Is Location-Based Marketing Right for Your Company?

People are on the move, and they want everyone to know about it. With Facebook’s check-ins, Instagram’s geotags, and Foursquare’s 40 million users unlocking badges and checking in millions of times each day, there are more ways than ever before to make your whereabouts known. With the rise of mobile marketing has come location-based marketing where companies are making the most of the ability to share their interactions with locations in real time. But is it worth it to invest the time and money into this marketing strategy?

The difference between location-based marketing and other digital marketing forms is simple. With location-based, insights and data are based on actual consumer activity, not estimations on the perceived interest in a brand (inferred, for instance, through liking the brand’s Facebook page). In knowing the physical whereabouts of your customers you can glean valuable information about their tastes and preferences. It also encourages them to make their whereabouts known to their social media circles when their visiting your store or using your service, generating more buzz around your brand. And when it’s done properly, location based marketing has the potential to improve brand loyalty, enhance customer experience, and encourage repeat sales – qualities crucial to increasing growth and overall brand equity. But how easy is it, really?

THE BREAK-DOWN

Location-based services

Foursquare, Gowalla, Shopkick, Facebook Places

Check-ins: Customers make their whereabouts known to their friends, families, and fans through checking-in to a place directly on Facebook, Foursquare, or another check-in application and sharing it with their network. Check-ins can occur with friends, be accompanied by images, and/or provide commentary about the location.

Geotags: Locations are secondary to an image, typically on Instagram and Facebook, in order to provide location context to the content. Public locations can be searched, bringing up all of the images taken at that specific location.

From the company: When a business’ location is on the move, instead of tracking their customers, their customers need to track them. Popular with food trucks and pop-up shops, this can be done through vocalizing whereabouts on Foursquare, Facebook, and Instagram (as well as other location platforms) for follows to track down.

Location-based advertising

Groupon, Google Places, Urbanspoon, Open Table, Fandango, Yelp

GPS and geo-fence targeting: Marketing in this sense only occurs when customers are in a certain area. This can be in the form of anything from specific banner ads targeted at relevant IP addresses to sending push notifications or text messages to smartphones when people are in certain areas. This kind of advertising eliminates the need for a third party mobile application download, and alerts customers about companies that might previously have been unknown to them.

WHERE IT WORKS

In the past, location-based marketing was only effective when used by companies with brick-and-mortar stores that required an in-person purchase or experience, due to location-based marketing’s reliance on physical locations. However, businesses that thrive on in-store experience but change locations (e.g. pop-up shops, markets, and festivals) can use location-based marketing to drive customers. Location-based marketing is no longer just for companies that are on the move. Even web-based and non-physical companies can develop a locational presence through this type of marketing. For instance, bands are now employing Instagram’s geotagging feature to create a whole new dimension to their brand by showcasing live consumer-sourced imagery while they’re on tour. Additionally, brands with employees on the move are promoting their individual actions in order to reflect the coverage area of the company.

THE PROS

• Gains buzz: When people are sharing that they’re at your business, other people know about it. Friends of customers will be more inclined to question “What’s this?” The more people see your business via social media friends, fans, and followers, the more they’re going to talk about it.
• Creates brand advocates: Have you ever posted about your whereabouts on social media? If so, there’s a chance your friends and fans associate you with that location. Friends and fans will be more likely to ask for a review or will want to know when you’re going next, and rely on a real interpretation of your experience.
• Develops loyalty and draws in customers via promotions and specials: On Foursquare especially, with the badge and point feature, things become competitive. Earning “mayorships” through repetitive check-ins can keep people coming back. Special promotions offered to loyal customers offered based on check-ins can create repeat customers while controlling the influx of visitors through controlling offer times. Additionally, promotions and specials can often draw in customers who wouldn’t normally visit a location.
• Compiles statistics: An underused feature of the location-services and advertising feature is the raw data that can be extracted. By harnessing this data, companies can accurately determine who’s checking in, who sends their check-ins to Facebook and/or Twitter, the average time they’re visiting, and number of visits. When commentary and images are added, businesses can view crucial commentary and reviews.
• Minimal work necessary: Other than setting-up, managing promotions, and keeping a consistency across all platforms, the work load involved in location-based services is minimal and cheap. Location-based advertising requires additional technology, but offers an easy implementation timeline and maintenance procedures.

• Creates conversation and builds community: New involvement on new platforms reaches new people with similar interests. Consumers that rally around a business online foster increased interest and conversations on the same topic. Furthermore, from repeat customers and the information gathered, businesses can strengthen their B2C relationships.

THE CONS

• There are a lot of options: Should you use an app? Rely on Facebook and Twitter? What about text messaging and geo-targeting? Promotions? Badges? Loyalty offers? The options are endless, but this leaves room for creating a strategy tailored to your business.
• The system can be beat: Foursquare abusers = people who check-in to places they aren’t actually at. Live really close to Starbucks and want that loyalty badge? It can be done without leaving the sofa or spending the money. When choosing the right location method, this needs to be taken into consideration.
• Negativity and privacy invasion: People are sharing more and more about themselves on the internet, but that doesn’t mean everyone is comfortable with it. Especially when it comes to gathering statistics, consumers can be wary of personal information being taken without their knowledge.
• It takes some time: Like most marketing campaigns that rely on interaction, introducing a new platform or avenue to communicate with customers takes time. While the adoption of new interactions might immediately attract new customers, loyal customers might be hesitant to change their ways.

GIVE IT A SHOT

Is location-based marketing right for your business? Want some advice on how to get started? Just want to say hi? MintTwist and our overal London ppc agency team would love to have a chat. Feel free to contact us about any and all of your marketing inquiries and needs via hello@minttwist.com.