Last month during a visit to a Finagle-A-Bagel store in Chestnut Hill, Massachusetts to pick up a check for $25,000 from the Finagle team and their owner, Laura Trust, we got talking about social media, specifically, location-based services.

Finagle was intrigued with Foursquare and how they could use the service to connect with and reward customers at their nine area stores.

The challenge was Finagle’s traditional loyalty program, the Frequent Finagler, which was expensive and it wasn’t social. They were eager to replace it with something better.

With just a bit of guidance from me, Finagle developed a new program that they are testing in a couple stores. Social media, and especially Foursquare, is suddenly central to their loyalty strategy. And while it required extra work to get the program up and running, expenses beyond printing the signage for the stores has been minimal.

You may be asking, “Well, that’s great, Joe. You sold them on Foursquare and helped them get a program up and running. But there’s no mention of cause marketing or even your cause. How do you benefit?”

1. My efforts help me build a stronger tie with a key partner by demonstrating my commitment to our mutual success.
2. Finagle’s new social media platform gives me a potential lab to experiment with location-based cause marketing. A lot of causes want to try social cause marketing, but adoption of some of these services, especially LBS, is very low with many small businesses. Causes need to be more proactive about educating businesses on these new tools and thus creating more initiatives for themselves.
3. Working with Finagle gives me a case study on the opportunity of mobile loyalty programs that I can shop to other businesses. Right now I can use Finagle as an example of a business that saw the value of Foursquare when it came to savings thousands of dollars on a traditional loyalty program. Shortly, I hope to add that the change was successful and that customers are using Foursquare to reap their loyalty rewards.

Have you come up short pitching small businesses on cause marketing? Take a step back and start a dialogue about location-based services and how they could save thousands of dollars on a traditional loyalty program and make it social.

Forget hope of gain or profit. Focus on being useful. Give of yourself freely. Your loss just might be your much greater gain.

Luxury brands like Louis Vuitton, Jimmy Choo and Oscar de la Renta understand the power of location-based services like Foursquare and can show nonprofits how to maximize geo-location and add some bling to their marketing.

Location, location, location. If your nonprofit is a hospital, a museum, an historical site, or a soup kitchen you need to own your location on Foursquare like a luxury brand owns its stores for grand openings and special events. That means encouraging employees, guests and visitors to check-in at your location. Louis Vuitton has over 38,000 friends on Foursquare and takes stores check-ins seriously, like the Foursquare promotion around its London store.

Be a leader. I admire that luxury brands understand they’re just not leaders in luxury, they’re leaders in culture, taste and society as well. Louis Vuitton promoted its store launch in London by incorporating branded tips on what to do. Here’s the tip for London’s Borough’s Market.

Do visit this bustling food market where top London chefs come to buy their ingredients. If you don’t find it here, where will you? Open from Thursday to Saturday, but come early to avoid the crowds!

Why can’t causes be leaders in their respective areas. The Museum of Fine Arts in Boston could leave Foursquare tips on art attractions around the city. Mass General Hospital could leave tips on healthy places to eat, exercise or even walk at lunch. Community Servings, which delivers hot meals to the needy, could offer tips on great bakeries.

Target the masses. The benefit of all these tips outside of your physical location is you get exposure with people the might not have been to the  MFA, seen a doctor at MGH or bought a pie from Community Servings. That’s just what these luxury brands have in mind when they use Foursquare, and they’ve created entry-level products to woo new customers.

Use check-ins to support donor loyalty. Just as luxury brands are active in rewarding customers with special perks when they check-in–like the tickets Marc Jacobs gave away above–nonprofits can use check-ins to thank donors. For example, the Institute of Contemporary Art in Boston could encourage donors via their newsletter to sign-up for Foursquare. The next time they check-in at the ICA they could get free admission to a special exhibit.

Location-based services have become a necessity for luxury brands that want to promote their locations, be a leader, solicit new business and reward the faithful. The opposite is true for nonprofits. They still believe that services like Foursquare are a luxury they can live without.

But this is one instance that causes should splurge.