The Hidden Mind

It’s long been the wish of small retailers that they could read the minds of people walking by their store, especially if it allowed them to offer up something that eventually led to a sale. While mind-reading is waiting for full scale development, the next best thing is here today: Location-Based Marketing (LBM). Put succinctly, it allows sellers to deliver targeted offers in real-time based on timing and location. This works best in areas with high foot traffic, large department stores, factory outlet stores, food courts and restaurants.

The Smart Phone Connection

This works since nearly everybody has a smart phone on them, and the on-board standard technology allows a vendor to identify where that phone is located at a given time (i.e. heading towards your store). With that information and the time of day it is possible to send a digital offer to the person via their phone. One example might be if you had a bistro and you want to fill it up at lunchtime you might send a digital coupon for a free basket of bread 15 minutes before the lunch rush and some percentage of people will decide to visit your bistro for lunch because of that offer. Of course you can run the offer for a limited time. Another example might be if you were a shoe store in a professional office/mall mix, you could broadcast an offer for scuff removal and shine for $5 if you’re having a slow day. And you never know, it might lead to a new sale.

Location-based marketing (LBM) is a strategy that delivers targeted messages, offers, or content to consumers based on their real-time or historical geographic location. It connects digital marketing with physical context — enabling businesses to reach audiences when and where they’re most likely to act. It can also be used to establish typical marketing functions by broadcasting a CTA (Call to Action) or trying A versus B offers to test ways to create greater engagement through sound, graphics, or offers.

With all of the location hardware and software available on todays smart phones there are a lot of way to deploy LBM. Here are a few examples:

Technology Limitations

Of course it is important to understand the reach available that each technique can achieve in order to lay out a successful program. The table below shows this information and the technology used to achieve these results. Keep in mind that the accuracy is a function of the data source.

Keeping Score

To measure the effectiveness of your LBM effort, here are some tried and true performance indicators.

Special Considerations

Privacy compliance – The General Data Protection Regulation (GDPR) is the European data protection framework. Similarly the (CCPA) is the California Privacy Protection Agency which protects the data rights of California residents and applies to anybody whose sells digital products to Californians even if the company is located outside of California.

Data integration — It can be complicated to combine Customer Resource Management (CRM) data with Point of Sale (POS) information. CRM is a person and a POS trigger is an event, but it may or may not be correlated. A family phone plan may have four users but only one payer. Information consent may be given for one particular use, but it may end up being used as part of another data set, creating a privacy violation. These are just a few examples, but you get the idea.

Attribution lag — This is a simple issue in the abstract; however, visits or other triggers may happen days after ad exposure, making it harder to declare a positive correlation.

Conclusion

If you have a business which has a potential regional reach or a sector that you understand and you want to bump up the sales traffic, then an LBM approach might be just what you are looking for. A dedicated team with Marketing, IT, and a Graphic Designer that can get the science right, knows the market well and who can translate ideas into designs, can come up with some ideas quickly. With some refinement over a few weeks you can launch a campaign and start making some progress growing your market.

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Small Business Resources welcomes questions from inquiring minds looking to improve their business outcomes using best business practices combined with available technologies. Submit any questions you would like us to explore on your behalf to contact@sbresources.com.