(I get yelled at a lot when I post something more than a couple of tweets long on Twitter, with people asking for a blog post that consolidates the thoughts. So here is one – let’s see how this goes…)

Location Based Services (LBS) are services that take into account the user’s current location (determined by GPS or similar technologies), and provide information based on this information. They are seen as the next big thing in the mobile applications world, but have so far failed to take off, other than a few check-in services (e.g. those obnoxious Foursquare tweets you see on Twitter).

Location based services haven’t failed so far because they don’t work – there just aren’t any useful LBS offerings that solve any real problem.

Almost every Location based service I have seen is more focused on themselves or vendors, rather than being useful to users – always a bad approach. Every LBS seems to be about ads, giving a heads-up to businesses in the area, advertising the user’s location, to be exploited by others (such as burglers ), or “discounts”.

I talk to a lot of developers in the mobile space – for LBS, they all look at “deal based solutions” in some way or the other. If a product/service doesn’t address a user’s specific needs, then it is bound to eventually fail. “Discounts” are not a need, they are an “opportunity”.

To understand the difference between a user “need” and an “opportunity” that can be serviced by Location Based Services, imagine yourself in an unfamiliar locality, and asking someone for a location or directions. That is a NEED.

You rarely/never go around asking people “where will I get the cheapest toaster” – but could be interested if you saw a hoarding/ad. That is an OPPORTUNITY.

For Location Based Services to succeed, they must address a user’s needs NOW, and opportunities LATER.

An example would be an app that, when run, figures out the location via GPS, then tells them where they are, where the nearest bus-stop or taxi-stand is (and when the next bus or train is expected, and where it will be going), where the nearest restaurants are (based in order of pre-defined preferences), the nearest hospital/doctor, the nearest grocery store, etc.

The important factor here is HONESTY – don’t list restaurants in order of who has paid you the most ad money, but in order of the user’s preferences (vegetarian, preferred price range, suitable for family, serves beer, etc. This will cause the user to trust the app, and TRUST is a pretty major Unique Selling Proposition (USP).

You could still have vendors pay you for ads, but these would be shown against listings (maybe with a DEAL link) to alert the user that while this establishment may not match the defined preferences entirely, it may represent more value for money.

Don’t give in to opportunity-based temptation, such as showing a paid-for listing before one that matches the user’s preference more accurately. Once you gain their trust, users will use the app often and be loyal to it (i.e. The app will be “sticky”), while still providing you a revenue opportunity that will work.

This is a fairly simple example of an LBS app, and I can think of many others, and I am sure so can you, and if they follow the same guidelines (service a user’s NEED without compromise), they would represent Location Based Services that would succeed.