Creating Value with Location-Based Services

Location, location, location! With the latest social media craze, it’s no longer enough to say what you’re doing; now you you have to let people know where you are. And while “checking in” on Gowalla or Foursquare to accumulate virtual souvenirs and mayorships is all in good fun, perhaps it is time to look beyond the games to a day when consumers will have come to expect relevant brand experiences based on where they are and what they are doing at any given moment.

If she’s a big fan of your brand, she’s likely open to letting you know where she is. Promise to deliver something she values, without annoying her, and she just might agree to let you know her whereabouts—at least some of the time. Or, at a minimum, she may be willing to let you know that an anonymous 30-something female is in the proximity of one of your stores.

Given the explosive growth of smartphones and social media, and with location-based services still in their infancy, now is the time to explore contextual targeting scenarios that create value for your customers and your business. Just as broadband paved the way for rich media content, the combination of smartphones and location-based services is opening the doors to much richer digital experiences for people on the go.

Macy’s is now testing in select markets an app that gives consumers rewards and other services as they shop in-store. Martine Reardon, EVP of marketing and advertising, said, “If a customer walks into our north side entrance and we have a great special event in our juniors department and we know she’s a juniors customer we can deliver her an offer. Or if we know this customer is an avid Clinique customer and Clinique is offering a deal, if she’s in the mall we can tell her ‘your favorite brand is offering a deal.’” (“Mobile Shopping from In-store: A Potential Game-changer,” June 2010, eMarketer)

Okay, that’s one business application of location-based services. Now consider what else we can do when we know more about a customer’s immediate context:

  • Auto company targets a message to smartphones within 2 miles of its dealerships: “The all new Z has arrived. Swing by and see it for yourself at [dealer name].” Provides directions to the dealership.
  • Sporting goods manufacturer targets mobile ad to golfers on or near the 6th tee at Spring Lake Resort (800 yards, par 6). “Drive the distance with Plutonium clubs.” Provides up-to-date information about the 6th hole—distance, hazards, hole position.
  • Insurance company targets mobile message to all policyholders in the path of a storm. “Severe weather approaching… take these important precautions….” Provides local radar image.
  • Grocer pushes a mobile offer to all of its Facebook fans who are at or near the store between 3pm and 7pm on Friday, enticing them to sample and rate the new jalapeño tuna roll. 10 people sample, 7 recommend, 700 friends hear about it.
  • Fast food chain tracks Sesame Street Live tour as it makes its way through entertainment venues across the country. Targets a mobile offer to phones at venues: free kid’s meal with purchase of a regular meal.
  • Computer company targets mobile devices at a technology conference in Vegas. Offers mobile app for navigating the conference and scheduling meetings with company representatives at the event.

The possibilities are endless for marketers, but there are also opportunities across the extended enterprise. Consider the location-oriented information that exists in organizations today: customers, stores/branches, distributors, agents/advisors, employees, inventory, order status, traffic, weather, venues, flights, ZIP code—the list goes on.

How can we use this information to better engage and service consumers/customers, partners, employees, and other audiences? And what about product development? How can we increase the value of existing products and services using time and location information? What new, innovative products and services can we create with this data?

The best way to get started: assemble a cross-functional group to explore unique opportunities for creating value with location-based services. If your company already has a presence with mobile apps (iPhone, Android, Blackberry, …), consider where location could add new value for your business and for the audiences you serve. For companies just getting started, location can be a major part of your initial mobile offering. Look for ways to bake location into your first mobile app. Embrace experimentation. First-mover advantage can be very significant in areas of explosive growth.

Use the approach outlined below to get the ball rolling.

1. Brainstorm opportunities

  • What audiences do we serve? (market segments, customers, agents, partners, employees, …)
  • What are the prevailing patterns of day-to-day movement for each audience?
  • When do we care most about audience location? (think through major business processes, major events)
  • What location-oriented data do we have in our business today?

2. Connect the dots

  • What new value can we create for each audience when we know where they are?
  • And what value can we create for our business when we know where they are?

3. Identify scenarios

  • What specific scenarios would be best for testing?
  • What do we hope to achieve with each scenario?
  • How do we convince the target audience to share their location? What’s the value proposition?
  • How will we measure success?

4. Design and execute scenarios

  • What is the optimal context for executing each scenario? (audiences, places, times, …)
  • Specifically, how will each scenario work?
  • How will we measure success?

5. Measure and summarize results

  • What did we learn?
  • How do we articulate the business value based on test results?
  • What do we recommend based on initial results?

Let early results from this experimentation inform longer-term strategic plans and programs, and your organization will be among those leading the way with location-based services.

John Watson
Lat: 30.458434
Long: -97.854623

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