Why Having a Location-first Marketing Strategy Pays Off

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Social networks have gone mobile over the last decade and that mobility has unlocked a treasure trove of location-specific data for businesses to thrive over competitors, writes Carlos Garcia in this opinion piece. Garcia is the co-founder and CEO of HYP3R, a location-based engagement platform headquartered in San Francisco.

Ask real estate agents today the three most important factors in marketing a house, and they will tell you that these are “location, location, location.” Location has long been considered essential in many industries. In manufacturing, for instance, location matters because access to raw materials and a qualified workforce are critical to success. And in retail, having a storefront on a town’s main boulevard versus a side street can greatly impact walk-in sales. In short, profitable business growth has been viewed as a function not just of what a company does but where it chooses to do it.

This perspective about location, long regarded as a time-honored pillar of marketing, faced a dramatic challenge some two decades ago with the arrival of the world wide web. With the widespread adoption of high-speed internet during the 1990s, geography no longer was a barrier to communication or to business. New York Times columnist Thomas Friedman, British economist Frances Cairncross and other experts wrote about the “death of distance.” They noted that this newfound connectivity eliminated — or at least diminished — the importance of location. Businesses didn’t have to be where their clients were; instead, they could now reach consumers through the cloud anytime, anywhere.

Consumers, too, could reach far beyond their immediate locations to buy products or services. A reader in New York City who wanted to buy a book from Amazon in Seattle could do so at the click of a mouse. So why pay attention to location? In the online world, the argument went, where you are based no longer matters.

Or does it? Today, thanks to the explosion in mobile technology, the perspective on location is changing again. In recent years, smartphones and social media have made a massive impact on the way consumers communicate and businesses advertise. The Pew Research Center reports that a whopping 95% of U.S. adults own a cell phone of some kind. Another study reveals that 80% of social activity is done from mobile devices — meaning that people are posting content on the go. And the U.S. is hardly alone. The Independent reported in 2014 that the number of mobile devices — 7.2 billion — had surpassed the number of people on the planet.

So what does this have to do with location? With skyrocketing mobile usage comes accurate location data, enabling businesses to understand exactly from where people are publicly posting on social media. They can then use that additional layer of context to deliver messages in the right place at the right time. This lets businesses cut through the noise and find the right moment to engagerather than to interrupt. The outcome is a more organic, human-to-human interaction between companies and consumers.

As a result, the pendulum is swinging back. Location is once again becoming a primary focus of marketing, as all consumers who have seen pop-up messages seeking permission to know their location are already aware. Major social media platforms looking for advertising dollars are developing location-based, mobile-first products and features. For instance, just last month, Snap Inc. launched Snap to Store, which tracks whether sponsored geo-filters boost visits to the brand’s locations.

“With location, social media is … about meaningfully engaging with the people who are arguably your most valuable customers — the ones at your locations, right now.”

With this shift come new opportunities. Businesses that are able to re-evaluate and re-think the role of location in marketing, and how to best capitalize on all available data, will be better positioned to grow profitably over companies that fail to do so.

With new data, companies can now measure, track, benchmark and optimize marketing performance in ways that were not possible in the past. In today’s social media-driven world, having a strong online presence leads to increased revenue. That has led to an emergence of companies that provide ways to rank and measure activity at different locations, such as TripAdvisor and Foursquare.

For our part, we have developed a Geosocial Index, a standardized, location-based social activity metric. It measures public social activity at key locations to calculate a real-time ranking for each location. Businesses can use it to benchmark their locations’ social activity and to compare their locations’ scores to others within their portfolio and across their industry. If, for example, a hotel sees that its competitor across the street has a higher score, they can dig deeper to see exactly what kinds of social engagements that hotel is participating in. This could inform a new strategy or suggest fresh engagement tactics.

Why Location Matters

With location, social media is not just about publishing great content and hoping people will engage with it, or listening to what people are saying and reacting if there’s a customer service issue. It’s about meaningfully engaging with the people who are arguably your most valuable customers — the ones at your locations, right now. These people are experiencing a product or a company in real life. It’s the moment of truth for determining brand preference.

