The Ultimate Guide To The Pros And Cons Of Location-Based Marketing

Location-based marketing, in easy-to-understand terms, is the process of targeting users based on their current or previous locations. It is made possible by using location technology so that users can be targeted with advertisements and notifications based on their geographical location, be it their proximity to a store or events being held in their region. It allows businesses to connect with customers at a granular level in a segmented manner while improving customer service. Here are some facts that organizations, big or small, need to know about location-based marketing.

Where It Works Best

Location-based marketing creates a ripple effect on any business. However, brands with physical locations are best suited to location-based marketing. The organizations are the best fit for geo-fencing marketing companies for their geo-targeted campaigns and can create audiences based on real visits rather than behavior on social media. 

Auto Dealers

The large retail footprint, high price tags, and purchase cycle sometimes make it difficult for companies to reach car shoppers during the last phases of purchase. Auto dealers can benefit from location-based marketing to reach customers interested in the competition and gain more visibility in front of them. Geo-fencing uses location data to divert prospects away from competitor locations. For example, car dealerships might create a boundary around a competitor’s lot. When a target consumer comes within the boundary, they will be sent an offer to users that encourages them to visit the other dealer.

Seasonal Stores

Brands that do not function throughout the year can also create successful geotargeting campaigns. Holiday stores, pop-up offices, and seasonal businesses that involve time-specific events can benefit greatly and rake in revenue. Marketers use audiences seen at their locations in the past, encouraging return visits. Seasonal stores remain etched in the consumer’s memory due to the fear of missing out factor.

Others

Consumer-packaged goods companies that use specific stores for storing their products can also use location-based marketing. E-commerce companies, whether they have physical stores or not, will always seek to sniff out the audiences that visit competitors that do have stores.

What To Avoid

No matter what the strategy, it has its limits. Location-based marketing is no different. Here are some areas where it is best avoided:

Widely Available Products

For niche and exclusive products, location-based marketing is a dream. But if the product or service was available just about anywhere, this strategy would have a low chance of showing results.  Common and everyday products like detergents, soft drinks, or regular candy do not benefit from location-derived information. In these cases, marketers should focus on using other, more traditional targeting methods.

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Locations That Don’t Work

Often, the location itself serves as an impediment to developing a successful location-driven campaign. This can be due to a variety of factors like less foot traffic, unreachability, over-clustering of businesses in one place, and difficulty separating the consumers from the inhabitants. Any location used for a business must be easily accessible and have facilities like abundant parking and amenities.

Sensitive Businesses

Sensitive businesses such as healthcare offices have certain rules and codes of conduct that do not allow marketers to create audiences around them to avoid creating any discriminatory practices. Privacy compliance firms have requirements for membership and acceptable business practices that must be met. They also govern the ability to track or target any person on an individual level. 

Conclusion

Location-based marketing is an important tool for organizations to increase sales revenue and brand awareness. It helps them get to know their customers at a grassroots level. Companies can evaluate how their campaigns impact footfall at their locations as well as at the competitors’ doors. This will help them measure and re-evaluate their budgets and strategies. A look at the dos and don’ts of this marketing tool will help you hone in on what exactly your business needs. Knowledge and knowing what works is the cornerstone of any successful campaign.