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Using Location in Loyalty Cards

Loyalty cards haven’t fundamentally changed the way they do business for many years. There are the fans and the people who actively look for deals, but most of the people we have spoken to recently have said that the time they realise there is an opportunity is when they are at the checkout and the cashier asks if they have their Fly Buys or whatever card. This obviously is not generating increased sales or revenue.

There are huge opportunities for loyalty cards to exploit location with the large number of people now using Smartphones fitted with GPS. Effectively a Smartphone application can therefore identify when a card holder is near a store or participating retailer and can potentially be offered a deal using push technology. We are hugely spoiled for choice these days as retailers flock near each other to try to win your business. For example, if you go to AA Maps and do a search for ‘Hardware Albany’ you will come up with 48 results! That’s a huge range of options in one area within around a 5km radius.

Albany Homes Owner Occupied 70% or Over

A large number of these retailers spend a lot of money on advertising in newspapers, magazines, letter box drops, eDm’s and much more. Many of them are involved in loyalty card programs which provide additional opportunities for targeted marketing. These are all very expensive media and the approach uses often sophisticated targetting using demographics tools, such as GeoSmart’s BIonaMap discussed in a number of our blogs such as this one using demographics for a lawn mowing franchise. By understanding what your target market is, you can identify the best place to locate your store and which areas are best for letter box marketing. Of course success requires that your target market is open to buy and looking for your product.

If a consumer is looking for a lawn mower and your mailer arrives in their letter box, there is the potential that they will visit your store, but how often do they buy lawn mowers and how often do they read your mail drop? The example illustrated here shows homes where the owner occupancy is 70% or greater, a perfect target for DIY sales using BIonaMAP from GeoSmart.

In coming blogs I will post examples of how a loyalty card smartphone application using GPS location could integrate with retail Point of Sale systems, inventory management and really understand what a customer is looking for, sending meaningful offers to consumers when they are looking for product and are in proximity. If you make things easy for customers and have a meaningful relationship with you, they will buy your products over your competitors products, but to effectively do that, you (your technology systems) really do need to understand who your customers are and what their needs and interests are. They want to give you their money and it isn’t necessarily about special pricing.

Where should you start? Probably by asking what your loyalty card company is doing about proximity based marketing and check ins (which we have discussed frequently on this blog). GeoSmart is keen to support local loyalty card companies and application developers and we are convinced that there are huge opportunities to really bring in serious retail profits and the opportunity to develop genuine loyalty relationships. Who wants an unfair advantage? If that’s you, why not contact us?

Feel free to ask questions here or to leave a comment. Bookmark this page for upcoming blogs on how a loyalty card company can use this technology to help their partners win more business.

September 19, 2011 Posted by | Business Analytics, Check Ins, geosmart, gps, new zealand, proximity based marketing, Retail, territory management, Uncategorized | , , , , , , , , , , , , , , , , , , , | Leave a comment

Consumers are Checking In to Retail Stores

In my previous blog I pointed out that that retailers were not adopting strategies for check in location based marketing. In the blog prior to that I quoted Comstat research that shows that in the first 3 months of this year 16.7 million people check into locations using Foursquare and similar applications, representing 7.1% of the total mobile population. I don’t know what the statistics are for New Zealand, but I suspect the numbers are somewhere between 5 and 7% of the NZ mobile user population.

Comstat also came up with some interesting statistics about the demographics of those users.

Firstly a lot of people think this is technology for men, that they are the geeks, but of course women love to shop, they are social shoppers and as the graph shows, there are in fact more women than men checking in!

The predominant age group should be no surprise, we would expect 18-44 year olds to be the most tech savvy and of course having disposable income for Smartphones which are the predominant mobile used for check ins. Again from Comstat for the first 3 months of this year in the USA Android pipped Apple at 36.6% to 33.7$ of devices used for checking in.

The largest group of users were in full time employment 46.6% and the second largest at 23.3% were full time students.

