According to an online study by German TV broadcasters ARD/ZDF, 78% of all German onliners (30.7 million people over the age of 14) are already using the internet on a smartphone. However, for many companies mobile marketing still means only adapting measures known from the desktop internet for mobile usage. Furthermore, the mobile context of use needs to be taken into account, i.e. how to employ technologies such as geo-fencing or beacons in order to exploit mobile touchpoints and to adjust communication to the user’s location.
Mobile is no longer a trend but for many users, it is the primary access to online services. Some experts even forecast that mobile will soon become the norm and desktop will become the exception. Bearing in mind that globally there are already approximately 800 million mobile-only internet users (Cisco), the distribution of smartphones is constantly increasing and new mobile terminal devices such as smartwatches (see trend 3) are on the rise, those predictions only sound reasonable. Most companies are aware by now that marketers can no longer ignore mobile devices. Mobile marketing however, does not only mean delivering a mobile user experience (e.g. through scalable emails or shopping apps with mobile-optimised operation); it is also important to bear in mind the mobile context of use, above all, the location of the customer. Mobile marketing also means location-based marketing.
Geo-fencing, Beacons, Location-based Marketing
The term geo-fencing is inseparably linked to the topic of location-based marketing. In geo-fencing, an invisible fence – e.g. in the form of a WLAN net – is erected around a specific area. When a customer enters this area, he will be detected by the company’s geo-fencing system. The smartphone is located via radio frequency, GPS or in short distances via beacons/bluetooth or WLAN. A pre-requisite is often that the customer has installed an app, enabling communication with the geo-fencing system and that he has agreed that the app can capture his location data. Geo-fencing is very sensible in those deployment scenarios where by entering the geo-fence or within the geo-fence a trigger occurs or offline touchpoints, especially the PoS, are involved (we will provide more details on deployment scenarios later).
Generally, location-based marketing is also possible without geo-fencing.
As long as the location of the customer can be determined, e.g., via an app, whether he is on a highstreet within a geo-fence in front of a PoS or on holiday far away from civilisation. Both could be attention-drawing contexts for marketing and service communication. Location-based marketing without geo-fencing is particularly suited for pull communication where the location of a customer is only retrieved at the moment when he e.g., actively uses an app or opens an email.
According to a current study by Gettings and Goldmedia, 56% of German smartphone users share their location with companies several times per month in order to be able to use location-based services. According to a study by Juniper Research, 56% of users would like to receive location-based offers, e.g., coupons when they are near a PoS.
Consider Mobile Contexts and Triggers
The location of a customer is one of the most important contexts in customer-centred marketing and service communication. Information on the location can serve the context-sensitive adaptation of communication or as triggers. Here are some application examples:
Geo-fencing at the PoS: When a customer enters a geo-fencing area around a PoS, he activates a trigger and then receives a message informing him e.g., about special offers, discounts or events at the PoS. Even (time-limited) coupons which can be redeemed at the PoS are very effective. Truly eye-catching communication also includes other contexts apart from the location (e.g. the weather) as well as the available customer data (e.g. purchase history). “Perfect weather for the beach. The latest swimwear collection of your favourite brand today for 30% less in our shop in 10 XY Street, only 200 yards from where you are now.” The customer experience can be upgraded even more through additional services. Navigate the customer to the PoS via GPS. Offer the option to reserve the promoted products or deliver them if the customer has no time to pick them up. Fix a consultation appointment with a member of staff. Have the products ready for when the customer enters the branch and wants to view his desired item, etc.
Geo-fencing is not limited to the exterior but can also be used indoors (e.g. through Bluetooth beacons or WLAN triangulation) in order to send customers information and offers on products at their locations. “Did you know that clothing from this department has been designed by star designer xyz and is made of 100% pure eco cotton? And even better: if you buy 2 pieces, you get a third one free.” Even the length of stay of the customer at specific locations can provide clues and serve as a trigger.
