Location-Based Services: Factors and Considerations for B2C and B2B Marketers
While many businesses have already flocked to the likes of Twitter and Facebook, and using strategies such as contests and Facebook ads—location-based marketing which has been around now for a few years, has not yet hit its critical mass.
If you’re not using location-based marketing consider these findings from eMarketer:
In 2010 around 33 million people in the U.S. used a location-based service. They predict that the number of mobile social network users will double between 2010 and 2015, and the adoption of location-based services will rise with it. “Make no mistake,” they write, “Location is a key component in marketing’s future.”
So while the numbers of users are predicted to grow it seems too that the early adopters of location-based marketing have been B2C single location businesses with foot traffic and multiple-venue businesses such as chain hotels and retail stores, and big brands without locations. By early 2011, it appears that many B2B companies have not yet seen how to apply this type of marketing to their businesses.
Adoption Factors for B2B Companies
DH: Are you seeing B2B companies without physical locations interested in creating landmark or trips location-based marketing campaigns?
AS: Not yet but I think you will more so in 2012.
DH: Do you think B2B usage of location-based marketing will grow?
AS: Over time, yes. Just like general social media. B2B tends to be 12-18 months behind.
DH: Do you think location-based marketing will be seen as more suitable for location-based businesses and big brands who have greater brand awareness and are able to capture people’s attention with using landmarks and trips?
AS: Yes. Although smart companies that don’t have physical locations have already (and will continue to) use wisely. Think Bravo, Red Bull and USA Today.
Thank you, Aaron for providing that important perspective.
For this post then we will speak mostly to the B2C business who are interested in exploring location-marketing campaigns. We’ll list too a few suggestions for B2B and hear from some businesses themselves about their experiences.
I asked Simon Salt, author of the new book, Social Location Marketing. about the hurdles for businesses. See what he has to say:
DH: What do you see as the major hurdles for businesses in adopting this type of marketing?
SS: The major hurdle is that many of them are still struggling with other Social Media tools like Facebook and Twitter. To throw social location into the mix is beyond their resources at the moment. They aren’t users of these apps and therefore don’t understand how they can be used within their business. The easiest way for a business to overcome this is to become a user first, understand it from the audience perspective then apply that learning to their own business.
DH: What objections do you hear from businesses and what advice do you give them?
SS: The biggest objection is time. “We don’t have time for this”, my response to that is quite simply, “You said the same thing when e-mail first appeared”. E-mail is part of the normal run of business routine that we are all engaged with social media and the tools that enable it are fast becoming a part of the normal day.
Thank you, Simon!
There will be more from both Aaron Strout and Simon Salt below. Let’s dive into the basics.
The Basics of Social Location Marketing
Why Use Social Location Marketing?
Simon Salt says, ”Social location marketing has the ability to impact the purchase decision cycle at all points—brand awareness, brand elevation, brand consideration and purchase. The concept of the purchase decision cycle is best defined as the continuous loop through which customers become aware, consider, select and finally reconsider purchases.”
What can you use location-based marketing for?
These seven points from John Arnold:
- Deliver a coupon or a message to a mobile phone
- Display local ads to a person visiting a website from a specific location
- Deliver detailed product information when someone is standing in front of the product
- Offer incentives for location-based activities such as visiting a store multiple times
- Make it easy to find nearby things such as stores, ATM’s or even Coke machines
- Provide event, meet up and social opportunities based on a physical location
- Share location-based information with others in a social network
What Do You Need to Do To Get Started?
In the blog post, 9 Killer Tips for Location-Based Marketing by Shane Snow, Shane has some great tips for how to get started.
- Learn the platforms: Foursquare, Gowalla, Loopt, Brighkite, Yelp, Facebook. Most have iPhone, Android and Blackberry apps.
