Location-based marketing is referred to using various terms, including proximity marketing, geo-marketing and location-aware marketing. These terms are often used interchangeably but they may have subtle differences in their specific technical implementations or the tools used to execute them.
For example, proximity marketing is more focused and targets users based on their immediate physical proximity to a specific location, often within a few meters or feet. Location-based marketing, on the other hand, involves targeting users based on their general location, which can range from a larger geographical area like a city or region to a broader radius around a specific point.
Moreover, if proximity marketing utilises technologies like geofencing or Bluetooth beacons to deliver more precise and contextually relevant content to potential customers who are in or near a specific location, location-based marketing uses both geofencing and geotargeting to enhance the effectiveness of the strategy.
Businesses should be aware of these various terms and understand their nuances to make informed decisions and maximise results.
Why invest in location-based marketing
Embracing location-based marketing is a savvy move in today’s fast paced society, where instant gratification holds immense value. This impactful strategy empowers brands and marketers to connect with consumers on a deeply personal level.
By mastering this kind of marketing, businesses can tap into the potential of real time engagement, capturing the attention of potential customers precisely when and where they are most receptive, which is how you enhance your customer experiences and increase conversion rates.
This strategic method not only facilitates the buyer’s journey, from initial discovery to final purchase, but it also plays a vital role in customer engagement and retention. By tailoring promotions and offers to customers in specific locations, businesses can foster a deeper sense of connection with their audience and build long-lasting relationships.
Here are 8 main benefits that make location-based marketing a game-changer:
- Precise Targeting. Reach the right audience based on real-time location, ensuring relevant messages reach potential customers when they are most receptive.
- Enhanced Engagement. Deliver personalised content and offers tied to users’ geographic context, leading to higher interaction and engagement with marketing campaigns.
- Foot Traffic. Drive more people to physical store locations by sending location-targeted promotions, increasing the likelihood of in-store visits and purchases.
- Improved ROI. Allocate the marketing budget more efficiently with targeted campaigns, resulting in a higher return on investment and reduced marketing wastage.
- Competitive Edge. Engage directly with customers and even with your competitors’ customers.
- Real-time Insights. Gain valuable data on customer movements and behaviour, providing actionable insights to optimise marketing strategies and decision-making.
- Contextual Offers. Deliver timely and location-specific promotions to create a sense of urgency and relevance, encouraging immediate action from potential customers.
- Customer Retention. Strengthen customer relationships and increase retention rates by offering location-based loyalty programs and tailored rewards to enhance the overall shopping experience.
What are the three techniques for location-based marketing
It is best to understand these techniques that enable businesses to precisely target and engage potential customers based on their physical locations:
- Geofencing – A technique that involves defining an area, virtual parameter or geofence around specific locations with smartphone data, WiFi or GPS where the target audience visits to trigger a desired marketing action. There are two approaches to geofencing: radii and polygons. The radius approach entails creating a circle around a point of interest and assuming that any mobile device detected within it is visiting the location. However, this can lead to issues as it may also capture passersby instead of actual visitors to the location. On the other hand, polygons refer to drawing shapes that conform to the building’s footprint and/or parking area, offering greater precision as they accurately outline the physical structure of the point of interest. Using polygons enhances the targeting accuracy of location-based marketing, ensuring that the messages are delivered to the right audience within the intended area.
Example (a customer walking near a shopping mall): “Hi Lachlan, fancy a pick-me-up? Pop into XYZ Coffee Shop, just 100 meters away and score 20% off your go-to coffee blend. But hurry, this offer ends in 1 hour. Don’t miss out!”
- Geotargeting – This involves creating audiences based on matched historical visits to real world locations and points of interest. The users must meet specific criteria inside a defined perimeter. This method enables marketers to tailor their ads and content to locations most relevant to their campaigns. For instance, audiences observed at coffee shops are identified as coffee drinkers, whilst audiences seen at auto dealerships are recognised as potential car shoppers. By leveraging geotargeting, marketers can precisely target their messaging and connect with audiences based on their specific interests and behaviours in real-world locations.
Example (someone is attending a music festival): “Hi Ruby, come on down to our store! Enjoy 20% off all festival accessories at XYZ Boutique, just a short walk from the main stage. Show this message for the discount. Rock on!”
- Geoconquesting – This tactic can be aggressive and not as widely used, but all the same, we are giving you more ideas to choose from. This involves targeting and luring customers away from competitors’ locations. It uses geofencing technology to draw virtual perimeters around rival businesses or points of interest and when potential customers enter these geofenced areas, they receive targeted ads or messages promoting the benefits of switching to the advertiser’s business. The aim is to capitalise on the proximity of the competitor’s location and entice customers to make an immediate decision in favour of the advertiser. Others may see geoconquesting as intrusive, as it directly targets customers who may have already made a choice to visit a competitor’s business. Some individuals might perceive it as attempting to poach customers from competitors rather than earning business through other means. Our suggestion: tread carefully! Strike a balance between aggressive marketing tactics and respecting customers’ choices and privacy to ensure that your strategies are received positively and ethically.
Before you embark on location-based marketing, keep in mind that preserving consumer privacy should always be a top priority, with location data collected only from opted in sources and then meticulously aggregated and anonymised so that it cannot be directly tied back to any individual. By refraining from targeting individuals, brands and marketers can focus on reaching larger, like minded audiences, driving impactful ad delivery to groups rather than isolated individuals.
With its precision and personalisation, location-based marketing opens doors to many opportunities paving the way for businesses to thrive in the competitive market. Embracing this strategy, especially with guidance from expert marketing strategy consultants, ensures that businesses can navigate the path towards marketing success whilst respecting and safeguarding their customers’ privacy.
If you are ready to harness the power of location-based marketing for your business, consult our expert marketing consultants today to discover how this dynamic strategy can elevate your reach, engage your audience and drive exceptional results whilst ensuring the utmost respect for consumer privacy.