Location-based marketing provides customers with the exact information that they need on a business’s products, events, and more. It not only analyzes customer needs, but also relates them to their location. In this fast-paced age of automation, it is necessary to find a location data marketing strategy that can keep up with demand and apply advertising in the most effective way. We’ll explain how by covering the following topics:
While there are many different ways to handle client information, location-based marketing has been used successfully by many companies around the world to do so in a very specific way. Let’s start with understanding exactly what location data marketing is, and how it utilizes location data to help marketers advise merchants on how to increase their revenue through advertising.
Location-based marketing (LBM) is a marketing tactic that uses geospatial information to profile customers based on their address. This allows marketers to more precisely tailor ads to customers in order to encourage them to purchase relevant products and services in their area.
Marketers have come up with the idea to use location data as a tactic only in about the last twenty or thirty years. But as a concept, this kind of demographic profiling has been around for centuries. A store owner or marketplace seller from the 1500s would get friendly with customers and ask them more about their lives. They would then use this information to suggest merchandise that they believe would fit the customer’s likes and dislikes.
Today, this type of salesmanship is much more difficult to practice. Many stores have thousands of customers in a day, and they are unable to dedicate the time to make these kinds of individual connections. So they rely on strategies such as LBM to understand their client’s needs.
There are many benefits of using location-based data in marketing, but here are five that tend to provide the highest ROI.
When someone steps into your store, it’s important to know what influenced that decision. If you have information that a certain online campaign has brought more customers into the store, then you can create that positive link between online campaigns and in-store interactions. This allows you to directly measure the effectiveness of converting online traffic to offline sales. A great way to do this is with gift cards for an online account. Giving a customer a physical card gives them an incentive to not only visit the store in person, but also to choose your store when shopping online.
If a customer clicks on an advertisement for a product you’re pushing strongly and then later purchases that product in-store, creating that direct link is ideal for studying the influence of online advertising on customers. For example, a customer may be interested in a specific brand of purses, and their browsing history on the company website indicates sustained attention on certain products. So if they drive by later, they might quickly step in to check out the brand that they had browsed earlier.
LBM makes it possible for brands and businesses to capture people’s attention and influence their behaviors in real-time, when they’re simply going about their daily lives and are near stores they have visited online recently.
Anticipating the needs of the customer is a tricky business. But with advancing technology, it's becoming easier to predict when customers will be more likely to appreciate advertisements shown to them.
LBM promises to deliver highly-personalized marketing by using geospatial services that will appropriate foot traffic data to potential customers. This helps businesses understand the right times or places to deploy an ad, based on passerby behavior. It is crucial to not send ads to the wrong people, at the wrong time, in the wrong location, because it could have adverse effects for the brand. Annoyed consumers do not make for happy customers.
While not irritating customers is crucial, so is meeting customer needs in a personalized way. Not every brand appeals to each customer in the same way. LBM can predict that someone who purchases lipstick from a makeup company often is likely to be interested in new lipstick being released by that company in the future. However, that same person would be less likely to be interested in a completely different product being sold by this same makeup company. Why? Because they have no history of buying or searching for it.
LBM delivers relevant ads and messages to consumers that will make them feel more connected to a brand. At the same time, it avoids over-advertising to them and causing irritation.
The problem with marketing is that the company’s or brand’s competitors are doing it too. LBM allows brands and companies to specifically target high-potential customers. The closer they are drawn towards the company or brand, the less likely they are to be drawn away by competition.
In any business, the bottom line is profit. LBM is able to directly drive foot traffic to stores, increase conversion of online traffic to in-store purchases, and substantially drive sales up. While LBM is an investment, it pays off in the end to have a highly strategic, technical, and data-driven marketing and advertising approach.
There are several different approaches to location-based marketing. It is not simply a question of knowing where consumers are, but meeting them there with the ads, offers, and services they need at that moment. This level of detail means location data marketing requires more than just location information, as businesses need to be able to send information that pertains to customers and is more conducive to their needs.
Geofencing uses virtual boundaries to enclose specific areas for analytics or event triggering. In LBM, geofences are used to send ads to devices when they cross a virtual boundary. They are also used to determine how suitable an area is for advertising by measuring how many people pass through it.
Main benefit(s): By using a geofence, a business can measure how long and how often a customer spends time in the location near their store. Then they can offer the customer incentives to visit the store.
Real-world example(s): A bubble tea shop notices that a customer spends 8 hours near their store, 5 days a week. This probably means that they work nearby. The company realizes that if they were to be able to entice this individual into the store, then the person could develop a habit of buying a refreshing drink before or after work, or during their lunch break. They decide to send a virtual coupon to the customer every time they enter the area.
Another example is when a fast food company notices that their competition is taking away a lot of its customers. They decide to create geofences around their competitors’ locations, and offer customers who enter the area virtual coupons to influence them to patronize their business instead.
Geotargeting is the practice of delivering different advertisements to people based on where they are situated. Geofences are often used to deploy geotargeted ads.
Main benefit(s): Meeting consumers where they are with personalized ads, offers, and services is a strong tactic for converting them into customers. Geotargeting can be used near your store locations (or those of your competitors) to encourage consumers to buy your product by keeping your brand front and center in their minds.
Real-world example: A restaurant with its location in downtown Chicago could geotarget ads to anyone using the internet in the city’s urban areas. They would not advertise to people in outer suburbs, because the chances that they will make the trip to visit that restaurant are smaller.
This is a marketing technique to engage the customer while they are in the store. It monitors where customers are walking or standing in the store in real time. Then it sends the customer advertisements of items that are nearby and that they might be interested in.
Main benefit(s): Beaconing engages customers so that they will buy more products that interest them. This could directly increase sales, as the more items that customers find that they are interested in, the higher the total sale when they checkout could be.
Real-world example: A big box retailer can see where consumers are moving throughout their store, and send them ads for nearby products. This increases the likelihood that shoppers will make extra purchases.
Location data marketing may be new and highly technical, but it is very easy to get started with. The steps below will provide anyone looking to get started with a solid plan. They lay out a method that not only allows marketers to use location data, but also makes sure that the client understands how and why the data is being collected.
For example, if a shoe merchant does not have enough foot traffic coming into the store:
Location-based data marketing can raise red flags because of the sensitive nature of the data. It is the responsibility of the marketer to ensure that they are ethical when working with location-based data and follow guidelines to stay within their limits.
