Location-Based Marketing 101: Definition, Advantages, & More
Location-Based Marketing 101: Definition, Advantages, & More
As the world becomes increasingly digital, taking advantage of marketing technology is key. Location data helps marketing teams to geo-target customers with great specificity. This is a method known as location-based marketing.
Location-based marketing is a 21st-century cornerstone of the marketing industry. Using a variety of methods and technologies, it pinpoints customer locations. Additionally, it helps determine and analyze customer preferences. When properly employed, this marketing strategy greatly boosts both in-store and online business.
This article will define location-based marketing and outline its importance and benefits. Plus, we will cover the advantages of 1Q’s geo-targeting technology.
Defining Location-Based Marketing
Location-based marketing is a strategy used by businesses to target customers within a specified geographic region. In this strategy, data from mobile devices with location services enabled is gathered to help pinpoint customers in a certain area.
Depending on the location-based method used, businesses can focus on customers according to very specific parameters. These include criteria such as different demographics or proximity to the business’s whereabouts.
Location-based marketing can be either broad or extremely precise. Different methods come with different capabilities, making the overall strategy more customizable according to company needs or requirements.
For a location-based marketing strategy to work, it is imperative to use personalized content as much as possible to deliver to users. This personalization helps tailor the content a person is receiving specifically to them, boosting the value of the overall strategy.
Meeting the Challenge of User Privacy
When it comes to location-based marketing, a highly important consideration is the privacy of users.
Marketing teams cannot always gather data from any mobile device nearby. There is a delicate relationship between marketer and customer that must first be achieved.
Customers can often be wary of technology, especially when it comes to their personal information. As a result, advertisers and marketers must make a compelling case for why consumers should opt-in to data collection through applications, GPS, and other features of mobile devices.
To meet the privacy demands of the general public, strict requirements on how location data can be used are imposed on marketing teams. These requirements will typically define customer data as “personal data,” limiting how companies can use and share this information.
There are 3 key factors that help to build digital trust among customers regarding location data:
1. Opt-In by Default: Customer consent is essential when it comes to the ethical use of location data. For any location-based marketing strategy, the customer should automatically be given the choice to opt-in or opt-out of the service. This gives them a greater sense of control and shows respect towards their sensitive data.
2. Transparency: Customers do not like to feel confused or fearful when it comes to their personal information. To ease these concerns and earn trust, businesses must be clear and transparent on how the location data will be used.
Ultimately, a major enabler to location-based marketing is helping customers to understand the value in it. Businesses and marketing teams should strive to explain the importance of location-based marketing for providing customers with a highly personalized digital experience.
Why Location-Based Marketing is Important
The importance of location-based marketing lies in the already prominent use of the strategy by competing companies.
The Location Based Marketing Association (LBMA) releases a global location trends report each year. According to the LBMA’s 2020 report, 95 percent of global companies already use location-based services.
Additionally, the report examined what respondents believed to be the most beneficial features of location-based marketing. For North American respondents, the top responses were:
- 48 percent saw the ability to “target within a narrow geofence” as the most important application of location technology.
- 23 percent reported “increased brand recall” as the most important application.
- Driving foot sales and driving sales at POS were the next most popular, though with less than 20 percent of respondents each.
This report reveals that both globally and within North America, companies recognize the importance of targeting local consumers. Failing to do so can result in a significant disadvantage against competitors who have embraced location-based marketing.
Businesses who use the strategy also gain access to much more detailed data and information on their customers. Not only can this significantly boost foot traffic and sales, but it can also vastly improve a company’s overall brand awareness.
Who Should be Using Location-Based Marketing?
The truth of location-based marketing is that it can benefit most businesses when employed correctly.
However, there are a few industries that take advantage of the strategy more than others. Location-based marketing is especially useful for businesses that have physical stores for customers to visit. The strategy is also highly beneficial to companies with many nearby competitors.
Let’s take a quick look at 5 industries where the use of location-based marketing is prevalent:
- Restaurants: The restaurant industry offers some of the best use-cases for this marketing strategy. Using location-based technology, these businesses can target locals and tourists alike who are within close range of the restaurant or bar.
