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From SoLo to ROI: Make an Impact on the Bottom Line with Location-Based Marketing

Posted by Jason Weaver on November 2nd, 2012 at 8:00 am

There’s been a staggering jump in mobile usage in recent years. For retailers with brick-and-mortar locations, this has translated into customers checking in to stores, scanning price tags, and taking part in campaigns in exchange for incentives – so much so that 87% of users expect to receive a discount after scanning a QR code. Savvy brands are working to link this mobile activity to their online and social media efforts – and those that are can capitalize on data about customer activity and learn how to better connect with their customers.

There are exciting changes happening in the social-local-mobile space, but it’s not always easy for brands to see if their social media marketing efforts are paying off. But consider this: According to a new study by JiWire, it has been found that 75% of people will take action after seeing a location-based message. This is a huge opportunity for brands with physical locations. So how can brands turn location-based efforts into sales?

Targeted promotions
: Local content is relevant content. For large brands with hundreds of locations, this creates a golden opportunity to offer national promotions based on activity at a local-level location. For promotions on Foursquare, analyzing the data about the most popular check-in times and seeing which type of promotions work in different locations can help you tailor the promotions to suit the habits of local customers – boosting chances of in-store foot traffic and a positive ROI.

Event-Based Campaigns: Integrating marketing initiatives into national events is another timely way to connect social efforts to offline, at-location events. To celebrate Social Media Day on June 30, Fairmont hotels offered anyone who checked-in to one of the hotel’s restaurants or liked or retweeted the event a voucher by email to redeem for a free appetizer at the property's restaurant. And then to encourage repeat visits, they were given a one time 25% discount to come back within 60 days. Not only was Fairmont able to track the ROI of its campaign, but it also built its email list for possible future returns.

Integrated Campaigns: Marketers are attempting to integrate the various branches of marketing into cohesive, streamlined campaigns, but just 9% say they are creating fully integrated campaigns. When added to an integrated campaign, location-based tactics add a hands-on way to interact with a large-scale campaign that spans social networks. Iconic jeans brand Wrangler Western’s sponsorship of the Country Music Association Music Festival included a fully integrated campaign across social networks. A Facebook sweepstakes, Twitter contests, and Foursquare giveaways were part of the promotion around their presence at the festival. Visitors could check in to the Wrangler booth at the event to win prizes.

Insights through Data: Being able to achieve positive ROI for any marketing initiative means being able to optimize your efforts. By analyzing the data available to you about location-based interactions, you’ll be able to uncover facts about your customers that are applicable to future campaigns. From the number of check-ins and types of specials redeemed at any of your retail locations to data you collect after a location-based engagement like a QR code scan, the insights you glean will inform not just future location-based projects, but also reveal information about your customer you can use to optimize marketing initiatives ranging from email to merchandising.

LBS Potential
Brands are beginning to utilize location-based marketing into their plans, but it is still a burgeoning tactic. Like social media several years ago, it’s expected to mature and become more adopted by both users and companies. In what was nearly nonexistent in 2009, location-based marketing is projected to grow to $6 billion by 2015, according to Borrell Associates.

Currently much of brands’ location-based marketing efforts revolve around couponing and promotions, and this is one of the main ways ROI is assessed. But the future of location-based marketing lies mainly in the value provided to customers in exchange for the disclosure of their whereabouts. In a panel at Social Media Week LA, Forrester’s Nate Elliott pointed out that value could be in the form of a discount, but moving forward it will have to be also tied to valuable experiences without the promise of a discount.

A campaign by Virgin America begins to illustrate this: To promote new routes to Mexico, the airline offered people who checked into specific taco trucks a discount on flights to Mexico. Another groundbreaking campaign by StarHub, clothing was affixed with RFID tags that held different pieces of music. When specific items of clothing were brought into dressing rooms, different genres of music played, highlighting the idea that fashion and music both allow consumers express themselves. This best-in-class campaign offers a glimpse into the future of location-based initiatives that enhance the customer experience, don’t offer promotions and don’t require check-ins by users on their mobile phones.

When it comes to direct ROI, location-centric discounts are currently the primary way to illustrate a direct impact on the bottom line, and companies can begin using this tactic to experiment with how their consumer base reacts to location-based specials and promotions. But beyond testing coupon-based campaigns, diving in will allow brands to uncover geo-social data they can use to improve areas such as word-of-mouth results, brand awareness, and the in-store customer experience – all of which can ultimately boost sales.

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