Why Having a Location-first Marketing Strategy Pays Off
Social
networks have gone mobile over the last decade and that mobility has unlocked a
treasure trove of location-specific data for businesses to thrive over
competitors, writes Carlos Garcia in this opinion piece. Garcia is the
co-founder and CEO of HYP3R, a location-based engagement platform headquartered
in San Francisco.
Ask real estate agents today the three most important factors in
marketing a house, and they will tell you that these are “location, location,
location.” Location has long been considered essential in many industries. In
manufacturing, for instance, location matters because access to raw materials
and a qualified workforce are critical to success. And in retail, having a
storefront on a town’s main boulevard versus a side street can greatly impact
walk-in sales. In short, profitable business growth has been viewed as a
function not just of what a company does but where it
chooses to do it.
This perspective about location, long regarded as a time-honored
pillar of marketing, faced a dramatic challenge some two decades ago with the
arrival of the world wide web. With the widespread adoption of high-speed
internet during the 1990s, geography no longer was a barrier to communication
or to business. New York Times columnist Thomas Friedman,
British economist Frances Cairncross and other experts wrote
about the “death
of distance.” They noted that this newfound connectivity
eliminated — or at least diminished — the importance of location.
Businesses didn’t have to be where their clients were; instead, they could now
reach consumers through the cloud anytime, anywhere.
Consumers, too, could reach far beyond their immediate locations
to buy products or services. A reader in New York City who wanted to buy a book
from Amazon in Seattle could do so at the click of a mouse. So why pay
attention to location? In the online world, the argument went, where you are
based no longer matters.
Or does it? Today, thanks to the explosion in mobile technology,
the perspective on location is changing again. In recent years, smartphones and
social media have made a massive impact on the way consumers communicate and
businesses advertise. The Pew Research Center reports
that a whopping 95%
of U.S. adults own a cell phone of some kind.
Another study reveals that 80%
of social activity is done from mobile devices — meaning that people are posting content on the
go. And the U.S. is hardly alone. The Independentreported in 2014
that the
number of mobile devices — 7.2 billion — had surpassed the number of people on
the planet.
So what does this have to do with location? With skyrocketing
mobile usage comes accurate location data, enabling businesses to understand
exactly from where people are publicly posting on social
media. They can then use that additional layer of context to deliver messages
in the right place at the right time. This lets businesses cut through the
noise and find the right moment to engage — rather than
to interrupt. The outcome is a more organic, human-to-human
interaction between companies and consumers.
As a result, the pendulum is swinging back. Location is once
again becoming a primary focus of marketing, as all consumers who have seen
pop-up messages seeking permission to know their location are already aware.
Major social media platforms looking for advertising dollars are developing
location-based, mobile-first products and features. For instance, just last month, Snap
Inc. launched Snap to Store, which tracks whether
sponsored geo-filters boost visits to the brand’s locations.
With this shift come new opportunities. Businesses that are able
to re-evaluate and re-think the role of location in marketing, and how to best
capitalize on all available data, will be better positioned to grow profitably
over companies that fail to do so.
With new data, companies can now measure,
track, benchmark and optimize marketing performance in ways that were not
possible in the past. In today’s social media-driven world, having
a strong online presence leads to increased revenue. That has led to an emergence of companies that provide
ways to rank and measure activity at different locations, such as TripAdvisor
and Foursquare.
For our part, we have developed a Geosocial Index, a standardized, location-based social activity metric.
It measures public social activity at key locations to calculate a real-time
ranking for each location. Businesses can use it to benchmark their locations’
social activity and to compare their locations’ scores to others within their
portfolio and across their industry. If, for example, a hotel sees that its
competitor across the street has a higher score, they can dig deeper to see
exactly what kinds of social engagements that hotel is participating in. This
could inform a new strategy or suggest fresh engagement tactics.
Why Location Matters
With location, social media is not just about publishing great
content and hoping people will engage with it, or listening to what people are
saying and reacting if there’s a customer service issue. It’s about
meaningfully engaging with the people who are arguably your most valuable
customers — the ones at your locations, right now. These people are
experiencing a product or a company in real life. It’s the moment of truth for
determining brand preference.