- Retail: Location-based marketing is used in retail not only to attract customers but to enhance the in-store shopping experience as well. The use of this strategy within retail has proven its ability to increase brand awareness and loyalty.
- Automobile Dealerships: The car-selling industry is no stranger to the power of location-based marketing. Using the strategy, car dealerships can attract local customers and even steer business away from their competitors.
- Events: The events industry includes everything from sports to concerts – and all of it relies on the ability of a marketing team to pull in local traffic. Location-based technology helps to boost engagement and promotion of upcoming events to nearby consumers.
- Travel and Tourism: The travel and tourism industry uses location-based marketing to provide travelers with personalized recommendations on a variety of services. This can include places to stay and attractions to visit.
Though these are the industries that have embraced location-based marketing the most so far, many other industries can benefit as well. For example, a healthcare provider could use a location-based marketing strategy to target local residents in search of affordable care.
The Different Types of Location-Based Marketing
While there are many different forms of location-based marketing, most fall within three main categories:
· Geo-Targeting and Geofencing
· Mobile and Proximity Marketing
More often than not, a marketing team will combine these different strategies. Every business is different, thus, every marketing strategy will have different considerations and needs to meet.
The key to determining which strategy will be best for a business is to understand how each method works.
Here is a breakdown of each type of location-based marketing and the associated benefits:
1. Geo-Targeting and Geofencing
Though often used interchangeably, the terms geo-targeting and geofencing refer to two distinct location-based marketing strategies. The methods are often paired with one another as well, furthering the association between the two.
Geofencing is a marketing approach that utilizes consumer IP addresses within a geographical parameter. With geofencing, businesses can target all IP addresses within a limited physical area. This will include everything from home computers to mobile devices.
Geo-targeting, comparatively, focuses on more specific details of consumers within a given area. Using this method, businesses can target users based on many criteria and demographics. This strategy can be effective in both smaller and larger geographic areas.
Together, the processes of geo-targeting and geo-fencing allow businesses to focus marketing efforts on very specific audiences within their local areas.
Benefits of geofencing and geo-targeting include:
- Improved Analytics: With the combined efforts of geofencing and geo-targeting, businesses can gain valuable insights and metrics about customer behavior and preferences.
- Precise Targeting: These two location-based methods allow businesses to engage in highly precise customer targeting. Not only can they target consumers within a limited geographic range, but they can also narrow that target further using demographics and other factors.
- Increased Personalization: Geofencing and geo-targeting have a lot to offer to not just the business but to the customer as well. With these methods, a marketing team can provide consumers with a greatly enhanced user experience that is tailored to their wants and needs.
Geo-conquesting offers a more competitive edge to the methodologies of geofencing and geo-targeting. Rather than focusing on the customers, geo-conquesting focuses on a business’s competitors within a given location.
With geo-conquesting, companies can target the locations of competitors and deliver ads to customers visiting said competitors. This is a strategy often seen used by car dealerships and department stores.
The main benefit of this method is that businesses can reach customers who are already in the market for whatever product or service is being offered. This is known as targeting “active buyers.” To win the customer over, the business will generally offer better prices or more comprehensive services compared to the competitor.
Additional benefits of geo-conquesting include:
- High Ad Relevancy: Even with a high level of personalization, location-based marketing risks sending ads to uninterested consumers. With geo-conquesting, businesses are nearly guaranteed that the ads being sent are highly relevant to the customer.
- Improved Competition: In this age of overcrowded industries, standing out from the competition is necessary. Geo-conquesting helps businesses maintain a strong competitive edge. Plus, it can help keep a higher level of brand awareness.
- Targeted Offers: Thanks to the heightened relevancy of ads, offers given via location-based marketing can also be highly targeted and relevant. This allows companies to provide deals and offers that are more advantageous than those of their competitors.
3. Mobile and Proximity Marketing
Mobile marketing has become a pillar within the marketing industry. As of 2021, 97 percent of Americans own a cell phone and 85 percent own a smartphone, according to Pew Research Center.