Industries that are inherently social and experiential (i.e., “shareable”) — such as travel, restaurants, sports and theme parks — are ripe for location-based marketing. In fact, people post 10 times more on social media while they are traveling. For these industries, customer experience is critical. Businesses that go above and beyond, leveraging marketing technology tools to provide the best experience possible, will ultimately win in the market.

Here are a few ways that location-based marketing can contribute to business success:

  1. Be surprisingly human

Location data enables businesses to delight their guests in unexpected ways, creating powerful moments through timely responses. For example, imagine a New York Yankees fan who tweets from the game, saying that while he has been a lifelong fan, today is his first time at the stadium. The Yankees’ social media manager can use marketing tools to discover the public post, even if it’s not geo-tagged, and craft a short but powerful response: “Welcome home.” The fan then responds with how touched he was: “The Yankees commented on my post — my life is complete!”

Combining location-based intelligence with mobile connectivity lets marketers take “surprise and delight” to the next level by bridging the digital and physical worlds. Consider another example. Suppose a couple gets engaged at a hotel and posts about it publicly on Instagram. With a location-based marketing platform, the hotel manager could receive an alert about the engagement and send a bottle of champagne to the couple’s room. Over time, such thoughtful touches can allow hotels to build enormous loyalty — a natural outcome of emotional resonance — among their guests, who feel treated as individuals rather than part of an anonymous crowd of customers.

  1. Capitalize on the ripple effect

When guests are delighted by these enhanced experiences, chances are they will post about them on social media. In fact, after interactions like the examples above, we have found that many users go on to follow the business or reply with a mention. When happy customers post about or engage with companies, it serves as an implicit recommendation — allowing businesses to reach beyond the individual and drive affinity and loyalty among the consumer’s network of friends and followers. And word of mouth, as everyone knows, is the most credible form of marketing.

  1. Keep an eye on the competition

Ever wonder how much people post from your competitors’ venues and events? Another benefit of location-based marketing is being able to surface public social activity at competitors’ locations and then using that as a benchmark for your own social performance.

Location is Going Places

Companies that fail to think about a location-first marketing strategy are likely to miss out on opportunities to engage deeply with their customers and attract new ones. According to a 2016 study, 75% of brand marketers believe location-based marketing is an important element to their business strategy. New research from the Location Based Marketing Association (LBMA) has found that more than 50% of brands are using location data to target customers, with 25% of marketing budgets allocated to location-based marketing tactics.

“What we’re seeing today is companies using location-based marketing tools to build relationships with individual consumers through social media in a very human way.”

We believe location’s role in marketing will continue to grow. Advertising research group BIA Kelsey predicts that geo-targeted ad sales will rise from $12.4 billion in 2016 to $32.4 billion in 2021. As Facebook, Instagram, Twitter, Snapchat and other major social networks battle for advertising dollars, we expect them to develop even more ways of seamlessly integrating location into their products.

The Future of Marketing

In the past, location-based marketing largely focused on anonymous tracking via beacons, Bluetooth and branded apps. If all those elements came together — i.e., consumers installed the apps, enabled Bluetooth on their phones and walked by a functioning beacon — then they would receive a prompt or an offer on their phones.

But what we’re seeing today is companies using location-based marketing tools to build relationships with individual consumers through social media in a very human way. All the rules of human-to-human marketing (being personal, empathetic, conversational and authentic) still apply — but because businesses now know when consumers are at their location, they have an even better understanding of their experience.

In a way, marketing has come full circle. In the past, businesses had direct interactions with customers in a physical place like a market or a store. Next came the use of broadcast media to share one message with millions of people at once. And today, we are back to building relationships with individuals at locations — but this time it’s happening through the cloud. Thanks to technology, businesses can discover all public posts at their location and create easily executable engagement protocols, ushering in a new wave of human-to-human marketing at scale. The result is marketing strategies that are efficient for businesses and delightful for consumers.

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