- Determine your goals, e.g. foot traffic, sell more of specific items, more patrons at certain time of day
- Establish your presence. He suggests listing your business on each network and put up notices or stickers e.g We’re on Foursquare, Find us on Yelp
- Customize for specific networks
- Implement Compelling Promotions and suggests advertising particular incentives e.g 20% between 2-4 pm
- Engage with your customers
- Track everything
- Be prepared to adapt
- Avoid common pitfalls e.g. don’t leave fake reviews or tips, don’t throw up poor designed ads
What are the Core elements of a Social Location Marketing Campaign?
Simon Salt suggests the following 7 elements:
- Fun—avoid check-in fatigue
- Measurable—don’t do anything you can’t measure
- Repeatable—return customers can repeat positive experience, new customers can have same
- Shareable—key is word of mouth, activity and reward should be something participants want to talk about
- Creative—do the unexpected, different or nontraditional
- Focused—don’t make too broad
- Reward—ensure reward fits the campaign theme
What’s considered a good offer?
I asked Aaron Strout what recommendations he has for businesses who are considering running a location-based offer?
“For businesses running a location based offer, my co-author, Mike Schneider and I have a couple of recommendations. One, make sure that the offer is compelling. That means giving someone 5% off or a chance to win a free t-shirt probably isn’t going to be enough. That doesn’t mean your offer has to cost a lot — sometimes experiences are much more valuable to your customers e.g. Have coffee with the owner or come to an exclusive wine tasting, etc. Second, try not to limit your offer to just the mayor. We call this the “Ben and Jerry’s rule coined from Ben and Jerry’s early offer on foursquare where anyone that checked in got three scoops of ice cream for $3 (normally $5). If you have high turnover for your mayors/leaders OR have a rich and compelling offer, than it might be worth doing a “mayor only” offer. Otherwise, consider rewarding frequency or loyalty.”
What does it require for the offer to be successful?
Simon Salt writes, “Campaigns that have two reward levels—one that is an intrinsic part of the app and one that is part of the real world—have a strong appeal to users of social location sharing tools. Status, badges, and recognition within the community of users is a motivator, but the addition of something more tangible to a campaign has a much higher chance of being talked about, shared, and commented on than simply the awarding of a badge within the game. This is a valuable lesson for marketers to bear in mind when thinking through the construction of social location marketing campaigns. There must be a real-world element for maximum effect. Users will not talk about your campaign if their only rewards are points, badges, status upgrades, or other game objects. For them to share with their network in a personal way, the reward has to be something that evokes a response at the personal level, preferably an emotion such as excitement.”
What do customers really want from location-based services?
Kunur writes in the Digital Marketing Guide: Location-Based Services, “Getting a deal seems to be the main draw for mobile location apps, while sharing with friends is a close second.” What do marketers get out of location-based deals? Kunur, suggest, “Driving new foot traffic into stores, some apps provide demographic data on user check-in.”
How have marketers without physical locations used location based marketing?
Kunur: “MTV, Bravo and History Channel were among the most popular brands on Foursquare in 2010 for creating programs that tied their content and TV personalities to real-world locales.”
Brian Goth describes several examples of brands without physical locations:
- Pepsi used Foursquare in association with Safeway customer’s loyalty cards.
- American Eagle on SCVNGR used a billboard in Times Square that asks consumers to complete challenges on SCVNGR in order to raise cash for Big Brothers Big Sisters
- Nissan on SCVNGR had people in Chicago, NY, LA and San Francisco complete challenges at 20 locations per city to earn points for a chance to win a new car
- Coca-Cola on SCVNGR partnered with 10 Simon shopping malls across the US to earn coke rewards good for American Express gift cards and Coke-branded merchandise.
- Buick used Facebook Places, Gowalla and Foursquare for the same campaign, a scavenger hunt which offers clues on Facebook and Twitter and then culiminates with a day of offline scavenger hunting.
Simon Salt, suggests that another option for a business without a publicly accessible location is the use of the trips feature within Gowalla, SCVNGR or Yelp. “By setting up a series of locations in the app that are in some way connected, and listing them as a recommendation by your business, you get brand awareness without any campaign.”