Put simply, that means millions of potential customers using their mobile phones around and within businesses every day.
It’s no surprise that mobile devices play a key role in location-based marketing. The method of proximity marketing was born out of the need to target mobile users within a specific area.
Proximity marketing is the use of mobile technology to deliver messages and ads to customers within a highly specific area. While other location-based strategies target broader areas, proximity marketing focuses on as exact of a location as a user’s phone will allow.
This preciseness in location capabilities allows businesses to attract customers right outside their walls. The proximity trigger that defines the radius the mobile user must be in can be reduced to even just a few feet to target potential customers within the business as well.
Beacon technology is commonly used to enable proximity marketing. A beacon is a device that uses Bluetooth to connect to customer devices. Once connected, businesses can relay timely messages or advertisements on products, deals, or other services offered.
Benefits of mobile and proximity marketing include:
· In-Store Message Delivery: Using proximity and beacon technology allows businesses to deliver highly personalized messages to customers already within the business. This can include everything from sales on specific products to assisting with store navigation.
· Higher Conversion Rates: Proximity marketing is highly customizable, meaning businesses can send tailored messages according to very specific parameters. For instance, a customer entering a hair products aisle in a supermarket could receive ads for ongoing hair product sales.
· Greater Engagement: With proximity marketing, users are given valuable information in exchange for engagement. This increased engagement can help a business to improve its digital and online presence in the long run.
5 Key Advantages of Location-Based Marketing
Now that we have covered the benefits of different types of location-based marketing, let’s discuss the advantages of the strategy as a whole.
Location-based marketing gives businesses a unique opportunity to connect with local audiences. Though this connection is digital, it often occurs via a person’s mobile device. This inherently lends itself towards personalization, as mobile devices contain immense amounts of customer information.
This section will cover 5 key advantages of location-based marketing. These contribute to the greater value and profitability of the marketing strategy.
1. Greater Understanding of Customers
In this age of increasing digitization, caring for the individual needs of customers has never been more important.
Location-based marketing provides businesses and marketing teams with the information needed to understand customers at a deeper level.
When customers opt-in to sharing personal information, marketers are given exponential amounts of useful data. This data helps to personalize and customize every user experience.
Important customer data can include:
- Demographics: Demographic data provide very personal information about the user. This includes information such as age, gender, income, marital status, etc.
- Behavior: Tracking the digital behavior of customers can be extremely revealing. Using permission-based tools, marketers can track customers across other apps and websites to gain greater insight into their interests and purchasing behaviors.
- Engagement: An essential metric to track is user engagement. Knowing how often and through what channels customers are reaching a business is key. With location-based technology, marketers gain a better sense of how a specific customer base engages with a business.
2. Improved Search Engine Ranking
Location-based marketing uses a plethora of technologies to reach local audiences. This includes optimizing a business’s online presence to boost its discoverability as much as possible.
To appear on GPS devices and within web searches, a business needs to have business pages set up. For instance, to appear as a recommended business on Google Maps, a Google My Business profile must be claimed and filled out.
As a business’s digital presence becomes more localized, using location-based tools such as Google My Business help with search engine ranking. Search engine ranking refers to where a business website appears within the search results page.
Most consumers choose links and businesses that appear on the first page, so ranking matters.
Having a location-based marketing strategy lends itself to boosting search engine ranking. With the help of engagement from locals – such as leaving reviews or ratings – a business can rank higher on search engines with greater ease.
3. Boosted Local Brand Awareness
The more location-based technology a business uses, the more likely local residents are to recognize the business’s name.
Brand recognition alone can do wonders for business. Traditionally, brand awareness is achieved through things such as logos, slogans, and jingles. With location-based marketing, that same brand awareness is instead achieved through unique offers and advertisements.
With strong brand awareness within a local area, a business will experience:
- An increase in foot traffic
- More word-of-mouth recommendations from local customers
- Greater amounts of online reviews and ratings
To optimize brand awareness, businesses will often pair location-based marketing with a social media strategy. By doing so, they can target even more local customers through their preferred social channels.
