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This week it was announced that social networking site Foursquare would open up to several Australian cities including Melbourne, Sydney and Brisbane. This competitive social networking site encourages people to explore their neighborhoods by giving points as people check in at restaurants, parks or bars and declaring “mayors” of certain locations and handing out badges for accomplishments such as staying out late on a work night.

Already many of Australia’s geek elite have jumped into the Foursquare game including Hive founders Ross Hill and Ned Dwyer, Adioso founder Tom Howard and Atlassian founder Mike Cannon Brookes. But beyond simple fun and games, there are ways for businesses to utilize this social network to gain new and loyal customers.

Loyalty programs are not a new idea, for years we’ve been getting our cards punched for everything from coffees to movie rentals, but now businesses are finding Foursquare as a new way for customers to prove their loyalty. It’s no longer, “show me your card” it’s “let me see how many times you’ve checked in.”

From the Foursquare website:

“(the) iPhone and mobile web app..call attention to venues who offer special treatment to foursquares users. If a foursquare user is at your bar/restaurant, we’ll tell them what they have to do to unlock a free snack or discounted drink. If they happen to be across the street or two blocks away from your venue, we’ll let them know that your business gives special treatment to foursquare users and that they should swing by for a visit.”

It’s kind of hard for a coffee shop to get in on the rich analytics of visitors that a website can, but Foursquare is finding a way to quantify this by telling a store owner where their customer went before and after, who the most loyal customers are, when they come in and how often. It appears Foursqaure is still working out the specifics of their analytics offerings and streamlining how to get offers integrated into the system, but so far it’s showing success. If you’re an Aussie business in a Foursquare town, it may be worth going ahead and making yours one of the first Foursquare discounts in Oz.

It’s a bit of a stranger fit but web startups are also finding a way to fit into the Foursquare game by adding their office location onto the site and letting people declare their visits. It may not be quite so fun if you’re using it like a clock-in punch card and the mayor is the CEO and the only visits are from employees, but for a web startup who is frequently holding small events, having people popping in for visits or entertaining visitors, it almost functions as a guestbook and testament to the cool crowd that circulates through your offices. Take Atlassian for example, who have added their new Darling Harbour-side digs, with rave review from visitor/founder Mike C. about the beer and software.

But before you get too excited and think Foursquare is the answer you’ve always been waiting for and that the viral audience for your flower shop is about to spin out of control, understand the weaknesses still inherent in Foursquare.

First, the audience is still small. Buzz does not necessarily reflect the real number of people using and engaging in a site. For all the talk about Twitter, many people still aren’t into the service and while they may have an account the number of times they have logged into it could be low. The hopes of getting this demographic to actually check in every time they go to and leave a location is a bit unrealistic

Secondly, a lot of Foursquare is still impersonal. For 140 characters, people can squeeze in a lot of love or hate about a restaurant or venue. But a Foursquare check in simply says “John is at Mad Pizza”. The review feature of Foursquare still isn’t entirely hashed out and so people don’t engage in the site the same way as they might Yelp in the US or Yabble in Australia.

Are there any Australian business who are using Foursquare yet? What are some of the inventive ways you have seen Foursquare being used globally?

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