Location-based marketing involves both offline and online business tactics to help plan and implement activities based on the geographic location of the customers. Assessing the geographical location also requires accurate information and customer data to the highly-targeted audience.
Small businesses have a lower reach yet are battling out with the biggest competitors, and with the intensity of competition increasing, it will benefit them to communicate with the customers who are looking at the competitors’ offerings. In this scenario, a location-based marketing tactic like geo-conquesting can be used to update the customers on the various offers in a particular area.
Whole foods conquered the formula of geolocation to grow the conversion rate. Earlier customers used to click on their ads but weren’t converting. But with Geopositioning, they were able to hit a conversion rate of about 47% which was outstanding as per industry standards,
What is Location-based Marketing?
Also known as Geo-marketing, this concept is not new because businesses have always understood how valuable it is to target their products based on where the customers are located. Direct mailers to customers are still sent by the traditional companies when they know they belong to their targeted location.
But today’s geo-marketing activities have evolved, and newer strategies are overtaking the traditional strategy. With the use of beacon technology, any retail store could send a targeted message to anyone who is walking past their business area. The technology also can spot the walk-ins and also send these walk-ins relevant messages concerning offers and discounts. With time, location-based marketing is going to become more efficient with more technology-infused, and customer’s trust gained.
Types of Location-based Marketing
This can take many forms, and if you are a small business catering to only one or two areas, then it might be beneficial to target. If you have only one location to serve yet have a broader spectrum of services due to its delivery or phone services.
Location-based Offline Marketing
The location-based marketing activities can be applied to many offline activities like
- Hosting a community or location-specific event for benefitting the target customer of that area.
- Postcard marketing for a particular area.
- Putting up a bulletin board in a store or a business area that showcases local customers using custom hashtags.
Location-based Online Marketing
Online marketing has made location marketing even more powerful. Social media platforms like Facebook and Instagram allow you and your followers to use location tags. In your Facebook page, you can use location tags to inform people of your business and the location it serves. With location hashtags and custom hashtags, on your Instagram and Twitter handles can be used to tie your business with local areas so that the number of people discovers it.
The trick involving location-based marketing is to get customers to share their location somehow. Statistics given below will strengthen every marketer’s views on location-based marketing
- Two-thirds of marketers make use of location data for targeting ads and promotions, and nearly half for location-based offers.
- More than 8 out of 10 marketers say location-based advertising and marketing fashioned growth in their customer base (85%), higher comeback rates (83%), and higher customer commitment (83%).
- With location data, the marketers also gained a deeper understanding of their customers’ needs and interests (77%), enhanced ROI for their promotion and ad promotions (74%), and augmented lift (70%).
5 Ways SMBs Can Enhance Location-based Mobile Marketing
- Ensure your business is registered in local and search engine directories like Yahoo, Google, and Bing. These features have built-in map services that are used by customers to find local businesses. Customers can easily find out more about your business using these tools.
- Coupons can drive customers to you and your store. You can target deals to customers who are searching for things nearby on their phones. Services such as Group on and Living Social help the customer search for deals specific to their area and lets them take complete advantage of it.
- With the help of SMS marketing, one can present their deals in front of the customer using GPS technology.
- Social media sites such as Facebook can leverage social media accounts for your customers to promote your brand.
- Online reviews also are a good way too. Consumers usually look for recommendations for the best product or service. When a potential customer uses their smartphone to find local businesses, they are more likely to browse reviews on different platforms like Google or Bing.
Examples of SMEs Using Geo-positioning
- App-based online payment for Van Leuween
This New York ice cream store gives customers the option to pay via their smartphones. Van Leuween tracks the location of the target customer via the PayPal app. The marketing campaign required customers to install the app on their mobiles. The app then uses geolocation to detect when the consumer was near the ice-cream store and immediately send messages to the customer telling about their offers and discounts.
- Whole Foods uses geofences
Last year, Whole Foods partnered with a marketing firm Thinknear to improve the post-click conversion rate for its advertisements. The supermarket chain of stores used the firm’s ability to place different geofences around its stores located in different areas and targeted customers with offers if they were near the store. This campaign was extremely profitable for Wholefoods, and they managed to secure a click rate of 4.69%, which was more than the national average of 1.43%.
- Gas Buddy shows the power of crowdsourcing
This popular mobile app helps customers get the best gas prices in their local areas using crowdsourced data. Gas Buddy allows the user to share their location and also inform them about the rates that they are paying for gas. The app then allows the customers to view different prices of gases available in their locality, especially where the others have received a better deal. Gas buddy has become highly popular and has resulted in more than 52 million downloads.
These businesses were focussed on specific locations, yet they have made the best use of location-based marketing tools.
Which Businesses Can Benefit the Most from Location-Based Marketing?
Auto dealers can benefit hugely from geo-conquesting, which will help them capture competition share as well. Their reach towards customers who can pay well for their cars and services can be traced through it.
Travel and tourism industry: This industry can successfully use geo-targeted campaigns to convince customers to visit a spot that is profitable to them. The customer might plan to go somewhere else, but with a geolocation-based campaign, brands might be able to position their products better to convince them.
Ecommerce companies: Marketers at e-commerce companies and consumer-packaged companies can also use location-based marketing to drive traffic from their competitors, online and offline, to their outlets, garnering better business numbers.
What is the Future of Location-based Marketing?
The future of location-based marketing is based on three significant elements, namely, regulation, attribution, and propagation of new data sources. Addressable Geo-Fencing technology, gives you the power to precisely target at the household level, at scale, which is a huge step forward towards the goal of one-on-one targeting.
Marketers will continue to target location-based marketing due to its effectiveness. These changes present new opportunities for small businesses to succeed.