4. Heightened Business Levels
There are many unique capabilities to location-based technologies that can greatly benefit a business.
For instance, weather marketing is a strategy that helps businesses target slower times during bad weather. This often involves offering a special deal, service, or discount for customers who visit on rainy or unpleasant days.
By targeting slow times, a business makes better use of its operational expenses. Location-based marketing aids in targeting ideal customers during times that usually lack foot traffic or in-person business.
As for online traffic and sales, location-based marketing can also boost busyness on this level as well. The larger a digital presence becomes, the more web traffic it will be able to attract.
5. Low-Cost Marketing
Location-based marketing is advantageous to businesses because it does not require an immense marketing budget.
There are many great tools and services out there that are low-cost and easy for businesses to use. Here at 1Q, for example, our mobile research platform offers geo-targeting capabilities at no additional cost to our users.
Marketing can get expensive quickly, especially when advertisements are involved. Location-based marketing allows businesses to connect with local audiences at a much lower cost. This, in turn, supports greater scalability of the business’s marketing efforts.
How To Do Location-Based Marketing
Like any marketing strategy, there are a few different ways to get started. First and foremost, a business must determine a few key factors:
- Budget: Every business is different and will have different budgetary resources. Determining how much of a budget can be allocated to marketing is essential.
- Goals: When beginning a new marketing strategy, it is important to set clear goals. For example, a record shop may set the goal of increasing in-store visits by 30 percent. Setting specific goals also helps measure the success of a marketing campaign.
- Scale: Location-based marketing strategies can be both broad and narrow. Deciding what geographic scale to target is a key consideration when getting started.
The following are three ways a business can get started with location-based marketing today:
1. Find a Strong Marketing Team
Any business needs a marketing team. For larger companies, this will often require an in-house marketing team that works only for that specific company. Smaller businesses, comparatively, may rely on one to two in-house or freelance marketers.
A good marketer will understand the importance of attracting a local audience. Regardless of the size of the marketing team, it is essential to work with professionals experienced in location-based strategies.
2. Claim and Fill Out Business Profiles
Claiming business profiles, such as Google My Business or Yelp profiles, are essential for any localized marketing strategy. Without these profiles filled out, a will not appear on recommendations with GPS technology and other applications.
This is a crucially important step, as even businesses with little to no marketing budget can achieve this task. It costs nothing to claim and fill out a business profile, and the benefits can be immense!
3. Work with 1Q for All Your Location-Based Market Research Needs
Geofencing and geo-targeting equipment can get expensive quickly – not to mention complicated. Working with third-party providers of location-based technology can be very advantageous in terms of both budget and simplicity.
By working with 1Q, businesses are given easy access to our geo-targeting technology. Our customizable platform and user-friendly interface make location-based marketing a breeze.
How 1Q’s Geo-Targeting Technology Can Help
At 1Q, we strive to help businesses engage with mobile audiences like never before. Our platform is designed to help businesses research their target audiences.
With 1Q’s mobile research tools, users can gain highly valuable insights into their ideal customers. Respondents on our platform are incentivized to respond quickly and accurately. This allows for real-time analysis and profiling.
Through 1Q, brands can:
- Communicate directly with consumers
- Send a survey to consumers within a specified geographic range
- Uncover consumer insights within any geographic area, from a zip code to a specific address to reaching an in-store shopper as they move through the aisles. Most important, 1Q offers the geo-targeting and geofencing technologies needed to achieve the optimal location-based marketing strategy.
1Q’s Geo-Targeting Capabilities
Here at 1Q, we offer our patented geofencing capabilities to provide granular targeting. This targeting is based on the user’s home location as well as previous or current locations.
With 1Q, businesses can:
- Pinpoint Target Customers: 1Q’s geo-targeting technology hones in on precise locations of respondents. This allows businesses to learn exactly where to find their target customers.
- Gain candid feedback: Our respondents are incentivized and willing to offer feedback. Rather than dealing with professional survey takers, businesses can connect with real people in real-time
- Re-Contact Respondents: 1Q enables users to re-contact specific respondents for further feedback. Users can even build their own panel of respondents for more detailed or thorough analyses.
