Location-based Marketing: A Guide for 2022 and Beyond

In 2019, our dependence on smartphones to navigate the world around us was already on the rise. The COVID-19 pandemic, though, took that to a whole new level. 

Across the globe, COVID-19 has reduced our interaction with physical things, and digital alternatives have emerged. Casually enrolling for a class isn’t an option anymore, so we rely on online learning platforms.

We can’t have physical conferences, so we depend on webinar software. But there is still a lot of unexplored potential in the digital sphere, especially for marketers.

Location-based marketing is an idea whose time has come. As we rely increasingly on our phones for our basic needs, physical stores cannot lay back and expect that customers will just enter their shops.

This year has made us all scared to experience new things, especially those that involve physical contact. But a lot of businesses depend on physical interaction. For the new, overly-cautious world that we now live in, location-based marketing is a tailor-made solution.

What is Location-Based Marketing?

Location-based marketing is a marketing technique that uses a smartphone’s location to alert its owner of a deal or promotion by a nearby business.

It’s a simple concept. When a business buys an ad in The New York Times, they’re targeting ‘readers of the New York Times’. There was a time where that was the limit of personalization you could have. Not anymore. 

With the help of smartphones, location-based marketing takes content personalization to a whole new level. You can now have an ad that targets ‘people who are standing in Times Square.’ The power of this strategy for storefronts, among other businesses, is immense.

Types of Location-Based Marketing

There are different ways of implementing location-based marketing depending on your specific requirements – geofencing, geotargeting, and beacons.

1. Geofencing

Geofencing is a location-based marketing strategy that serves ads or content to customers based on their real-time location. It’s simple – if a person is within your target fence, they will see your ad.

How does this work? Usually, a customer will get an app on their phone (like Facebook, Snapchat, or the Nike app) and give that app location access. Now, the app can show them content or push notifications based on their current location.

For example, Nike may choose to send a push notification to its customers in Philadelphia about a discount on their local store. The app will know which users are in Philadelphia at the time and send them an ad accordingly.

The most popular geofencing tools for advertisers currently are apps like Facebook, Instagram, and Google.

The apps have access to the location data of users and can show them your ad to users in a specific location. For small local businesses, geofencing can be a tremendously powerful marketing tool.

If you want to advertise to people who are thinking of visiting a specific city or location but aren’t yet there, another powerful marketing tool is native advertising. Native ad networks can help with contextual targeting, such as articles mentioning the location you want to promote, as well as other forms of personalization, advanced targeting, and retargeting options.

2. Geotargeting

Geotargeting is a slightly more advanced location-based marketing technique. Instead of using real-time locations, It targets users based on their location history. If a person has visited a place you’re targeting, they will see your ad.

Apps that can access your location also have a database of your location history. So if you’re promoting iPhone cases, you might target people who have been to an Apple store recently.

Geotargeting is all about what having been to a certain place says about a customer. As a business, you need to figure out the locations your potential customers frequently visit.

Target those locations, and you have a good location-based marketing campaign.

The most famous example of geotargeting is when Burger King launched its ‘Whooper detour’ campaign last year. As part of the campaign, Burger King offered people within 600 feet of a McDonald’s a Whopper for one cent.

It was a successful campaign, leading to 1.5 million downloads of the Burger King app. 

Brands are only now starting to explore the potential of geotargeting. As is clear from Burger King’s campaign, such strategies can be hugely successful if implemented tastefully.

3. Proximity Marketing

Proximity marketing is a location-based marketing technique that targets customers who are just within a few feet of a certain spot. Businesses can leverage proximity marketing using beacons, NFC, and QR Codes.

A beacon is a Bluetooth device that connects with nearby Bluetooth-enabled smartphones and displays your ads to them. Beacons can be powerful for stores inside a marketplace or mall looking to attract more footfall.

For proximity marketing to work using a beacon, your target customer will need to have your brand’s app installed on their phone. They will also need to have Bluetooth enabled.

You can also implement proximity marketing without using NFC and QR Codes. You can put NFC tags or QR codes at a location, or on a product, with an effective promotional text that makes them curious.

Customers can scan them using their phones to know more.

Creating QR Codes is especially seamless. You need a trustworthy QR Code Generator to create customized QR Codes and given the level of consumer awareness, thanks to the push towards contactless, consumers instinctively know what to do when they encounter a QR Code.

Unique Benefits of Location Based-Marketing

Businesses are slowly but surely realizing the power of location-based marketing. In a survey conducted by Factual, more than 8 out of 10 marketers said that location-based advertising and marketing produced growth in their customer base.

For businesses looking to target a local audience, location-based marketing is a no-brainer.

1. Generate Good Quality Leads

With Facebook and Google collecting all kinds of customer data, ad targeting has become really precise. Businesses are using advanced SEO tools to reach customers. 

But in 2020, location-based marketing is still the most robust targeting method. Here’s why.

People may have certain interests or consume certain types of content. That’s passive data. Where they go, however, reflects real interests. Especially in 2020, going out has acquired a special significance.

By targeting users based on their location history, you’re acting on when these users are most active and ready to take action.

Let’s take an example. You want to target customers who are interested in books. You may do this by seeing which customers liked a certain author page. Or you may do it by targeting those who recently visited a bookstore.

