As consumers rely increasingly on their mobile devices, some businesses are turning toward location-based marketing to stay connected. Location-based marketing uses technology that allows businesses to send messages to customers and prospects based on their physical proximity to the business, change offers quickly, and tailor highly specific ads to meet the needs of a customer at that moment. With around 75 percent of smartphone users relying on location-based services, according to a recent report by Pew Research, small businesses that jump on this new marketing tool could outpace their competition and hold onto a mobile customer base that shows no signs of staying put.
Set objectives first
While the potential of targeting consumers as they near your business offers many opportunities for pulling them in, experts caution that you should first define your objectives before launching a location-based marketing campaign. "Different objectives might have different strategies. It's more important to start with what you want to accomplish," says Adam Kleinberg, CEO of Traction, a San Francisco-based interactive agency. "If you find that you have a lot of customers who are doing price comparisons in the aisle of your store, then it might make a lot of sense [to use location-based marketing]. On the other hand, if people are less likely to be using phones, it may be less opportune."
Social media and search engines, such as Facebook and Google, have services that can help small businesses partner with them to set up a location-based marketing plan in a defined geographic area. For example, Kleinberg says that he has gotten ads from a local donut shop within two blocks of his office through a Google search. And Traction put together a location-based marketing campaign for a neighborhood pizza parlor through the rating service Yelp.
Kleinberg says that ads in location-based marketing are much more simple and direct than traditional advertising. For example, a high resolution shot of the outside of your business with a short interesting call to action or time-sensitive offer can be a good way to test your ad.
"Once you've got your objectives and goals, look for something that you can measure on an ongoing basis," Kleinberg says. "Try two different things side by side with slight variation so you're always improving. Digital marketing has the great power to set up simple experiments and improve results over time."
Creating custom content
"I think the biggest advantage of using location is just being more relevant to your customer and reaching them in a way that they want to be reached," says Brett Kohn, vice president of marketing for Thinknear by Telenav, a Silicon Valley-headquartered company that specializes in location marketing services. "We're starting to see more and more user traffic or customer traffic going mobile as opposed to finding them in the online world."
Kohn says that "contextually relevant content" in your ad performs better. For example, a restaurant that wants to promote a new menu could send a message that not only tells a smartphone user how close they are to the restaurant by distance, but which also has a countdown clock to the event. "Those are small things, but they’re little triggers that hit the customer's mind and can actually trigger a change in behavior," Kohn explains. "We're using that context to make the ad more relevant."
While small businesses can certainly partner with Google or Facebook, Kohn says that they have a more standardized approach to marketing that might not lend itself to new or innovative approaches. Instead, businesses can work with companies that can help them tailor content to individual customers or selected groups of customers.
For example, Thinknear works with many local auto dealerships. "We'll allow each dealership to create their own content that we can actually serve out in a systematic way so that each individual dealer doesn't have to manage every single piece of content," Kohn says. "They can deliver different content in each local market—which makes the user feel that the ad was created just for their locality. So if you've got two towns that are 20 miles apart, you feel like you're getting the ad just for your town."
Listen to your audience
"Know your audience. Once you know where your audience is online, it's easier to target them," says Peter Shankman, an entrepreneur, author, and CEO of The Geek Factory, a New York City-based social media and PR strategy firm. "The best thing you can do is ask your audience how they like to get their information—what platform they want. Then it's really about listening. Find out what they like—what they're talking about—and give them something they covet."
Shankman says that marketing messages must benefit the customer and should be relevant. For example, an ad that says "Buy Our Product" will not necessarily entice a customer. However, a simple ad with a message keyed to the person's circumstances—such as a convenience store that advertises a buy one/get one free cool drink on a hot day—would work much better. "Market a straightforward request," Shankman explains. "Users on average spend two to three seconds looking at a mobile ad."
Small businesses that keep close tabs on specific Twitter words can use them to develop timely location-based marketing messages. "There is a restaurant in Seattle that monitors Twitter for the term 'Wheels down' and 'SEA,' which is the airport designation for Seattle," Shankman says. "When they get a 'Wheels down SEA,' they look to see if that Twitter handle has ever been to their restaurant before. Whether they have or they haven't, the restaurant reaches out and says either 'Welcome to Seattle' or 'Welcome back. If you're downtown tonight, show us this Tweet and stop by and the first drink is on us.' And they have a tremendous response rate to that."