Have you taken a small business up on an offer via your cellphone? You very well might soon, thanks to new efforts to engage customers through location-based mobile technology. Michael Zeto, CEO and founding partner of Atlanta-based Proximus Mobility, is at the forefront this new frontier, dubbed hyper-local proximity marketing. Recently, he talked with business writer Erin McDermott about what small businesses can do with this intriguing new media to increase their revenue.
MZ: Hyper-local proximity marketing is really the distribution of relevant, location-specific advertising and marketing content to consumers’ mobile devices in and around the point of purchase or that critical decision-making moment.
A consumer interacts with a call to action—some signage possibly that says to receive special offers turn on their Bluetooth or WiFi. They do that if it’s not already enabled, and in most cases one or the other would be enabled. And then they receive information when they’re in range of an access point or in an “offer zone.”
EM: There are plenty of people who aren’t necessarily comfortable with a lot of technology when it comes to their privacy. Proximus is doing it another way: The customers need to opt in, correct?
MZ: Yes. Everything we do takes that into account and it’s all opt-in based. So regardless of which one of our offerings you’d choose, there will be some step that you’ll need to do to opt in ensuring that we stay in line with all of the privacy regulations.
EM: What works in terms of how a business can get clients and customers to want to enable or opt-in to that contact?
MZ: It comes down to the content and the relevance of the offer. It doesn’t have to be a giveaway—it just needs to be something that is relevant to the business that would give value to a consumer out there. It could be a two-for-one coffee or it could be a special ingredient for how they make one of their better-selling items in a restaurant—something that would be of value for somebody to know. We’ve seen people leverage proximity marketing to increase per-head spending, increase repeat visits back to a location, and increase the sale of higher margin items to the consumers, which adds to the business’s bottom line.
EM: How have people been getting those messages across? What have been some creative uses in how they’re connecting with customers?
MZ: The first step is that call to action, so it’s about letting people know there’s something available for them. In some cases, it’s at events and they’ll have street themes and T-shirts with a catchy saying. In some cases, it’s signage like poster boards or a banner flashing across a digital sign.
EM: In terms of the actual message, what have businesses been sending that you think have been effective?
MZ: People always want offers. So for the business owner, for the ad to be effective, the offers need to be something that provides a benefit to the consumer and to the business itself. That’s why we try to promote the increase in per-head spend, where it’s not a giveaway offer of something they’d normally buy. You offer them an appetizer along with the purchase of an entree.
Or, for example, a hair salon giving a clip of a new hairstyle that’s been seen on a Hollywood celebrity. The hair salon’s saying “If you want your hair to look like Jennifer Aniston, get your hair cut here. And, oh, by the way, she holds it together with Aveda products.” So they’re not only giving the consumer something valuable—which is what’s new in the world of hairstyles they might want—but they’re also promoting the salon and an up-sale of products, which has a very high margin to it. And in some cases, the company that provides the product to the salon may actually pay to place it there as an advertisement.
EM: On the business side, how can someone determine the effectiveness of the technology?
MZ: When you leverage mobile, it’s pretty measurable. With our solution, you know if somebody has opted in, and if the content has been browsed on their phones or if they’ve viewed 18 pages of ad content, and they’ve looked at it for the last two-and-a-half minutes. That’s all very valuable information because that means they’re spending that much time on it and there’s value to what the retailer is giving the consumer. So that means you’re on the right track as far as what you’re developing for the consumer.
EM: Each of these new forms of media seem to have their own rules of etiquette—you shouldn’t pin too much on Pinterest, you shouldn’t overcrowd people on Facebook. How can proximity-marketing users figure out how to get their message right in terms of tone, frequency, and content? What’s the secret to engaging someone?
MZ: I think it’s to be as non-intrusive as possible. Again, if the content is valuable, that’s the key. The reason people get tired of being bombarded, I think, is because 80 to 85 percent of the content they’re getting hit with is not really that relevant. It’s not exciting enough to be bombarded with. But if somebody’s giving great stuff, that’s important. And that goes to a business’s strategic objectives and what their initiatives are. If their strategic business objective is to increase per-head spending when somebody’s in the store or increase basket size, as a grocery store would say, then they need to structure their content around that.
EM: Speaking of customers being in the store, there’s been a lot of news coverage lately about “showrooming—the trend of smartphone users going into a retailer’s shop to test out a product they’ve seen online, then buying it on another e-commerce site—and the effects on big and small businesses. A recent Wall Street Journal article talked about proximity marketing being one possible solution for retailers. What have you seen? Don’t these also fall into the category of possibly also being intrusive?
MZ: Not necessarily, because with showrooming [customers] are in the store. The goal is to get you to spend money in the store and not go in and look at stuff then go and buy it somewhere else. So if they’re served an offer that’s made while they’re showrooming, you may, for instance, be able to get an offer relevant to that item, or an item, and provide them with a price that’s listed to engage them with the proximity solution while they’re in the store.
EM: What have been some of the biggest challenges that you’ve faced with this type of technology?
MZ: The biggest challenges have been that there are a lot of options out there from a mobile perspective. There’s proximity, as we do it, via WiFi and Bluetooth, there’s geofencing, there’s just straight text, there’s app-based stuff—there’s a lot of noise in this space. And so the biggest challenge has been that there’s all these other options and getting retailers to take an integrated approach. There’s no one silver bullet. If you really want to communicate with as many people as possible at the right times, you probably want to leverage multiple types of mobile technology offerings to get content into people’s hands. We actually offer all of the above in our solution.
EM: Where do you see this type of technology five years from now?
MZ: It’s projected to reach tens of billions of dollars just in the U.S. It varies whether that might be through the purchasing of solutions like ours, or a digital/mobile ad spend. I think that it’s probably going to move a little slower, but the potential of those numbers is certainly there. And as consumers adopt the method that they like the best, or the multiple methods they like the best, I think you’ll see it grow rapidly. It’s like anything else—it’s all about consumer adoption. That’s what really drives those big numbers. If the consumers want the content delivered to them, then retailers and brands eventually will have to deliver their content that way—if they want to stay competitive.