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LocalResponse Taps the Social Web to Help Businesses Draw Customers

by JENNA WORTHAM

Posted on 4/19/2011






When a person checks in or posts to Twitter about a business, LocalResponse can help the business reach out to that person.

Where are you? What are you doing? What are you eating? What are you looking at?

These questions, each posed by social media services — like Foursquare, Twitter, Foodspotting, Path and Instagram — to their users, are a boon to businesses and corporations curious about who their patrons are and what they think about their experience.

LocalResponse, unveiled to the public on Tuesday, intends to give companies an easier way to advertise to the people posting messages and pictures online from and about their businesses.

Nihal Mehta, co-founder and chief executive of the company, which is based in New York, describes the tool as a “social advertising platform” that lets companies sift through the stream of public data to see who their most loyal customers are and send them coupons and messages on Twitter.

“It’s not enough just to show you who is there or using your product anymore,” Mr. Mehta said. “The next step is sending messages back and driving actual customers into the door.”

LocalResponse gathers data in two ways. First, it skims Twitter for public check-ins published to the site from a bevy of location-based mobile services like Foursquare, Gowalla and Yelp that can be integrated with Twitter. But those posts make up only about 5 percent of the site’s data, Mr. Mehta said. The rest is pulled from social media services like Instagram, Path, Color, Yelp, Foodspotting and the like, as well as Twitter posts that have been analyzed using natural-language processing to discern what companies and businesses people are chatting about.

For example, if someone posted a message to Twitter that said “I’m heading to Shake Shack” or posted a picture to Path from Madison Square Garden, LocalResponse would be able to analyze that public information and aggregate it for Shake Shack and Madison Square Garden to see.

LocalResponse then allows businesses access to a dashboard that shows who and where each of those customers are so they can send them a public reply on Twitter to thank them for their patronage or even offer a coupon. LocalResponse also will try to pick out the most influential Twitter users, by showing businesses how many times a mention of their product appears in that person’s feed, as well as using a reputation service like Klout, to help companies decide whom to message.

So far, the company says it has had a positive response: For the last six months, LocalResponse has been running a private beta campaign featuring 2,000 companies. Messages sent through LocalResponse had a 60 percent click-through rate.

Of course, LocalResponse’s service could just amount to extra spam for some Twitter users to wade through. But the company says it will limit the number of times a merchant can message customers as well as offering people the option to opt out of the service altogether.

LocalResponse is intended to be a self-service platform for small businesses and will be free, to a point. Businesses will be able to send around 100 messages, and after that, they will be charged a monthly fee for premium access.

Mr. Mehta says LocalResponse’s first iteration is “the long tail of the service, ideal smaller businesses.” He says the company has plans to introduce other tools to attract larger brands and corporations as well.

LocalResponse grew out of Mr. Mehta’s first company, Buzzd, a location-based city guide that also showed its users what people were saying on Twitter about locations and events nearby. The company gained some traction after it was introduced in 2009 but stalled as competitors, like Foursquare and Gowalla, surpassed it.

In December, Mr. Mehta raised $1.5 million, led by Verizon Venture and Charles River, to help refocus the company.

“We used to compete with Foursquare and now we’re thanking them for all of this inventory that we can monetize,” he said.