The latter option will turn up much better leads primed to take action. That’s why location-based marketing is a powerful targeting strategy.

2. Convert Impulses To Sales

Proximity marketing using Beacons or QR codes can really help you nudge customers who are already near your store. Here’s how.

When a customer is near your store, they might want to enter but hesitate for certain reasons. They might not want to spend on your product or worry about their safety in the pandemic.

Using beacons and QR codes, you can address these concerns. If a customer is nearby, you can send them a discount offer using a beacon. You can even send across a message assuring them regarding your safety precautions.

Proximity marketing is all about knowing how to get customers to take the last step. Guess your customer’s impulses and help them take action to increase sales. 

3. Attract Customers You Wouldn’t Have Targeted Otherwise

This is one of the most interesting benefits of location-based marketing. You might be surprised by who’s interested in your product. 

When you use customer data to customize who you target, you can leave out some leads. With geofencing, there’s no leaving out. As long as a person is within your town or city, they will see your ad.

Location-based marketing helps you avoid the only downside of targeting. It’s great to know what your customer base is, but it’s also important to leave space for surprises. With location-based marketing, you let yourself be surprised.

How To Use Location-Based Marketing in 2020 And Beyond

For marketers, 2020 presents a unique challenge but also a great opportunity. Local stores need to make use of location-based marketing if they want to stay competitive.

In 2020, the world as we know it has fundamentally changed. Marketers will need to adapt. Here are a few tips on how to effectively use location-based marketing in 2020 and beyond.

1. Make Customers Feel Safe

For any consumer-facing business, this is perhaps the most important guideline of 2020. Businesses have found unique ways to help customers feel safe. Location-based marketing can be very useful in this regard. 

Let’s take the example of Ron. He’s a guy who likes to eat out and used to be a regular at his nearby restaurant. But since the pandemic happened, Ron hasn’t eaten out. He’s worried about his safety.

There’s no reason for Ron to be worried, though. The restaurant sanitizes regularly and takes all kinds of safety precautions. If only this restaurant could reach customers like Ron and tell them they don’t need to worry. Using location-based marketing, it can.

Using geofencing, businesses can run safety campaigns making their customers feel secure. This would be a huge step in getting back up after the pandemic.

2. Offer Surprise Discounts To Customers Nearby

With digital products, games and surprise discounts have become really popular. There’s nothing better than an air of suspense about an offer.

When a customer is near your store but not quite planning to visit, you could offer them a slight nudge. Have a QR code or NFC tag outside that randomly gives them a discount on products inside your store.

People who are already nearby will want to try their luck. If they end up with even a small discount, they will want to enter your store and see what that’s worth.

Attracting customers to a store in the age of e-commerce is generally a challenge. With a pandemic, that challenge is increased ten-fold. With proximity marketing, you can at least make sure you attract customers who are just a few feet away.

3. Pick The Right Platform For Your Goals

With location-based marketing, there are a lot of options. You could rely on social media sites like Facebook or Instagram, or go the route of making your own app. 

Decisions like this will depend on what your goals are. If you’re a small business in a city then it’s likely not worth the effort to get your own app. You’re better off using a platform.

Small businesses that are in hidden locations see a lot of success with geofencing and geotargeting. You can show ads to people in central areas and attract them with discounts.

For businesses in popular markets that see a lot of footfall, proximity marketing is the way to go. Offering discounts and promotions using QR codes and NFC tags will be the most ideal choice.

If you are or aim to be a large brand, having your own app can give you benefits beyond marketing opportunities, like customer loyalty. But your app will help you use location-based marketing features with no additional cost.

A big advantage of having your app is the added support for beacons. As a brand, investing in an app will help you create a comprehensive location-based marketing strategy.

4. Offer Opt-Outs To Respect Customer Privacy

Location-based marketing is not something we’re alright with yet. Customers remain cautious of sharing too much with giants like Facebook and Google. 

The ‘creepiness factor’ keeps a lot of businesses from implementing location-based marketing. A study by Retail Systems Research (RSR) found that for 59% of marketers, privacy is one of the main reasons they don’t do location-based marketing. 

No business wants to make target customers feel creeped out. But that’s no reason to turn away from location-based marketing. Some customers may be creeped out by strategies like geofencing, but there are ways to make your campaign less creepy.

One of the most effective ways to do that is to have a clear opt-out button on your campaign. It makes customers feel empowered rather than exploited. 

There are also location-based marketing techniques that don’t bring any privacy concerns with them. QR codes and NFC tags, for example, don’t collect users’ location data. Even beacons just send information to nearby phones instead of tracking them over long periods.

Conclusion

For the longest time, physical businesses have resented the digital sphere for the added competition. But these businesses know that they cannot afford to be on the opposite side of the digital revolution any longer.

Location-based marketing is an opportunity for physical stores to utilize the powers of the digital ecosystem to their advantage. 

Whether you’re a small shop looking for a new way to attract customers, or a multinational who wants to offer an integrated experience, location-based marketing is useful for everyone.

All you need to do is figure out how best to use it to your advantage.

The COVID-19 pandemic will leave a permanent dent in our world. We will now increasingly rely on our phones to tell us where to go and what to do. 

Location-based marketing is going to play a huge role in how businesses reach customers. There’s no reason why you should be late to the party.

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