Just as a footnote to my blog on Group Deals and Bricks and Mortar Business there was an interesting story in eMarketer a couple of days ago. The story contained statistics that from research by Cooper Murphy Copywriters in July this year, 82% of Groupon users expressed dissatisfaction with the level of repeat business they generated from their campaigns and 49% would not use them again. This is interesting when many companies use daily deal type promotions to introduce new customers to their stores.

Of course you know where I am going with this series and that is that Location or Proximity Based Marketing offers far more compelling tools for retailers and other destination businesses to entice people into their premises. Obviously a fundamental component of that is not just how to get them to come to you, but how to get them there when you want them and to have them purchase or consume products or services that achieve your goals. For a retailer that might be those same products you were quitting on a daily deal, but like the Auckland superette owner who has been selling milk at 10 cents below cost as a loss leader, part of the strategy behind that is the opportunity to merchandise other products those same people will buy with a healthy profit margin. If you have an aged stock problem, location based marketing can get people into your store and while they enjoy the low price of your distressed inventory, put something at eye level in from of them that increases the profit of your sale. Cherry pickers do not make you profit.

Likewise if you have a cafe or restaurant, don’t just offer a free coffee with $5 worth of food. Offer it only at times when your business is empty and not to the people who were coming in anyway, they are dealt with using your normal loyalty program. Of course loyalty marketing is also very important and fits into location, but you’re going to have to come back to a future blog for that.

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August 11, 2011 Posted by | Android, Auckland, Business Intelligence, Check Ins, competition, Distribution, foursquare, iphone, lbs, location based services, map tools, Mapping Applications, Marketing, Mobile maps, new zealand, proximity based marketing, Retail, Retail Profit, ROI, Sales, software, Uncategorized | , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Check Ins

We were at the Auckland ICT meeting a couple of night’s ago and it was interesting to corroborate our experience in the field with associates that there is both a chasm between people in the ICT industry and even their own friends and family in retail and other bricks and mortar industry when it comes to use of social media and proximity based marketing.

A couple of us presented at the Mobile Marketing Forum last month and felt that we were preaching to the converted and disappointed that only 4 bricks and mortar companies attended the conference when they were potentially the ones with the most to gain from being there. Generally what we found was that businesses either didn’t have a clue what checking in means, or if they did, don’t make the time to understand and utilise what could be a much better tool for them than dumping stock on daily deal type sites.

So here is a tiny bit of Check In 101:

Fundamentally the concept of checking in is to use a mobile application on a smart phone that is location aware, such as Foursquare, to register that the user is at a particular location such as a landmark or a business / shop. The location is verified using GPS or GPS assisted technology in the mobile. There are gaming elements such as badges or points and often tangible rewards such as discounts. People that visit a particular location enough times gain the title of Mayor of that location.

What is interesting and most retail business operators aren’t aware of is that this takes place, whether or not they are personally involved, which means people are entering their businesses and creating marketing opportunities, but are not being engaged in this medium. Most applications allow people to leave comments or tips, make ‘friends’ who are also allowed to see their location and make recommendations which could be positive, but could also be very negative. This means that even if the proprietor can’t make time to use these tools to engage and attract business, they may be losing business without knowing it as well. A simple comment such as “The toilets are clean here:(” or “The line was so long, I went next door” could cost not only immediate business, but steer people away long into the future.

The applications typically have interfaces to social media applications such as Twitter and Facebook, so the comments, recommendations and otherwise are creating a digital footprint that can be difficult if not impossible to remove.

Recent statistics from Comscore this year suggest that around 16.7 million individual people in the USA checked in to locations using Foursquare and similar applications over the first 3 months. This represents around 7% of the total mobile population. Recent statistics in June 2011 suggest that the UK and Western Europe currently sits at around 5%. That is a lot of people. People just like them may be in the area and walking right past your business.

July 22, 2011 Posted by | Auckland, Business Tools, Check Ins, Distribution, geosmart, gps, lbs, location based services, Mapping Applications, Marketing, Mobile maps, new zealand, new zealand maps, proximity based marketing, ROI, social networking, software, Uncategorized | , , , , , , , , , , , , , , , , , , | Leave a comment