What’s all the Hype About Location Based Marketing?

The new ‘smart’ phones are about to change the web again forever and one of the ways you can stay ahead of the game, along with making sure your site is optimized for mobile is to ‘geo-tag’ your site with one of the new location based social sites: Foursquare, Gowalla, BriteKite, Yelp, MyTown…

A simple explanation for these new geo-tagging sites is that location based social networking allows members of those communities to share their location through GPS, mobile email or text message. Once you have been located in an area you can then get a list of businesses and venues to choose from, simply choose the coffee shop, shopping centre, club or resort where you are actually located and ‘check in’. Once you have done this you can add comments and reviews about the venue, or let friends know your there and meet up.

For members this allows them to broadcast their whereabouts and ask others to join them, or just show off, but for businesses this is a whole new ballgame!

What’s really interesting about an app like Foursquare, currently the leading location based community site, after coming from behind after a late start, is how local businesses can leverage their presence on the site to attract more customers. The idea is that Foursquare and Gowalla and others give out ‘badges’ and other kinds of kudos to members for checking in. The more times you check in the more badges and honours the member gets until they earn what is called a ‘Mayorship’ (on Foursquare).

A ‘Mayorship’ usually comes with a prize and this is determined by the business itself, usually a discount or an extra added bonus for being a regular. This takes ‘checking in’to your business to the level of an online game and gaming is huge!

Let’s give an example:

Imagine you are visiting a new city for the first time, before you go you log onto the site and search for “resorts in Noosa” and up pops a list of resorts, scrolling through you find the perfect accommodation (with great onsite reviews) for you and make a booking after noting down the phone number or website booking page. When you arrive at the resort you make sure to ‘checkin’ at Foursquare as you check into your hotel, you get to your room and using your phone again you log on and ‘search’ the area for a restaurant, you have a taste for Thai food tonight so your search is for “Thai food in Noosa.” Again a list of suitable place pops up and you check the reviews and find one that everyone seems to rave about and ring them and make a reservation. Of course when you get there you ‘check in’ at Foursquare as they have a special, if you check in 3 times you will get a free bottle of wine with your meal.

Next morning you want to shop…

Now the list of sites you get is based on those smart early adopters who have listed their sites and/or made sure their sites were coded with GIS data, those that don’t show up have lost out. Are you listed?

From a marketing perspective the introduction of location based social sites is a goldmine:

1. Prequalified Target: The consumer is already near you and looking for something in your area, if you are closer to where the customer is located they are much more likely to come to you – location based marketing. Interestingly if the consumer doesn’t use a search term the site they are using just gives them a list of businesses near them so there is also the probability of dropins as people learn that your business is close.
2. Increased Impulse Buying: Your marketing message is delivered to the consumer, in real time, as they search for businesses in their area, e.g. “Customers who dine with us in the next 30 minutes recieve a 15% discount,” prompting an immediate response.
3. Relationship Marketing: Customers who frequent your business earn badges and ‘Mayorships’ thus earning loyalty bonuses and building a relationship with you and your business (there are many ways this can be capitalised on in a win-win for you and your customer). This also create a history with you which can be used as research for your marketing, tracking what works and what doesn’t and responding to the customer trends allows you to give your customers what they want from you.
4. Targeted Promotions and Direct Marketing: Your promotions are truly targetted to your customers in real time via their own location, search and ‘checkin’ habits and are delivered on demand. No waste of flyers or advertising in other ways.
5. Customer Engagement: By earning badges and bonuses your customer feels like a ‘star’ in your eyes and uses this emotional engagement to boast to their friends, creating brand recognition and loyatly and amazing word-of-mouth marketing that easily goes fractal (my version of viral).
6. ROI: Loyaty and ‘Gaming’ for badges and Mayorships determines a high rate of repeat ‘checkins’ and purchases with amazing Return on Investment.

If you are going to use more than one site for instance Foursquare and Gowalla make sure you have thoroughly researched beforehand the different ways these sites earn customer loyalty and plan ahead. Add your website and your specials to each site and then make sure you advertise your presence on these sites and the specials customers and clients will recieve for ‘checking in’ on social media and on the front door of your business/es.

Make sure everyone who interacts with your business knows that you are on these sites and that you are rewarding loyalty online and offline!

These new location bases social sites are still new and updating their customization options all the time so make sure you keep track of what’s available to businesses e.g. :

Foursquare: Once you have an account on Foursquare you can then create to-do lists giving users and ‘friends’ a list of places to explore in your area, imagine the possibilities of adding to-do lists that include your business?

You can then add your business, if it is already added by someone else you can then claim your business which will be verified by them via phone call or email to make sure you really are the manager or marketing manager of that site. When you do this you immediately have the chance to create your first visitors and Mayorship specials.

Please know ahead of time what specials you would like to offer people for their loyaly, there are options to reward customers for different levels of loyatly including how many visits, immediate specials…

Then it is time to decide how to use the many options available to your business to reward customer loyalty:

• Coupons
• Travel and sightseeing tips
• Recommendations (cross marketing opportunities abound)
• Specials

Now it’s up to you, how many ways can you think of to use this new location based marketing?

More links for your research into Location Based Marketing:

http://www.webpronews.com/topnews/2010/04/20/google-local-business-center-now-google-places
http://mashable.com/2010/02/19/business-geolcation-ready/
http://mashable.com/2009/12/10/fourquare-tips/
http://mashable.com/2010/01/15/10-foursquare-apps/

The Zen Bull

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