For example:

Check in and win – Pick random half-hour periods every day of the competitor’s promotion where all regular coffees are free. All people have to do is check in.

4. Encourage multiple checkins

If there was ever a reason to rally your posse for a group outing, it’s for the possibility of group savings. Offer groups of people who check in together special savings.

Competitive advantage: To compete with a national brand that is running a popular promotion, make your offer resonate with activities your target audience may have done at your competitor’s business.

For example:

Have your coffee klatch this week at Sam’s Coffee. Check in with a group of four people or more and receive 20% off your entire order.

Think Local

The best parts about Foursquare and services like it is that they are completely free, and they allow you to test your promotions in real time before buying a costly ad space in the local newspaper or radio.

It’s true that it takes time and a willingness to participate, but the benefits of connecting with customers in such a direct way provides a real advantage over national brands that don’t necessarily “think local.”

Have you been successful going against national brands in your local market? Let is know by leaving a comment below.

[Image credit: Fried Dough]