Last updated: 03 August 2015
Location-based services (LBS) such as social media, entertainment or information services enable companies to connect with, and enhance engagement with their customers. LBS use the geographic location of customers either from their smartphone GPS data or, for feature-phones, cell ID data stored on the SIM. To ensure that customers consent to their location information being used or disclosed, companies must make sure their customers are always given the choice to opt-in to any LBS service.
The key assumption behind the success of LBS is that location is most often linked to a specific intent to buy, or research, products and services at a particular moment in time. The effectiveness of LBS for business is clear with an expected $10 billion in revenue generated from consumers by 2016. 20% of the world’s mobile users already use LBS, and 62% of those who don’t aspire to do so in the future. These figures suggest that customers value LBS as a welcome addition to the mobile experience:
Here are three ways that companies can tap into the potential of LBS to could significantly improve revenue:
- Geo-targeted campaigns
This is the easiest way to use LBS. You can send offers based simply on customers’ zip codes, with a click-to-action button linked to the desired store. For example, when launching a campaign for a new car, a dealership could send a tailored invitation offering a test drive to prospects and customers at their local branch. Toyota is using geo-targeting in their latest campaign via Snapchat, which is a pretty cool initiative!
Geo-fencing allows companies to send a contextual mobile message to users as soon as they enter a specific geographical zone. Ideally this zone is no more than six miles from the store. The advantage of geo-fencing is that it is based on real-customer movements with a short time-to-market. So you could send a text with a coupon for lunch at 11.30 a.m. whenever a customer is within a few miles of your restaurant. Studies have shown that this increases the chance by 60% that the recipient will visit the target restaurant over others in the same area!
- Geolocalized search
Geolocalized search can also drive traffic to your stores by uploading deals in your app that show product availability in participating stores. There are two important prerequisites for this to be effective; you must be able to show information from all your branches (including any partners), and you must be sure that the addresses and opening hours of all stores are up-to-date. We would recommend a daily update to take into account of holidays, store renovations or ad hoc closures.
If you’re interested in learning more about how we’ve helped companies use Location Based Services or other contextual mobile campaigns to maximize store traffic, check out our website. If you have any more questions, or would like to share your own tips on LBS, tweet us @Gemalto or leave a comment below.