Mobile geo-marketing is growing at a rapid rate. This growth is driven by applications such as navigation, local search and social networking, as well as the public’s understanding of location-based marketing. With the increasing comfort level of sharing location data, brands are turning to location-based marketing to tap into consumers’ behavior to deliver more timely, personalized mobile experiences.
Geo-marketing comes in a variety of flavors that utilize different technologies depending on how you are communicating with your consumers:
- Geo-Fencing: This method is essentially a “virtual fence” designed to enclose a specific area for a marketing purpose. For example, a retailer can run a geo-fencing campaign where they “fence” in an area around their stores for the purpose of pulling in consumers who are near, but not shopping at their stores. Geo-fencing is not location detection in itself, but the geo-fences you setup—and the business rules you define as to what message to communicate to consumers when they are inside, or outside, those geo-fences—can be leveraged in conjunction with location detection capabilities.
- Broad-Range Location: Some campaigns can leverage general area, such as city or ZIP code, to determine the right message to communicate. For example, an airline simply needs to know the metro area a consumer is closest to in order to personalize offers for flights out of the nearest airport. Location detection in this case does not need to be highly accurate to get the job done, and can generally be supported through most any mobile interaction.
- Geo-Conquesting: This specific method of geo-targeting allows businesses to capture consumer spend away from competitors. The effectiveness of these campaigns can be further enhanced if the technology partner you are working with can layer on additional data that helps to understand the consumer better, such as third party sources that identify likelihood to purchase certain types of product.
For this article, let’s focus on geo-fencing. What you need to know is that geo-fencing simply needs to be paired up with a location detection technology, such as GPS or carrier network triangulation. Once detected to be inside a geo-fenced area, a brand can then alert potential customers who may not have visited your store otherwise. Retailers can also choose to send information, such as directions to the store, or run hyper-local promotions.
Retailer Takes Geo-Fencing to the Next Level
Belk, the nation’s largest family owned and operated department store, has added geo-fencing to drive in-store traffic and increase revenue across all of their stores by selecting very specific times, like major holidays (Easter and Mother’s Day) or sales (Belk Days) to geo-target customers with time sensitive coupons. For example, coupons for 20 percent off between the hours of 9 a.m. to 1 p.m. were sent out to customers who were near a Belk store to act now before the coupon expires. By offering relevant, time-based coupons, Belk has been able to grow their mobile marketing database and target real customers more effectively.
More Data, No Problems
Today, GPS, Wi-Fi and Bluetooth-enabled smartphones are capable of aggregating and sharing huge amounts of data. This data is very helpful for marketers to get a better understanding of their consumers’ behavior and target them in a more relevant manner.
Geo-Fenced data can then be used to see which offers and locations actually attract more customers, and whether that translates into more sales. Other possible metrics include the effectiveness of advertising, how often a customer visits the store, and how long they shop for. Additionally, geo-fencing can lead to better customer rewards programs. Once you know where your customers are and how they behave, you can encourage and reward them effortlessly.
Geo-fencing gives the customer a much more personalized interaction with brands by offering them timely, relevant offers via their mobile devices. Although privacy has been a concern in the past, recent surveys show that customers are happy to trade their personal information in favor of receiving special offers —but it needs to be additive, not intrusive. If it’s done right geo-fencing will revolutionize location-based sales and drive customer loyalty.