How does location-based marketing work?

Location-based marketing is a great way for businesses to reach out to consumers. It enables companies to deliver targeted messages that are relevant and useful, increasing the chances of converting potential customers into actual ones. 

Take Starbucks, for example. They use their mobile app to send you coupons when you're near a store so they can entice you to come in and buy coffee. The location-based marketing campaign has been very successful – it's estimated that about 50% of all purchases at Starbucks stores are made by mobile payment now! Location-based marketing gives business owners an opportunity to connect with consumers on their terms using technology as a tool instead of just shouting from the rooftops about what they have available. In this post, we'll cover what location-based marketing is, how to use location-based marketing for your business, why you should be using it, the future of location-based marketing, who's doing it right now and how they're doing it, and the benefits of using this type of strategy for your company.

What is Location-based Marketing?

Location-based marketing is using location information to deliver personalized messages, offers, promotions, and discounts to your customers. It's an avenue for businesses to increase sales or awareness by reaching out through mobile devices based on a consumer's location. Location-based marketing will make sure that a message about a sale at a local business appears in the Facebook newsfeed of someone who's within walking distance of that location. It will direct an ad to a mobile device when it enters a specific location. You can even use the data collected to target visitors of a particular area later on. The location-based marketing industry is worth more than $6 billion today!

How to Use Location-Based Marketing for Your Business

Location-based marketing should be a part of every business's strategy. Here are some ways to use location-based marketing:

Geotargeting and geofencing. If you're interested in location-based marketing, then these are two of the most important terms you'll need to understand right away. Geofencing and geotargeting are location-based marketing tactics you can use. Geofencing uses location services on a mobile device to draw an electronic "fence" or virtual perimeter around a location, like your business. When the device comes inside that location, it notifies you or delivers a message because of your geofencing efforts. This is often used to send location-based coupons or advertisements because you know that a customer is in front of your location.

Geotargeting for location-based marketing, on the other hand, delivers location-specific ads based on location information. This can be done by IP address, browser info, GPS data from mobile devices, and WiFi signals from laptops and mobile phones. The location-targeted ad could be a location-based coupon or an ad for a location-specific promotion at your business – for example, a deal on food if you're close to a restaurant. It can also be used to target the visitors of a competitor's location so that you can advertise to somebody that you know is actively looking for something similar to your business's products or services.

Why You Should Be Using It

Location-based marketing can help you accomplish numerous goals. You could use it to increase the number of walk-in customers, encourage mobile app downloads, provide in-app advertising messages, send messages about special events at your business in advance, send messages when someone enters or leaves a location, monitor in-store foot traffic for better staffing purposes, and so much more! There are many options to choose from, and here are some specific goals you can accomplish with location-based marketing:

Increase foot traffic. If you offer coupons or discounts to customers who walk into your business, then it's likely that they will spend more money while there. Location-based marketing will help you communicate with potential customers when they're in front of your location so you can encourage them to come in and take advantage of your deals.

Stay top of mind. You can use the collected data to target customers with social media ads to remain relevant and keep your brand fresh in their minds.

Increase sales. Location-based marketing is effective because it keeps people informed about the products or services that they're interested in, which then encourages them to make a purchase. This means an increase in sales, which is critical for most businesses.

Increase brand awareness. If you're trying to make more people aware of your business, then location-based marketing can help! It will allow you to reach out to new customers in the right place at the right time. For example, if you're a retail store selling high-end clothing, location-based marketing could allow you to target men or women in your area who are likely to spend $50-$250 on clothing.

Encourage app downloads. Location-based marketing can help you encourage people to download your mobile app, which is critical if you want them to take full advantage of it or continue using it after they've downloaded it. Location-targeted advertisements can be a great way to get people interested in your app and encourage them to download it so they can use the features more easily.

Monitor in-store traffic. Location-based marketing is just one of the many different technologies that marketers are incorporating into their strategies for monitoring in-store customer traffic. Knowing how many people are coming into your location is a great way to see how well you're doing, and it can help you manage staffing and supply needs so that you never run out of products or inventory.

The Future of Location-Based Marketing

The technology behind location-based marketing continues to grow and progress, which means that its potential for helping your business will be increased as well. Location-targeted ads should become more specific and interactive over time, and the data and insights you gain from location-based marketing campaigns will make it easier than ever to determine how effective they are.

Who's Doing it Right Now and How They're Doing It

There are companies out there right now that are doing excellent location-based marketing. Here are some of the best examples of this trend at work:  

1. Retailers can do things like offer Location-specific coupons or deals if people check in to their locations on Foursquare, Facebook check-ins, and other social media platforms.

2. Spas, salons, and other location-based service businesses can offer location-specific promotions for people who visit their locations or even a competitor's location to increase conversions and get new customers.

3. Restaurants are an excellent example of a business that can do location-based marketing right because restaurants have the opportunity to offer special offers based on people's location when they're searching for a business to visit.

5. Movie theaters can do location-based marketing by offering deals and discounts to people who check-in at their locations.

6. A jewelry wholesaler can target business owners attending a jewelry convention, and target them with future ads after using the data collected.

7. A new feature on Amazon lets customers check-in at local stores to see if anyone is selling their products there so Amazon can do location-based marketing with this information, which is a great tool for retailers that sell on Amazon when they're looking for new locations to launch their businesses in or sell their products locally.

8. If you have a retail store that's near an airport, then it's important to think about how you can use this information to your advantage by creating deals and discounts for people passing through the airport so they'll visit your location when they have free time on their hands between flights.

What are the Benefits of Using This Type of Marketing Strategy For Your Company?

There are several benefits of using location-based marketing for your company, which is why this tactic has become so widely used in just the past few years. Here are some of the main benefits you can enjoy when you use location-based marketing for your small business:  

1. Location-based marketing works great because it targets people who actually need your services and products. This means more conversions and sales for you, which is ideal for any business owner.

2. Businesses that use location-based marketing can get access to actionable data that helps them create better, location-specific advertising that people will notice and appreciate when they get the opportunity to look at it on their devices.

3. People who do location-based marketing on social media and on their websites can enjoy more repeat visits from customers, increased word of mouth advertising on the web, and a better overall online presence than businesses that don't use this type of marketing strategy.

4. Location-based marketing is great because it's something new and innovative for you to try. This means it's always relevant and effective because people will notice your offer, which is more than can be said about traditional marketing tactics that are being used less frequently these days for this exact reason.

5. Location-based marketing works best if you do something extra special, which is why it's great to use with any of your existing marketing efforts. Using both traditional and location-based marketing tactics together is an awesome way to ensure you attract more customers, sell your products and services more frequently, and increase your conversion rate right away.

Location-based marketing is a powerful way to reach customers in their natural surroundings, but it’s not the only form of location-aware advertising. Whether through mobile or desktop devices, there are many ways that you can engage with your customer base and draw them closer to your brand. If you want to learn more about how this type of marketing strategy could work for your company, contact us today! Our team will help you develop an effective location-based marketing plan tailored specifically towards your business needs. What way could you see your business using location-based marketing effectively? Let us know in the comments below!