Location-based marketing is expected to enjoy a burst of investment for the foreseeable future – but are brands going to enjoy the benefits?
According to a study from Pinpoint, mobile location marketing is currently used by 83% of media agency professionals and 59% of marketers.
But this field is set to experience a spike in activity in the coming years, with 85% of respondents reporting that they expect their spend to go up in the next three years.
What’s more, some of this investment will be considerable – with 14% suggesting that they expect their spend to more than double before 2019.
However, there is question mark how effective this investment will be, with nearly a third (29%) admitting that mobile location marketing is currently not used to its full potential.
So how can brands ensure that their location-based marketing activities are seating the most value from the investment? Let’s take a look at some of the best practices that your brand should be following.
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Location-based marketing must always be opt-in
Location-based marketing must always be opt-in for the customer. Therefore, after they have downloaded an app, for instance, they must consent to the request to use their device’s current location before the app can start triggering location-based marketing messages.
Of course, this does mean that if users don’t give their consent, the location-based marketing programme is dead before it has even started. Therefore, brands must employ a number of tactics to encourage users to opt-in.
For instance, it is important to choose the right moment to request for a customer’s location. And then, when the request is sent, it should also provide a convincing reason why it is needed and why it will benefit the customer – if it’s a box with “Allow” and “Don’t Allow” it isn’t very persuasive, so provide a friendly explanation of the value of enabling location in the app. If the programme will give the user access to deals, or deliver greater convenience in buying a product or enable them to connect with nearby friends, tell them this.
Finally, brands must be completely transparent about how they will use any information that the customer shares. Winning customer confidence is key, as they won’t buy into location-based marketing if they don’t trust the brand.
Make notifications natural – not creepy
Mobile phones are extremely personal devices, and the danger with location-based marketing is that if it is done badly you can make users feel as if they are being monitored. If they feel their privacy is being invaded, they will opt out of the marketing programme and they will not be back. Therefore, if brands want to capitalise on the customer’s location to offer them a product/service without creeping them out, the wording of the notification will be critical.
For instance, if a geofencing alert is triggered when a customer’s device is in the vicinity of the store, it is better to send a notification that says “We have a buy one, get one free promotion on right now – click for an exclusive coupon”, rather than “Our store is 500 yards away from your current location – why not come and visit”.
Personalise your offers
The standard approach to location-based marketing is to offer a discount or deal when a user is in a particular location. However, brands should consider how they can adopt a more sophisticated approach to make the marketing more meaningful.
For instance, businesses should spend time examining their target audience, study the data, carry out segmentation, and surface insights such as their main interests, their favourite app features and what deals will most resonate with them. This kind of research should underpin all advertising efforts of course, but it’s particularly important with location-based marketing because of the personal nature of the mobile device and the time-sensitivity of the promotion. Brands must get the timing and type of promotion spot on.
This means making the user feel like the message is targeted specifically at them, at precisely the right moment. Even something as simple as using their first name in the message can be more impactful than a generic promotion.
And remember, brands should be offering their most loyal and frequent customers different deals to those that are first-time visitors. This can be achieved by ensuring that location data is used in conjunction with purchase history data. This leads us on to…
Don’t forget to use historical data
While location-based marketing is very much about where a customer is a precise moment in time, it’s worth bearing in mind that it’s not just real-time data that can be valuable. Historical location data should also be used to create an engaging message. This means examining whether the customer has been to this location in the past; how often they’ve been there; and what they have purchased.
All of this information can then inform the best offer for the customer. For instance, based on historical data, if a customer is browsing for champagne in store, they could be sent an offer on tins of caviar that they have previously viewed or purchased that would complement the champagne.
Provide exclusive offers
One way to encourage customers to download an app or opt-in to a location-based marketing programme is to offer promotions and deals that are exclusive to these notifications. Brands should make sure that they promote this fact, to make them feel like they are joining – or are now part of – an exclusive club.
Test your campaign
It’s a good idea to test the water with a pilot project before a full roll-out. For instance, if a brand is thinking of launching a location-based advertising strategy using beacons, it would be wise to run a pilot programme at one or two locations targeting a limited set of customers. They should select a hundred or so customers as part of the test, and ask them about their experiences with the app and how it interacts with the beacons. This will give the business time to fine tune the project and identify any major issues.
Measure and manage
You can’t manage what you don’t measure. So brands should ensure they are using data analytics tools to measure activity such as footfalls, visit frequency and visit recency. All of this will help brands to understand if the campaign is working or if more work is required.
About Neil Davey
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.