Pushpins on a map denoting user locations

What Marketers Need To Know About Location Based Marketing (LBM)

Ronda Bowen / mobile, trends

Have you ever walked in the downtown area of your city and had your phone go off, notifying you that there’s a special deal at your favorite coffee shop?

This is something known as location-based marketing, or LBM. The popularity of LBM tactics has been picking up, steadily. LBM generally requires that customers opt-in or download an app that then allows them to receive such notifications.

A lot of marketers are excited about this practice, as it allows them to approach their target market when it will count the most – when that potential customer is in the vicinity of the business and is available to make a purchase.

After all, a survey by the Pew Research Center found that 90% of adult smartphone owners who are 18 and older use their phone to get directions or other information based on their current location.

Before trying to make use of LBM, it’s important to keep some things in mind.

90% of adult smartphone owners who are 18 and older use their phone to get directions or other information based on their current location.Click To Tweet

1. The trend toward greater transparency in marketing practices will continue.

A man registering for a user account for a website on his laptopCustomers have been asking for an increased level of transparency in marketing practices. This has bled over into LBM practices.

Thus, it’s important to be upfront about how you will collect location data, how location data is being used, and what role customers will play in data aggregation.

2. Privacy concerns hinder progress.

Consumers are concerned about privacy. In addition to providing transparency about data collection methods, it is vital that those wishing to incorporate LBM practices into their marketing methodology do so with privacy protection in mind.

To sell a consumer on an app that offers special deals based upon what businesses they are in proximity to, you’re first going to need to sell that customer on sharing his or her data with you.

This will be particularly important going forward if you are collecting data from European countries due to the GDPR.

3. Giving incentives for customer data helps build the relationship.

Just like it’s become a common practice for content marketers to offer e-books and other promotions in exchange for reader names and email addresses, it’s important for marketers looking to use LBM as a strategy to offer deals or specials for those opting in.

As more specific and detailed data is collected – like the location an individual is currently occupying – the greater the incentive needs to be.

4. LBM is more than asking customers to check in.

Man with travel bag wearing a blue jacket and holding a mobile phone in his handSure, asking customers to check in using  Foursquare or Instagram or Facebook is a fine strategy, but LBM is much more than that.

While checking in somewhere is still a way to offer targeted marketing, it’s much more useful to marketers to catch a potential customer while he or she is in the proximity.

For example, if there are several eateries in a block radius, but one pops up as having a special offer before the patron has put his or her name in to be seated, then that restaurant has an edge up on the others.

This is even more enticing if the restaurant has remote check-in.

5. Combining LBM with blogging can be powerful.

Once you have some solid analytic data from your LBM efforts, it’s easier to create more meaningful blog posts that target your audience. You’ll know more about the demographic who is using your services or purchasing your products.

You’ll also start to get a handle on which types of coupons and offers are the most successful. Use this information wisely in creating well-crafted content to appeal to those you serve.

6. Context is just as important as location.

Woman sitting on a bench outside while checking texts on mobile phoneSure, you can target your intended audience through LBM, but unless you know that your potential restaurant patron wasn’t just at another restaurant, you could be marketing to someone who is likely to ignore your message.

Thus, it’s important to understand where someone is coming from as well as where that person is going. Contextual data is also important in an overall marketing strategy.

Do customers visit another place just before or after visiting your business? Is there any link between the two businesses?

If so, you may want to consider a partnership incentive that offers a greater value than either business offers on its own.

7. LBM is more than just coupons and offers.

While coupons and offers are a big part of LBM, it’s important to avoid getting into the discount trap. If you offer too many deals, customers won’t come in at any other time. This will then create problems for maintaining your bottom line. Instead, consider solutions that create a positive experience while still engaging your customer.

A while back, Whole Foods had a campaign where they offered a photo contest – customers could take a photograph in front of an outdoor fall display in exchange for a chance to win a gift card.

This created check-ins and geo-location to be used on photographs, allowing the store to collect information about their customers, while also offering an incentive to customers for providing said data.

8. There is still a lot of inaccuracy in the collection of location-based data.

Geofencing and location data still have a ways to go in providing accurate depictions of an individual’s location. Many of the apps and platforms providing information about analytics still provide inaccurate or sketchy information.

While sensors are becoming more precise, user error in check-ins may create skewed data information.

An overhead map of polygons, representing buildings, that is categorized by building heightInnovative companies such as BuildingFootprintUSA with its building-centric data approach have done a great job of improving the accuracy of location data.

This and products like it will open up the door to new and more accurate LBM applications.

9. The call to action is still the impetus to buyer action.

Without providing potential customers with a call to action, you’re just throwing information out there at them. Sure you might offer the best crab cakes around, but unless you also say “come in and order our awesome crab cakes for a special discount,” then you’re not using your LBM strategies to their fullest potential.

It’s one thing to post photos of your crab cakes online and in mobile apps. It’s another thing to ensure that people have the next step in front of them, further motivating them to act.

10. LBM is the next frontier in marketing.

It’s important to be well-versed in LBM, which is looking to be the next frontier in marketing trends. When used correctly, and in conjunction with social media and content, LBM has the potential to produce great results for businesses.

With the success of the check-in and geo-tagging in photos, it seems that the next step is creating apps that allow the targeting of potential customers in a particular geographic location.