Event Infos: During events (concerts, sport, expos, conferences, markets, etc.), geo-fencing can be used to provide the customer/visitor information on promotions at the venue or information on the event schedule. “We compliment player XY for his spectacular goal. Learn everything important about his career so far.” “In hall 2, very close to you, our top talk on geo-fencing will start in 5 minutes. There are still seats available.” A very successful case comes from the event venue operator Weser-Ems-Hallen who was able to increase the length of stay of visitors by over 10 minutes per event by using location-based gastronomy referrals.
Interactive Promotional Actions: Geo-fencing can also be used for interactive promotions. E.g., paper chases or location-based games can be organised where participants are rewarded with a voucher or a free product gift. Networked out-of-home media can incite customers to take a closer look (“We have hidden a secret on the poster next to you”) or provide additional information on the promoted products. Even location-based virtual reality applications can be used in a variety of ways. “Did you think there is only construction work going on here? Have a closer look with our VR app. We are building our biggest flagship store here. Come to the opening and experience an exclusive in-store gig by pop star xyz.”
Delivery and Pick-up: Click & collect is one of the most important trends in multi-channel commerce and can effectively be linked to location-based marketing. For example, re-targeting based on products viewed online “We have the following items in stock in our shop in XY Street. Pop in, we have a little surprise for you.” Even pure e-commerce providers can use location-based communication for their service. “Not at home? No problem. Our courier with your order is near you. Agree a meeting place now.”
In-store Navigation: Location-based apps can also be used for in-store navigation. The customer puts the desired items in the shopping basket of his app or in the online shop. When the customer enters the shop, the app directs him to the desired products. This does not necessarily have to be via the quickest route. Instead, it could be recommended to lead the customer past other products which could be interesting for him.
Dynamically Adapt Content: Generally, the following applies to all plausible deployment scenarios: all communicated content should be adapted as much as possible to the customer’s location. A customer who opens a travel app in order to view restaurant recommendations for his trip, expects to receive offers for restaurants near his current location. The displayed content is output when the customer opens the app. However, it is recommended even in geo-fencing-triggered communication to only adapt the content dynamically at the time of use. Only because a customer receives a message near a PoS does not mean that he opens it there. If his location changes between the dispatch time and the opening, this should be taken into consideration. When the customer opens the message, e.g., at home, it would no longer make sense to motivate him to immediately visit the PoS. Instead, you could offer him, for example, to order the products online or have them reserved for his next visit.
Realtime Marketing Automation and Data Centralisation
Location-based marketing and service communication presupposes that a change of location and with it the customer’s context of use is immediately detected and the corresponding communication is triggered. Furthermore, content needs to be adapted to the current location exactly at the time of usage. All processes involved therefore need to be real-time capable. Realtime marketing automation technology is a requirement for successful location-based communication (see trend 2).
Many mobile deployment scenarios integrate online and offline channels. In order to guarantee consistent communication and not e.g., advertise a product via app push which is no longer available at the PoS or which the customer has already bought at another branch, all data sources must be centrally managed and updated in real time. A single customer view at all touchpoints is the pre-condition.
Truly customer-centred communication is no longer possible without including the customer’s location. Geo-fencing for location-based services or communication e.g., in order to direct customers on the highstreet to the nearest PoS or navigate in-store, have become a must-have. After experiments with non-customer-specific services such as beacons, this means a growing investment in truly customer-specific tracking technologies and tracking enabled apps. Furthermore, it is important to adapt content dynamically to the customer’s location at the time of usage in order to take into account changes, time delays in the perception or the context of use. In order to respond in real time to the location (including to changes in location) with the correct marketing and service communication, the speed of the marketing capacity is becoming critical for success. Traditional campaign management with a planning phase is being replaced by real time marketing automation.
ARD & ZDF: ARD/ZDF Online Study
Gartner: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update 2014–2019 White Paper
Gettings & Goldmedia: New study on the use of location based services: LBS-Dienste boomen
Juniper Research: Mobile Coupons: Consumer Engagement, Loyalty & Redemption Strategies 2014-2019