How Location Based Marketing Works
February 2, 2010 by David Lanning · View Comments
About the author: David Lanning is the founder of Tweetalize and CEO of Galapagos Collection, Inc. David has more than 20 years of experience in the retail industry with a specialization in retail promotions and online marketing. Read more from this author...
I’m sure you’ve noticed the growing popularity, and buzz, surrounding smart phone applications that have people checking in at various locations. From the gas station… to Gate 31A at LAX… to Applebee’s, people are Tweeting their whereabouts. Why? Is it just a way to pass the time? Are they looking for other people? Are they simply playing a game?
Those are all part of it. But, there’s much more to it when you look at it from a marketing point of view.
As retailers, we need to pay close attention and look deep into trends as they’re taking shape. We especially need to sit up and “listen” when consumers are doing things that can have a direct impact on our business.
So, what kind of opportunity does all this Twitter hold for your business?
Look for a second at the technology. New reports forecast that Apple will sell 50 million phones in 2011, and more than 80 million in 2012, as worldwide expansion and popularity of the iPhone continues to grow. Last April, the 50 millionth Blackberry phone was sold. And, now the new kid on the block, the Droid, is shaking up the smart phone world. What do all of these phones have in common? GPS technology… your location can be pin pointed to within a half mile radius.
And, as these smart phones become less and less expensive, the majority of consumers will be trading in their old cell phone for a flashy new smart phone as their contracts come up for renewal. Google has a huge interest in making sure that all the world has a smart phone as they move into mobile ads. Do you think it would be difficult for Google to give away their Nexus One droid phones? The answer, of course, is no. Not considering the enormous revenue potential of splashing ads on your phone.
Well, back to the games.
There are a few players that have big financial backing (which tells you a lot) including FourSquare, Gowalla and Yelp.
The concept is simple. You download the app onto your phone and check into places you frequent throughout the day. As you check in, you see who else has been there. You also usually find a trivial object that you can keep, leave or swap. It’s just a virtual prize… for now.
But what about you as a retailer? How valuable is that information?
Think about this scenario. Jane Smith is within a half mile of your dress shop. And, Jane Smith has just left Sally’s Salon and is now at Rachel’s Shoe Emporium. How powerful would it be for you to be able to send a coupon to Jane for 25% off any dress purchased today as she checks into Rachel’s on Gowalla!
This is location based marketing. And, the sooner you get in on it the better. And the way you can get in on it now is by participating and playing the location game.
Every single, retailer and marketing professional must have a smart phone. NOW!
Pay the damn upgrade fee, pay the early termination fee, and pay whatever you need to get a smart phone today if you don’t already have one. You can’t afford to be in the dark on the impact that social media and location based marketing will have on your business.
Then get these applications from Gowalla, FourSquare and Yelp and use them. Understand them and think about the marketing potential.
You’ll hear much more about location based marketing and location based media in the days to come. But, the only way to truly understand what it’s about is to get in on it.
Have fun, play the location game and cash in your virtual currency a little bit later.
