SoLoMo marketing: Bad buzzword, big opportunity, but how?by
12th Nov 2012
SoLoMo – What is it? What brands are doing it well? How do you do it? Martin Smith gives the lowdown.
So we’re agreed. ‘SoLoMo’ is a horrible acronym. But let’s move along and appreciate Social Local Mobile for the potentially revolutionary concept it represents. In fact, ignore it at your peril - it’s probably the next big thing in brand and customer engagement.
That “SoLoMo” is clearly something of a bandwagon is irrelevant because there are many companies already delivering uniquely SoLoMo engagement. And many consumers say they appreciate it. In fact, 80% of mobile internet users indicate they would actually prefer location- based ads to non-geographically targeted ones.
So what is SoLoMo exactly?
Quite simply, it’s an approach to permission-based direct marketing that allows brands to take advantage of today’s smartphone culture to present targeted and location-aware mobile marketing and advertising content that’s optimised for social sharing. You can think of SoLoMo as a relevance multiplier for the organisation, allowing brands to seek contextually relevant engagement with consumers - simultaneously in the digital and real world. It’s about offering a consistent and engaging experience that ties a consumer’s physical location with a digital dimension presented via mobile.
You see an advert in a magazine with a QR code (Quick Response Code). You scan it and are invited to download the brand’s new mobile app and register. Your registration is submitted to the brand’s marketing datamart which cross-checks your address in real-time and recognises you are an existing customer. Your mobile number and a record of the app installation is matched to your existing records in the brand’s datamart, where your declared and inferred preferences and communications channel choices are held.
A week later, you happen to be within walking distance of a local retail outlet that stocks the brand. You receive a push notification via the app, informing you of a sale on the brand at the store. You visit the store and maybe you make a purchase. If you do, then a few days later, you receive an email with recommended accessories for your recent purchase and an invitation to post a product review, with links to share your feedback via social media encouraged perhaps by the chance to earn loyalty points or further discounts towards future purchases.
This is a realistic scenario and is based on the known behaviour of an increasing number of shoppers. Research from digital marketing agency Agent Media suggests that:
- 84% of smartphone owners use them to enhance their shopping experience.
- 54% of people using mobile while shopping have scanned a QR code.
- Half of mobile shoppers share their shopping experience on social networks.
Why SoLoMo? Why now?
The growth in the use of smartphones and tablets is relentless. Consider the facts:
- February 2012 data from Nielsen reveals that smartphone adoption in the US has reached nearly 50 per cent of mobile subscribers.
- A May 2012 YouGov survey found 47% of UK mobile phone users now have a smartphone. They expect that number to hit over 55% by the same time next year.
- Leading internet technology company comScore says there were just over 28 million UK smartphone users by May 2012 (3-month average), a year-on-year increase of 38%.
Clearly, such high adoption rates in smartphones and tablets provide marketers with a great opportunity to converse with consumers via their platform of choice – with highly relevant, location-based communications that are highly engaging.
Forrester Research reveals that in 2011, 40% of marketers used some type of mobile marketing – 35% planned to incorporate it within the next year and 30% have optimised their email campaigns for mobile. Unsurprisingly, indicators suggest that a large part of your marketing budget will likely be dedicated to location-based engagement (LBE) activities five years from now.
Who is already using SoLoMo techniques successfully?
Starbucks could be considered one of the early adopters of SoLoMo, with its Foursquare discount programme which is still one of the most popular applications on the web. The programme rewards long-term customer loyalty by offering special discounts to customers who achieve ‘Mayor‘ status.
American Express recently ran a unique SoLoMo programme to support local, small businesses. Shoppers linked their AmEx card to a Foursquare account and ‘checked-in ‘at local business locations to receive cash back onto their AmEx cards. Local merchants received additional exposure on Twitter, Facebook, and Foursquare and shoppers were rewarded for the behaviour.
The casino industry is also rapidly moving towards a location-based engagement model. Many casinos already leverage sophisticated algorithms for offer optimisation which reward gamers who “check-in” using a loyalty or rewards card. But, in the future, you’ll likely just need to opt-in to location-based offers on your mobile device which would activate based on your location in the casino. So you walk into one casino and receive an offer for a discounted buffet or a free entry into a slot machine tournament and walk across the street for a completely different set of offers. Since these offers are digital and local, they can be dynamically personalised based on actual user behaviour inside the casino- and the casinos can maximise profitability by delivering just the right combination of offers based on customer status. Clearly high street retailers won’t be far behind.
Today, the SoLoMo approach is largely being applied successfully with large, well-known B2C brands and Coca-Cola and Nike are two more investing in the area. However, leveraging benefits from SoLoMo doesn’t demand a massive investment for an organisation and experimenting and extending into SoLoMo is accessible to mid-tier brands also.
Integrating SoLoMo into the business
You don’t have to be the largest brand with seemingly unlimited resources to engage in SoLoMo initiatives. It’s simply about collecting data, pushing relevant offers through permission based channels and optimising the digital experience in the real world.
Crucially, SoLoMo only works if an organisation is delivering a consistent customer experience at every possible interaction with a brand. SoLoMo is about initiating this activity in a location-based context, or extending conversations to include the location dimension. Everything needs to be cross-channel consistent and one-to-one personalised for relevance or consumers will become confused and frustrated, undermining rapport and loyalty. Ignore the need for cross-channel consistency and behavioural relevance and your efforts could both fail to deliver revenue and potentially endanger longer term customer relationships.
How? Making SoLoMo work
In practice, you’ll need a conversational marketing technology platform to collect and analyse cross-channel customer response data and present the most appropriate next offer via the most appropriate channels. Some of the essential capabilities to successfully engaging SoLoMo within your customer marketing strategies include:
- A marketing datamart: A marketing datamart is needed to build a progressive profile of customer engagement to inform data-driven decisions about which offers will resonate with prospects and which opt-in channels are most appropriate for delivery.
- A central offer engine: There must be the capability to develop a centralised offer catalogue and use a real-time recommendation engine that enables a unified offer strategy for steering and guiding individuals at every opportunity of contact. A real-time recommendation engine is a necessary component and should offer advanced simulation abilities to anticipate and prepare for interactions.
- Segmentation and targeting: These initiatives are critical to the success of SoLoMo. Start by targeting individuals who are currently active influencers of the brand. Send unique communications that demonstrate that you noticed and reward them for long-term loyalty and brand advocacy.
- Cross-channel execution: An integrated approach to customer engagement is critical to SoLoMo success. A cross-channel campaign technology should provide the foundation for managing the same consistent campaign and pushing communications out through relevant, customer-specified channels.
- Distributed marketing platform capabilities: The distributed marketing environment can help empower local marketers and enable them to ensure campaigns resonate at a local level, while simultaneously allowing corporate marketing to control brand consistency.
Looking to the future
SoLoMo might not be the most popular buzzword of the decade, but things are shaping up to a present social, local, mobile engagement as a very real phenomenon. Starbucks, AmEx, Coca-Cola, Nike and other large brands are already enjoying the benefits, but mid-size brands can do so too.
With just a handful of business and technology building blocks, you can get started with the basics. Then develop your tactics, measure results and work on improving your skills. As results begin to justify your efforts, then perhaps invest in a more solid approach. But whatever happens, get started. Don’t be left behind.
Martin Smith is head of marketing in the UK at marketing automation software firm Neolane. The topics in this article are covered in more detail in Neolane’s white paper SoLoMo Marketing: From Concept to Practice.
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