Benefits of 1Q’s Platform
Aside from geo-targeting technology, 1Q offers users a slew of additional benefits.
- Simple Pricing: We keep our pricing simple. Each response costs $1 with no hidden costs or minimums.
- No Contracts: To access our respondents, no long-term or costly contracts are required. All of 1Q’s features, analytics, and support are available to users at no additional charge.
- Verified Respondents: With 1Q, businesses can rest assured they are working with verified individuals and not bots. 1Q is certified bot-free by the Cybersecurity Firm Avertium.
How to Get Started with 1Q
Getting started with 1Q is easy. Simply follow these 3 steps:
1. Book a Demo: Try 1Q out before committing to creating an account. Our 15-minute demo shows the platform in action. Plus, we provide you $100 worth of credits to test questions in real-time during the demo.
2. Create an Ask Account: Once you are ready to start your market research, create an ask account on our platform. Signing up is free to all – no hidden or start-up costs required!
3. Use 1Q’s DIY Platform: We designed our platform for the utmost user-friendliness. 1Q is entirely self-serve and content can be sent immediately without internal review.
With 1Q, you can unleash the power of your business. Our respondent base is 1 million+ strong and ready to provide you with all the consumer engagement and research you need.
Location-Based Marketing Use Cases
Many of today’s top companies are using location-based marketing to boost their business. Looking at how these big businesses are using location-based technologies can be highly educational. Plus, it can serve as inspiration for how to employ location-based strategies at one’s own business.
Check out these 3 major use cases of the strategy by major brands:
1. Use Case 1: Whole Foods
The American supermarket chain Whole Foods employs geofences to achieve location-based marketing.
These geofences are set up around both Whole Foods’ stores and the stores of its competitors. When a person carrying a mobile device enters into the geofenced area, specialized offers are sent directly to them.
The ads delivered by Whole Foods are made to be highly relevant and timely to the consumer. As a result, the Whole Foods team is able to achieve far greater conversion rates through their marketing efforts.
2. Use Case 2: SXSW Music Festival
Many businesses think of marketing only in terms of increasing sales. However, innovative ideas on the customer experience are pushing the boundaries of what location-based marketing can accomplish.
South by Southwest, more commonly written as SXSW, is an annual conference and music festival hosted in Austin, Texas. SXSW is known for featuring innovations in technology, including demonstrations and speakers.
As part of this focus on technology, organizers of SXSW looked to location-based marketing as a means for enhancing the user experience.
By employing location-based marketing, SXSW is able to help attendees in several ways, including:
- Navigation around the festival grounds
- Information on nearby products for sale
- Personalized festival recommendations
3. Use Case 3: Toyota
The automobile industry is no stranger to location-based marketing. A leader of this method is none other than Toyota.
Toyota was able to drive 1,200 visits to dealerships through an ad campaign that utilized mobile location data for targeting customers. In the past, Toyota has also been known to employ location-based strategies such as geo-conquesting – a method known well for its success in the auto industry.
The ad campaign carried out by Toyota revealed just how much business can be garnered through targeted location-based marketing alone.
This is especially significant considering that buying an automobile is often considered an investment or “big purchase.” For Toyota to drive 1,200 visits using only a location-based ad campaign shows how capable the strategy is at targeting highly specific audiences within a limited geographic area.
Location-based marketing is a powerful strategy that can boost a business’s sales, traffic, and engagement.
In an age where business is becoming increasingly digital, location-based marketing helps businesses to stay in touch with local audiences. Location technologies have a wide range of capabilities. This includes everything from targeting a highly specific geographic area to setting precise consumer parameters.
If you are a business owner or marketing manager looking to start your own location-based marketing strategy, 1Q is here to help.
With 1Q, you can begin connecting with consumers in your area as soon as you sign-up. Our geo-targeting technology is available to you for zero startup fees and no additional costs.
The future of marketing is in location-based technology. Stay ahead of the curve and get started with your own location-based marketing strategy today!