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In a society where instant gratification is increasingly valued, location-based marketing is something that every marketer should have a good grasp on. In fact, it’s one of the biggest factors that allows businesses to target consumers on a personal, granular level just based on their physical location.

Location based-marketing helps marketing teams reach their target customers, purely based on proximity. Not to mention it helps aid the buyer’s journey from discovery to purchase — even supporting engagement and retention.

In this post, we cover the ins and outs of what location-based marketing is, how it works and how to create meaningful encounters using location-based marketing, as well as five examples of how brands applied practical ways to achieve marketing success.

What Is Location-Based Marketing?

Location-based marketing is a marketing strategy that uses a range of techniques — think push notifications — to target users with relevant and timely content and services based on their device’s previous and current location.

Often referred to as marketing, there are two popular types that marketers can use to help increase engagement and sales:

  • Geofencing: A location-based service that creates a virtual perimeter or geofence with smartphone data, WiFi, or GPS to trigger a desired marketing action.
    • Example: You walk past a Best Buy and receive a push notification with the message: ‘Sale ends today! Buy 1 phone cover, get 1 free’
  • Geotargeting: A location-based service that delivers content to users who meet specific criteria inside a defined perimeter.
    • Example: You own a pizza food truck and recently launched a veggie pizza option. You target users within the community that are interested in health, a vegetarian lifestyle, and local produce.

Now that you know the difference between geofencing and geotargeting, let’s examine the difference between location-based marketing and proximity marketing.

Difference Between Location-Based Marketing and Proximity Marketing

If you’ve been using these terms interchangeably, you’re not alone. Both work by targeting users based on their location, but proximity marketing uses a more granular approach.

We recommend that marketers use location-based marketing to target users across a wider geographical space. However, if you want to be more precise with your targeting, proximity marketing might be the better option. Advanced technologies such as beacons and Near Field Communication (NFC) can be used to determine the exact location of a user.

It’s important to note that proximity marketing does not require a geofence. This technique tracks users who are closer to a venue and takes into consideration historical purchasing habits such as time spent in a store.

How Location-Based Marketing Drives Conversions

How can marketers turn location data into opportunities to influence customers, clicks, and conversions? This is a common question and it’s generally followed by another: How can I send a timely promotional offer that users find valuable rather than annoying?

Let’s first look at four important marketing goals that should be included in your location-based marketing strategy.

  • Improving the customer experience
  • Prompting in-store visits
  • Driving transactions
  • Improving audience targeting

We’ve used six real-life examples and ways that you can use location-based marketing to create meaningful encounters with target customers that not only capture their attention but also prompt interactions and passersby to tap and convert.

How Location-Based Marketing Can Improve the Customer Experience

In a joint study by Forbes and Treasure Data, 74% of consumers polled said they are influenced to buy from a brand based on just the shopping experience*. While there are thousands of similar studies and statistics available, they all have one thing in common: a great customer experience is the backbone of a business and a successful marketing strategy.

Here are three brands and takeaways to demonstrate how location-based marketing can improve the customer experience.

Capture Feedback at the Right Time

Brand example: Google Maps

When is a user most likely to offer useful feedback? When an interaction with a brand comes to a close. The customer is reflecting on how they feel about their recent experience. One tech brand that leverages this well is Google Maps.

As you can see in the below example, Google Maps has sent the customer a proactive prompt to rate their visit to a local establishment once they’ve detected the user has completed their interaction there, based on device location. Rather than include a form to fill out, or boxes to fill in, the star option is quick and effective. This is the time to engage with a captive audience.

Key takeaway: Offer customers the opportunity to share how they feel at a critical moment, i.e.,  after they experience what your brand has to offer. Even if it’s a negative review, real-time feedback is an opportunity to understand your customers and improve their experience.

Remove Friction from User Journeys

When you think about the user journey, whether it has one, two, or 10 touchpoints, it’s essential that you remove any unnecessary friction and frustration for the user. After all, if at any point branded content is irrelevant, uninteresting, or ineffective to a user, that journey is broken.

This is where brands can use location-based marketing to help a user find exactly what they are looking for at the moment they are looking for it.

Brand example: Yelp

A local push recommendation based on location ticks two important boxes: it’s personalized and tailored to the user’s immediate preferences. This can help with short-term and long-term user retention. If a Yelp user receives a valuable recommendation in one city, it’s likely that they’ll look to the same brand to offer up a similar recommendation on their next adventure.

For brands that don’t have access to Yelp’s extensive restaurant database, don’t be put off. Regardless of whether you have connections to one or 100 recommendations, this approach shows users value — in and out of the app.

Key takeaway: Never miss an opportunity to assist a user by offering helpful resources. Map out your app’s user journey and find ways to offer value, big or small, at every step.

Steer Users in the Right Direction

Brand example: GasBuddy

Thanks to location intelligence, brands can connect with local foot traffic and encourage crowds to navigate straight toward a store or gas station based on their current location. In this example, GasBuddy shows value to its users through a data exchange approach. App users have the option to share their location and how much they pay for fuel.

In exchange, GasBuddy reveals gas stations nearby with better deals. This might be one of the reasons that the app reached number one in the Apple App Store in May 2021*. Geofencing provides a myriad of opportunities to steer the right people in the right direction at the right time.

Key takeaway: Implement a valuable exchange for your users and make the most of the location-based data that is available as a result. Find out the real-time needs of your customers and guide them to a relevant solution that saves them time or money.

How Location-Based Marketing Can Prompt In-Store Visits

As more stores open their physical doors again, it’s inevitable that foot traffic will increase. Since the beginning of 2021, retail foot traffic has increased by 12.5% YoY*.

This means that location-based marketing can, and will, prompt more in-store visits, interactions, and purchases. By sending a promotional message when an app user passes by a store, you have a good chance of enticing them to enter.

One way to do this: push messages. All customers, regardless of location, will receive this timely, relevant offer. Check out how Sephora did this.

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