Industries that are inherently social and experiential (i.e.,
“shareable”) — such as travel, restaurants, sports and theme parks — are ripe
for location-based marketing. In fact, people post 10 times more on
social media while they are traveling. For these industries, customer
experience is critical. Businesses that go above and beyond, leveraging
marketing technology tools to provide the best experience possible, will
ultimately win in the market.
Here are a few ways that location-based marketing can contribute
to business success:
1.
Be
surprisingly human
Location data enables businesses to delight their guests in
unexpected ways, creating powerful moments through timely responses. For
example, imagine a New York Yankees fan who tweets from the game, saying that
while he has been a lifelong fan, today is his first time at the stadium. The
Yankees’ social media manager can use marketing tools to discover the public
post, even if it’s not geo-tagged, and craft a short but powerful response:
“Welcome home.” The fan then responds with how touched he was: “The Yankees
commented on my post — my life is complete!”
Combining location-based intelligence with mobile connectivity
lets marketers take “surprise and delight” to the next level by bridging the
digital and physical worlds. Consider another example. Suppose a couple gets
engaged at a hotel and posts about it publicly on Instagram. With a location-based
marketing platform, the hotel manager could receive an alert about the
engagement and send a bottle of champagne to the couple’s room. Over time, such
thoughtful touches can allow hotels to build enormous loyalty — a natural
outcome of emotional resonance — among their guests, who feel treated as
individuals rather than part of an anonymous crowd of customers.
2.
Capitalize
on the ripple effect
When guests are delighted by these enhanced experiences, chances
are they will post about them on social media. In fact, after interactions like
the examples above, we have found that many users go on to follow the business
or reply with a mention. When happy customers post about or engage with
companies, it serves as an implicit recommendation — allowing businesses to
reach beyond the individual and drive affinity and loyalty among the consumer’s
network of friends and followers. And word of mouth, as everyone knows, is the
most credible form of marketing.
3.
Keep an
eye on the competition
Ever wonder how much people post from your competitors’ venues
and events? Another benefit of location-based marketing is being able to
surface public social activity at competitors’ locations and then using that as
a benchmark for your own social performance.
Location is Going Places
Companies that fail to think about a
location-first marketing strategy are likely to miss out on opportunities to
engage deeply with their customers and attract new ones. According to a 2016
study, 75% of brand marketers believelocation-based
marketing is an important element to their business strategy. New research from the Location Based Marketing
Association (LBMA) has found that more than 50%
of brands are using location data to target customers, with 25% of marketing budgets allocated to
location-based marketing tactics.
We believe location’s role in marketing will
continue to grow. Advertising research group BIA Kelsey predicts that
geo-targeted ad sales will rise from$12.4
billion in 2016 to $32.4 billion in 2021. As
Facebook, Instagram, Twitter, Snapchat and other major social networks battle
for advertising dollars, we expect them to develop even more ways of seamlessly
integrating location into their products.
The Future of Marketing
In the past, location-based marketing largely focused on
anonymous tracking via beacons, Bluetooth and branded apps. If all those
elements came together — i.e., consumers installed the apps, enabled Bluetooth
on their phones and walked by a functioning beacon — then they would receive a
prompt or an offer on their phones.
But what we’re seeing today is companies using location-based
marketing tools to build relationships with individual consumers through social
media in a very human way. All the rules of human-to-human marketing (being
personal, empathetic, conversational and authentic) still apply — but because
businesses now know when consumers are at their location, they have an even
better understanding of their experience.
In a way, marketing has come full circle. In the past,
businesses had direct interactions with customers in a physical place like a
market or a store. Next came the use of broadcast media to share one message
with millions of people at once. And today, we are back to building
relationships with individuals at locations — but this time it’s happening
through the cloud. Thanks to technology, businesses can discover all public
posts at their location and create easily executable engagement protocols,
ushering in a new wave of human-to-human marketing at scale. The result is
marketing strategies that are efficient for businesses and delightful for
consumers.
http://knowledge.wharton.upenn.edu/article/location-first-marketing-strategy-pays-off/?utm_source=kw_newsletter&utm_medium=email&utm_campaign=2017-05-25
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