Many are calling Foursquare the new Twitter of the social media world.  And while the location-based social network is relatively new it does offer powerful marketing potential to businesses.

Foursquare is part city guide, part friend finder, part virtual game using GPS through your phone.  The free service, available for the iPhone, Blackberry, Android and Palm Pre, encourages people to keep up with where their friends go, explore neighborhoods and discover new places— including restaurants, bars, stores, etc.

If you aren’t already playing, the game gives you points for every location check-in and whoever has checked into the same venue the most is crowned Mayor— that is until someone takes over your coveted throne.

The more adventuresome the Foursquare user, the more points you earn along with unlocking badges for trying new places or returning to the same ones.

The app also allows you to upload tips about the location you’ve visited, including the best menu item to order, great specials or the salesperson gives the best customer service.

And it’s integrated with Twitter, sending automatic check-in updates to your followers and Foursquare friends at the same time—in some cases allowing you to meet up with friends. 

Here’s how it works: 

• Add your friends from Twitter, Facebook, your address book, by name and/or by cell number.
• When you go somewhere, click on places and several nearby businesses will pop up as suggestions. 
• Once you find where you are, click on it.  You can “add a shout” to tell your friends what you’re doing there if you want and click on “Check-in here.  You get +5 points for checking-in at a new venue.
• Under the People tab, you’ll find other Foursquare users in the same location or discover who the Mayor is.  If you return more than anyone else you will become the Mayor… until someone else is more loyal and steals your title.
• If your location isn’t listed, you can add it and earn yourself +5 points.
• You can even add your own tips to other customers: “Ask for Tasha she is the best waitress” “Great fish and chips!”  “2-for-1 margaritas all day Saturday!”  Plus, you can view other people’s tips about places.
• Once you start checking-in to more places with different places, you get more points and start unlocking badges.  There are badges for traveling far away, being a gym rat and even the “Don’t Stop Believin” badge for going to Karaoke one too many times.

And many businesses are getting in the action, offering free specials or discounts to the Mayor or customers who check-in frequently— say three or four times in a month. 

It’s amazing how effective a free coffee or happy hour specials along with a little friendly competition could be for bringing in new business or keeping customers coming back.

Foursquare has an estimated 300,000 users—up from 150,000 reported at the end of 2009.  Estimated demographics from Quantcast.com show 60 percent of the social media network’s users are 18-49, 71 percent are female and 45 percent have a household income of $60,000 to more than $100,000.

TV networks see the potential a partnership has to offer.  Earlier this week Foursquare signed a deal with Bravo, allowing viewers to win prizes and badges for visiting more than 500 Bravo show-related locations including places the Top Chefs eat or the Real Housewives shop.