Imagine, you walk into a store, upon going through the doorway, your phone buzzes. You pull it out and see a text message with a mobile coupon sent from the retailer whose store you have just entered. If you own a smartphone, there’s a good chance this has happened to you. This isn’t a coincidence, it’s location based marketing. Thanks to advances in mobile technology, stores can send deals to customers when they’re most valuable because they know where their customers are. Here’s a closer look at location based marketing and what it means for you as a small business owner.
How it works
Beacons are what make location based marketing possible. Retailers pay a fee to use beacon technology in their stores. Beacons work by emitting a low powered radio transmission with a very limited range. When a smartphone comes within range of that beacon, it triggers some kind of message. Larger retailers who have their own app might send a push notification via the app. Any smartphone users who have the app will receive a notification. More commonly, location based marketing is used with text message marketing as most small businesses don’t have their own app. In that case, any customers who’ve opted in to receive that particular brand’s texts will receive one upon coming within range of the beacon.
Why it works
Coupons sent via mobile channels are typically much more effective than coupons sent via email and regular mail. Mobile coupons don’t need to be printed or clipped out. Shoppers need only bring their phone with them to the store, which they do already anyways. The difficulty is getting the mobile customer to the store to redeem the coupon.
With location based marketing, you don’t have that problem. Not only will the shopper have their phone, they’re already at that store. In one study, shoppers who received a beacon message were 19 times as likely to take advantage of a sale or coupon as those who didn’t receive a beacon message. It’s apparent that location based marketing is extremely effective.
Is it wrong?
Not surprisingly, there have been some concerns raised about location based marketing. Any time brands are collecting data about their customer base and using that data to boost sales, people are wary. For business owners worried about the morality of location based marketing, here are some things to keep in mind.
Shoppers consent to it. Whether you’re using push notifications through a mobile app or text messages, only shoppers who’ve consented will receive those messages. Customers choose to download a retailer’s app and they can choose whether they want to share location data with that app. Shoppers who receive text messages must first opt in to be added to the texting list.
Finally, merchants aren’t the only ones who benefit from it. In most cases, shoppers are visiting a retailer with intent to purchase anyways, location based marketing enables them to find out about special deals they wouldn’t have been aware of otherwise. So for those that are concerned big brother is watching, take comfort in the fact that he’s just trying to help you save while you shop.