Location marketing, sometimes called proximity marketing, is a strategy that sends ads and offers to potential customers based on where they are. It’s a smart way for businesses to reach people when they’re most likely to be interested in their products or services. There are two main ways this marketing technique can identify a customer’s location:
1. GPS Coordinates: Your mobile device’s GPS can show where you are, helping businesses send you relevant offers based on your location.
2. Beacon Technology : These are small devices that use Bluetooth to connect with your phone when you’re in a specific place, like inside a store. Beacons are especially useful in areas where GPS signals might not work well, such as indoors or in dense urban areas.
How Location Data is Collected
The big difference between these two methods lies in how they gather your location data. GPS tracks your location over a broader area, while beacons work over a short distance, like within a store aisle. For example, beacons can send you a coupon when you walk by a particular product in a store.
The Benefits of Location Marketing
One of the key advantages of location-based marketing is its relevance. Traditional ads are often broad and untargeted, hoping to catch your attention, but location-based marketing focuses on delivering highly relevant messages right when they matter most. This means you’re more likely to see ads and offers that actually interest you, rather than something generic.
This type of marketing is especially effective for businesses with physical locations. Imagine you’re pulling into a mall parking lot during a holiday weekend, and you receive a notification from a furniture store about a Presidents’ Day sale. That’s location-based marketing in action—it reaches you at the perfect moment when you’re already near the store and possibly in a buying mood.
Locationased Marketing Isn’t Just for Mobile
While a lot of location-based marketing depends on mobile devices, it’s not the only way it works. Websites like Yelp also use location-based marketing by showing you ads and promotions based on the types of businesses and locations you’ve been searching for on their site. This doesn’t rely on your phone’s GPS but rather on your browsing history and behavior.
Three Main Methods of Location-Based Marketing
Location-based marketing can be broken down into three primary methods. Each targets customers differently, depending on where they are, where they’ve been, or where a brand would like them to go.
1. Geofencing: Reaching You Where You Are
Geofencing uses your current location to deliver ads or notifications. It works through mobile apps that you’ve given permission to track your location. The “fence” in geofencing refers to a virtual boundary set around a specific area, like a store, a neighborhood, or even a specific block. When you enter or leave this area, the app can send you messages.
A practical example of geofencing is Starbucks. If you’re a member of their rewards program, Starbucks might send you a discount for your favorite drink when you’re near one of their cafes. This tactic is designed to encourage you to stop by and make a purchase.
2. Geotargeting: Reaching You Where You’ve Been
Geotargeting is a bit different-it focuses on where you’ve been rather than where you are right now. This method allows marketers to send you content based on your past locations and actions. For example, if you’ve recently visited a restaurant, they might send you a promotion to encourage you to come back.
This method is great for businesses looking to build repeat business. Let’s say a restaurant wants to promote a new brunch menu. They could target customers who visited recently with a special offer, enticing them to return and try the new menu.
3. Geo Conquesting: Getting You to Go Somewhere Else
Geo Conquesting takes location-based marketing to a competitive level by trying to lure you away from a competitor. This strategy sends you offers or ads when you’re near a competitor’s location.
A famous example is Burger King’s “Whopper Detour” campaign. When customers were within 600 feet of a McDonald’s, they received a coupon for a one-cent Whopper. The campaign was hugely successful, with the Burger King app being downloaded over a million times in just a couple of days.
Why Location-Based Marketing Works
There are several reasons why location-based marketing is effective. By sending ads, offers, and information when you’re near a store, businesses can increase foot traffic and improve your shopping experience. This approach not only encourages you to visit the store but also helps build customer loyalty over time.
Another advantage is the insight it provides to marketers. By analyzing where you go and how much time you spend in certain places, businesses can better understand what you’re interested in. This data helps them tailor their marketing strategies to better meet your needs.
Also, the success of location-based marketing is easier to measure compared to other channels. Because the marketing is tied to your mobile device, businesses can track whether you’ve visited a store after receiving an offer, making it easier to see what works and what doesn’t.
The Challenges of Location-Based Marketing
Despite its benefits, location-based marketing does have some challenges. One major hurdle is that it relies on you opting in to location tracking and having the brand’s app installed on your device. If you don’t want to share your location, this type of marketing won’t work.
Privacy is another big concern. While some people appreciate getting relevant offers, others might find it intrusive or even creepy. Marketers need to be careful not to overstep boundaries and must strike a balance between being helpful and respecting your privacy.
Conclusion
Location-based marketing is a powerful tool that allows businesses to connect with you in a more meaningful way. By delivering ads and offers based on where you are or where you’ve been, it makes marketing more relevant and timely. However, like any marketing strategy, it’s important for businesses to use it thoughtfully and with respect for your privacy. When done right, location-based marketing can enhance your shopping experience, providing you with valuable offers just when you need them.
