Imagine your customer casually driving down your business’ street. Suddenly, a buzzing text alerts them about your fantastic sale of the week on their phone. Now, you’re in their mind, and your store is only a few blocks away. Is it likely that they’ll make the turn and enter?
Location-based mobile marketing is a booming marketing field. With the rise of smartphones, businesses are now able to locate customers on their database when they’re close-by and reach them through text messaging, image, sound and video messaging, and web pop-out ads as they browse the internet nearby. This seems like a winning strategy. But, is it?
What are the benefits of Location-based Mobile Marketing?
Geolocation, which facilitates location-based mobile marketing, allows you to send notifications to your customers (who either have downloaded your app or are linked to you by a third party) when they’re nearby your business. Foot traffic may increase in your store, as proved by Hungry Jack’s successful “Shake & Win” mobile campaign feature, which creatively fostered customer action by having them shake their device within a 1km radius of a Hungry Jack restaurant for a chance to get a prize, and go to the restaurant to claim it within 20 minutes. Also, a simple ‘check-in’ via Facebook guarantees all customers with a menu prize, creating one of the highest ROIs seen in Australia’s fast food sector in the mobile advertisement field. This kind of inventiveness has shown the great potential of location-based mobile marketing, and the success reached by companies such as this one is now a highly coveted one.
Based on specific targeting information and aided by geolocation, a likely customer can also be shown your ad when browsing the web in your area. You can also step up your presence by what in the field is called “geoconquesting,” which involves building a fence around your neighboring competition so that potential customers receive notifications from your store. These notifications may be a flash sale, a coupon, or a simply witty reminder of how great your product is for them. The idea is to put you in their mind at the right time.
Beyond push notifications, geolocation is being used in fascinating ways to analyze consumer behaviors. A study conducted by the Harvard Business Review noted that tracking customers inside the store allowed businesses to calculate the success of sponsoring a local event, find out whether opening an outlet store would affect business in their main stores, and pinpoint problems such as poor store layout, and the need for more staff at certain times of the day to decrease customer checkout wait time. With the right analytics, geolocation can help you understand who your customer is, so you can craft service improvements and offers that apply to them personally, based on their behavior.
What are the cons?
Even though location-based marketing is a promising field for businesses, there is still much to develop in order to make it more reliable in terms of geolocation accuracy, and measuring its success as far as generating sales.
A small-scale survey of 149 people in Europe and the US conducted by Search Engine Land found that Google is, on average, twice as inaccurate in geolocation on a mobile device than on a laptop. Inaccuracies ranged from a few miles off, to being located in the wrong country. The study found only 55% of the subjects were located with zero error, leaving anywhere from 33% to 45% to be false positive/negatives. Even though this is a small study, it raises important questions on the accuracy of geolocation and likelihood of ROI. Measuring success of location-based marketing is still developing, and is something for businesses to carefully discuss with the agency before launching a mobile marketing campaign.
When used unethically, location-based mobile marketing can leave a customer feeling violated with their privacy. It is important to let your customer know that through the use of your app, for example, they will be allowing you to know their location. The information gathered from a customer needs to be used responsibly, and the reward for their trust must be sensible to their needs. Building a relationship with your customer based on transparency is imperative.
Considering the possible inaccuracies of customer location, it seems that the decision to invest in location-based mobile marketing should be made judiciously. It can’t be helped, though, to think of this mobile awakening with a sense of urgency to jump on a ship of innovation everyone seems to be boarding, and otherwise you might be left behind. As the technology of mobile marketing improves and the measurement of its success develops, it is worth thinking how your own business would chime in on this new movement – it might just place your business on the map.