Are marketers making the most of location-based services?

Mobile apps help to attract new customers, increase engagement and drive conversions, but this often requires the user to keep coming back.

By combining the use of mobile apps and also location-based services, marketers are able to reach out to their customers to send them more targeted content. 

With GPS technologies becoming more advanced and 4G LTE connections now available in many cities across the UK, location-based services are becoming more precise, which is opening up a huge opportunity for marketers to really pinpoint their customers through targeted marketing campaigns. 

When location services are enabled, they are able to identify where a user is, from the city or town, right through to the restaurant or shop a user is in. This works in a number of ways; from mobile apps and IP addresses, to GPS, telephone masts and 3G or 4G connections.

The strength of connectivity will impact how accurate location services can be, while an individual's sharing settings will impact usability.

There are a lot of companies who have seen great success from the location-based marketing campaigns and below are a few of examples of the favourite ones we have seen.

Many of these campaigns involve setting up geofences in chosen areas; when a customer walks into a geofence, they are able to receive targeted messages from mobile apps, if they have signed up to receive them. 

Location-based campaigns

Hijack

This is one of my favourite location-based marketing campaigns.

Meat Pack, a Guatemalan shoe store, launched their location-based campaign with the intention of stealing customers from competitor stores including Converse and Adidas.

By setting up geofences around each competitor store, Meat Pack was able to target their key audience: people shopping for trainers! 

Every time those who had the Meat Pack app installed their phone entered a competitor store, Meat Pack sent a discount in the form of a countdown timer starting at 99% discount.

With a countdown that reduced by 1% every second, the user then had to run to the nearest Meat Pack store where the timer would stop as soon as they entered, leaving them with whatever discount percentage was still displayed.  

Within one week of the campaign launching, Meat Pack had stolen over 600 shoppers from competitors and one very speedy customer managed to get 89% off a pair of shoes! 

Bulmers and O2

In the UK, Bulmers partnered with O2 to use location-based services to encourage customers to try Bulmers in their nearest pub. Placecast, who offer location-based marketing services, created geofences with a radius of 0.5 miles around over 1000 pubs in the UK that sold Bulmers.

When O2 subscribers fitting Bulmers target demographic walked past these areas, they were sent an MMS message informing them where they could claim their offer on Bulmers cider.

During the four week campaign, more than 50% of recipients clicked the link in the message and around 25% of recipients bought Bulmers at the pub they received the message for, as well as another 53% of recipients who bought Bulmers at another pub. 

Challenges

While location-based marketing offers businesses a the opportunity to really pinpoint their customers, it is not without its challenges and setbacks.

Firstly, there a number of people who turn their location services off, and sometimes their 3G or 4G, to save on battery life or because of privacy concerns.

If there isn't any 3G or 4G, WiFi or GPS connectivity then it is more difficult to detect the location of the user and it may not be as accurate a measurement compared to someone who has all of these features enabled. 

This is why it's important for businesses to remember to include key messaging within the app to remind users to enable their location services and also tell them how and why they should do so.

Some people may have their location services turned off but might enable them for a couple of apps - it is possible for users to choose which apps they choose to turn location services on for, so giving users a gentle nudge at least gives them the option to turn location services on should they want to. 

Research from 2012 shows that around one fifth of mobile users are turning on their location services, with 62% of these respondents planning to use location services at some point in the future. This shows that people are willing to share this type of information, but in return, they expect value. 

Analyse user behaviour

It is absolutely paramount that the messages being sent to users throughout a location-based marketing campaign are adding value for the user. We've seen a few companies getting this wrong recently and that's when location-based offers just turn into spam and users become frustrated.

This bad practice will also give location services a bad name, the messages sent to users need to be thought out thoroughly, as with any other marketing campaign.  

The key to getting these targeted messages right is to analyse user behaviour within the app, as well as from other channels, in order to collect as much feedback as possible. Sending out relevant information to users who are in the perfect location can inevitably lead to higher conversions.

It's essential that businesses segment their database based on user preferences and don't blanket send the same messages to an entire database, unless it is absolutely relevant to each individual user. 

By segmenting a group of users who have all purchased books by a certain author for example, a book shop could then send a discount on the author's next title when anyone in that group of users is nearby the book shop. 

Text or MMS messages, as well as push notifications and in-app messages, are all personal communication channels, and so it's easy to take advantage of these. Business and brands need to ensure they are interrupting their mobile customers to add value to their day, not to disrupt it.