What Businesses Have to Say
We asked our business friends who spoke to us last week about Facebook ads whether they’ve ventured into location based marketing terrain. Here’s what they have to say:
While we don’t currently do a lot of location-based marketing for our clients, it is one of the tactics that we are constantly pitching as 2011 is really shaping up to be the “year of mobile.” We don’t currently use Foursquare or Gowalla deals for our business in particular, however, I always recommend claiming your business on Foursquare as a business owner, regardless of whether or not you plan to run a deal. Claiming your business allows owners access to a robust, real-time venue tracking dashboard for the following stats:
- Total daily check-ins over time
- Your most recent visitors
- Your most frequent visitors
- Gender breakdown of your customers
- What time of day people check in
- Portion of your venue’s foursquare check-ins that are broadcast to Twitter and Facebook
For the most part, the barrier to entry that we see with clients pursuing location-based marketing, especially for the local brick and mortar businesses, is lack of resources to dedicate to managing and monitoring – and making the return on (time) investment meaningful. I’ve found that for most small business, brick and mortar locations, the business logistics, the marketing, the operations, etc. is all being managed by the business owner and location-based marketing is not at the top of their list, unfortunately.
Another location-based platform to consider is Facebook Places. Just launched last summer, Places is a hybrid between Foursquare/Gowalla, Google Maps and Facebook. Businesses have the ability to claim their Facebook Place Page, allow check-ins and promote redeemable deals for checking in. If a business already has a Facebook Page, I would encourage them to claim their Facebook Place page, merge the Fan Page with the Place Page and launch a deal!
Anna Hutson, Formic Media, Inc.
“We started researching/using check-in type location services (Foursquare) in late 2009, early 2010. We haven’t used it a lot because most of our clients aren’t a great fit for this service. When Facebook Places started, that was a bit more interesting because Facebook was already such a large network (especially for a lot of our healthcare and technology clients). Most of our clients aren’t consumer/retail businesses, and there isn’t a lot of opportunity for location-based tools, unless you have “specials” to offer. For us, it was worth creating the profiles/locations for some clients, but only because it tied in with link building and local SEO efforts.” Rebecca Roebuck, Webbed Marketing
I’ve tried Google Places, and they disallow the type of location-based marketing I’d like to do. Since the business (Fitpacking) operates trips nowhere near the home office, I’d like to place a Google Places pin in areas such as Redwood National Park. But Google Places requires the business to have a permanent physical presence there. It doesn’t matter that much anyway. The “home office” pushpin hasn’t generated any interest at all as far as I can tell from the metrics I’ve seen. Steve Silberberg, FitPacking
We have set up deals on both Facebook Places and Foursquare, aimed at our existing students. For every 5 times they check in to Urban Martial Arts, they can get a free bottle of Vitamin Water. But so far, nobody has yet come forward to claim their free bottle, and I don’t see a whole lot of checking in going on.
I think that these location-based marketing platforms are still a couple years away from becoming mainstream. But we’ll keep the deal going and see what happens. Carmen Sognonvi, Urban Martial Arts
We are currently using location based marketing for a few of our clients. We started running Foursquare specials in 2010 and plan to continue these specials and add specials for Foursquare mayors. Tracking results on marketing campaigns is very important to us. Compared with Facebook ads, you can’t directly track phone calls and emails on Foursquare, but you can track check-ins. The end result from a valuable Foursquare special is either a repeat customer or a new customer walking through a business’s front door. Jennifer Haubein, Forthea Interactive
“Basically I don’t know how to use them effectively. I do have a profile on foursquare, but it seems geared towards businesses of a fixed location. My members are from all over and there is no one fixed location. However I though it would be cool to have a foursquare badge for my brainiac members.” Lawrence Chernin Brainiac Dating
Others reported back that they either haven’t looked into because they haven’t yet had the time, or they don’t think it speaks to their business or businesses of their clients.
Tell us about your experiences. Are you using locating sharing apps for yourself? Are you using for your business? What will it take for you?