Online Marketing & Digital Marketing

Location-Based Marketing: What It Is and How It Works

By Shanon Roberts, on 8 March 2022

One of the clearest examples of how cutting edge technology can be applied in marketing is the use of customer location. Practically any company can take advantage of this to become more visible online and impact potential customers with greater precision on their mobile phones.

Let's take a closer look at what location-based marketing is and how it works!

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Location Based Marketing What It Is and How It Works

 

What Is Location-Based Marketing?

Location-based marketing is a practice that has grown over time as mobile devices have become increasingly dominant. The Mobile Marketing Association describes it as any application, service or campaign that includes the use of geographic location to deliver or optimize a message or service. In other words, it allows brands to determine if customers are close to a retailer of theirs and then target them with messages about products or services based on their location.

This type of marketing strategy is quite adaptable and allows for precise targeting. Instead of treating customers as a homogeneous group, location-based marketing takes into account specific personal and cultural characteristics.

 

How to Do Location-Based Marketing

 

Know Your Traffic Flows

When it comes down to creating a location-based marketing strategy, focus on locations that have abundant traffic and that allow you to reach a significant audience. Choose the places in your surroundings that have a critical mass of traffic and think how you can develop your campaign to target people there. Similarly, think of events that may bring major traffic, like Black Friday.

 

Don't Overdo It

Some marketers focus on quantity over quality when it comes to getting traffic. While this may seem like a good idea (the more, the better, right?), it is not. If, for example, nail polish does not interest a person at all, receiving a push up notification for it will have no effect on them and will not benefit your brand in any way. Therefore, you should be intentional about where and when you place your ads.

 

Customer Service Is Your Best Friend

Push notifications may annoy some customers, so you have to make sure that your offers are appealing and that you don't bombard people with notifications. Focus on improving the customer experience. Most consumers decide whether or not to make a purchase based solely on their shopping experience, so asking customers for feedback can be a great way to show them that you care about them and their experience. It can also give you valuable information on how to improve your product or service.

 

Types of Location-Based Marketing

There are several different ways to approach location-based marketing, so let’s take a look at some of them.

 

Geotargeting

This method allows businesses to send tailored messages to customers in a specific geographic area. It is the most widely used, and it can be done via web search engines or even Facebook by scheduling ads based on the location of your customers. 

Geotargeting uses IP addresses from users. Every device on the Internet has an IP that identifies it and shows the country, region or even district.  Its degree of personalization and accuracy can be harnessed to create a a better customer experience.

 

Geofencing 

Geofencing is about setting a virtual perimeter around your physical location so that people only receive notification on their phones when they are in this specific area. For example, some supermarkets use it to send promotions to their customers’ phones when they enter the store.

Unlike in geotargeting, geofencing uses GPS to set boundaries. The fact that it uses real-time location data makes it easy for marketers to target their ads successfully.

 

Beaconing

Beacons are essentially devices that use Bluetooth or Wi-Fi to help small and medium-sized businesses locate users and send them relevant information based on their current location. Beacons send a signal to devices that then causes a server to send out particular content, such as an email or a push notification.

 

Geo Conquesting

Geo conquesting is a rather controversial method as many consider it a form of unfair competition. The way it works is that it uses location data to try to discourage people from visiting competitors. For example, it would be like walking by a Burger King and getting a notification from McDonalds so that you change your mind about where you will go and spend your money.

 

Benefits of Location-Based Marketing

Every location-based strategy works a bit differently, but they all have a number of benefits in common. 

 

Getting to Know Your Clients

Location-based marketing allows companies to get to know their customers on a more personal level since it is based on data retrieved from mobile devices. Marketers can use this to their advantage to increase reach. 

 

Improved Customer Loyalty

When coupled with good customer service, using location-based strategies will help drive customers back to your stores. Building trust and customer loyalty should always be the first step, but these things can be facilitated through location-based marketing strategies

 

Boosting Engagement

Another benefit of location-based marketing is that it will increase engagement. Like marketing segmentation and geographic targeting, advertising will become easier to conduct and this in turn can lead togreater brand awareness among consumers.

 

Reduced Costs

The economic cost of location-based marketing tools is minimal, as many of them are free of charge. Even Facebook has one you can use!

 

Data Collection

You can collect information from campaigns that you have launched to get detailed insights on how your customers behave while shopping. This can help you optimize your campaigns and improve their range and degree of effectiveness.

With so many advantages in terms of impact and precision, location-based marketing can help you reach your target audience and boost sales. Just make sure not to overdo it.

 

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Shanon Roberts

International Digital Marketing Strategist