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Location-based marketing: the digital trend to embrace in 2014

2014 will see the rise of location-based marketing actions to connect with consumers. Referring to the ability to customize marketing messages based on a prospect’s location and preferences, location-based marketing enables brands to be more contextually relevant.
As location-based services are becoming more precise, huge opportunities are opening up for marketers to really identify their customers through targeted marketing campaigns.
By combining the use of mobile apps and location-based services, marketers are attempting to reach out to their target audience while sending them more personalized content.

To do this, marketers can use:

  • Location-based services (LBS)
  • Near-field communications (NFC)
  • Bluetooth marketing
  • Location-based advertising (LBA)

With these location technologies and 4G LTE connections now available in many cities, location-based services are becoming a reality. Many companies have seen great success from the location-based marketing campaigns and below are examples of our favourite ones.

The first company to reward customers for checking-in in its stores was Starbucks. As a pioneer in the location and check-in based campaigns, Starbucks used an experimental Foursquare loyalty program offering discount to customers and therefore merging the digital with the physical. Moreover, as Foursquare offers a free-marketing value, users had the possibility to share on multiple social networks their check-in at the Starbucks venues.

In the UK, Subway launched a location-based marketing campaign called «You Are Here», which targeted users within close proximity to a Subway. The campaign was part of the “O2 More” location-based texting service that enabled customers to receive MMS messages alerting them to special discounts as they were walking by a Subway location. This brilliant LBS technology worked in conjunction with ‘geo-fences’ that were set up around Subway Stores. In this respect, customer who entered the target area automatically received a promotional MMS message.

Similarly, Bulmers partnered with O2 using location-based services to encourage customers to try the brand’s cider in their nearest pub. When O2 subscribers fitting Bulmers target demographic walked past these areas, a MMS message was sent to consumers to inform 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 redirecting them through www.useyourlocal.com to the nearest pub; while approximately 25% of them bought Bulmers at the pub they received the message for.

To ensure the success of location-based marketing campaigns, marketers have to make sure they are interrupting their mobile customers to add value to their day and not to disrupt it. Indeed, it is absolutely mandatory that the messages being sent to users throughout a location-based marketing campaign are adding value for the user in order to avoid turning location-based offers into spam and consequently frustrate customers.

The key is consequently to send relevant information to consumers based on their preferences and behavior. To do so it is recommended to analyze customer’s habits within the app, as well as from other channels, in order to collect as much feedback as possible. If the targeted messages are right it terms of time, location and preferences, they will inevitably lead to higher conversions. Segmenting your customer’s database according to user preferences is therefore essential.

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