How Can Location-Based Marketing Build Your Business?

In an era where personalization is critical to capturing consumer attention, location-based marketing has emerged as a powerful tool for businesses. By leveraging geolocation data, companies can deliver targeted and relevant content to potential customers via SMS marketing, driving engagement and boosting sales. In this blog post, we’ll explore how location-based marketing can transform your business strategy, enhance customer experiences, and ultimately increase your bottom line.

Table of Contents

• How does location marketing work?
• Types of location-based marketing
• 4 ways location-based marketing builds your business
• How to measure location marketing success
• What about privacy?
  

How Does Location Marketing Work?

Location marketing uses location data to send specific messages to consumers based on where they are. This approach allows businesses to engage with potential customers in real time, offering personalized promotions, notifications, and content highly relevant to their immediate surroundings. 

Types of Location-Based Marketing 

SMS Geofencing 

SMS geofencing is a marketing technique that targets customers in a specific area. When someone enters a designated zone with their mobile device, they receive a personalized SMS message.

This message can include promotional offers, event notifications, or personalized greetings to drive engagement and encourage immediate action. Businesses can use GPS and cellular data to send targeted messages to potential customers. This can help improve the effectiveness of their marketing campaigns. By reaching the right audience at the right time, businesses can increase foot traffic to their stores.

For example, one of the biggest fast-food chains in the U.S. utilizes geofencing technology to leverage sales. Taco Bell has a mobile app that allows customers to order food from their mobile devices.

Whenever a user drives by or is close to a Taco Bell location, the app sends the user a push notification. The notification is a simple reminder that proved to be a big success. After the launch of this campaign, the company saw a 6% sales increase.

Geotargeting 

Geotargeting entails showing content to users based on where they are, using GPS, IP address, Wi-Fi, or cellular data. Geotargeting allows for a more granular approach than geofencing, targeting users based on specific locations such as cities, neighborhoods, or even individual buildings.

Geotargeting allows businesses to send personalized SMS messages to users in a specific area. This helps tailor promotions, updates, and information to their current location. This targeted approach enhances relevance, increases engagement, and drives local customer interactions, making marketing efforts more efficient and impactful.

Beacon Technology 

Beacon technology uses small Bluetooth devices, known as beacons, to transmit signals to nearby mobile devices. When a customer's phone is close to a beacon and has Bluetooth on, they will receive special messages, deals, or alerts.

This technology allows businesses to communicate with customers immediately. It gives customers useful information based on where they are, like in a store, mall, or elsewhere. Beacon technology enhances the customer experience by giving useful information, encouraging more interaction in-store, and increasing sales with quick responses.

4 Ways Location-Based Marketing Helps Build Your Business

So, how can location marketing campaigns help attract more customers and increase conversions? Here are four reasons to consider including location-based marketing in your digital marketing strategy.

Reaches the Right Customers

The days of "spray and pray" are long gone. So why waste time and effort creating communications that don't appeal to your target audience? Once you've identified your ideal customer base, creating specific, personalized messages draws customers toward your brand and offerings.

Builds Foot Traffic

Businesses that rely on in-person sales have an incentive to attract more people to visit their physical store. Appealing to customers already in your geographic area increases the chances that they'll visit you over patronizing a competitor.

Enables Hyperlocal Campaigns

Geofencing works best when creating a small, specific geofence rather than a large one. An effective geofence can be as wide as 150 meters from your business. However, if marketing to customers inside your business, that range can be as small as five meters. 

Improves User Experience 

Nobody likes messages that don't speak to their interests. They waste time and can turn customers off to your brand. However, sending messages that appeal to customer interest and anticipate their needs strengthens loyalty and enhances customer experience.

Identifying Your Target Market

We've established that sending targeted messages to your ideal customers is essential to creating successful campaigns. So, how do you identify your intended customer base?

Demographics

Since demographics can significantly affect consumer preferences, you must understand what factors to consider when identifying your target consumer. Here are some metrics that help create an accurate customer profile:

• Gender: Do your products and services appeal to a specific gender, or are they universal?
• Age: Are your ideal customers young, old, in between age groups or multi-generational? 
• Lifestyle: What are your customers' hobbies and interests?
• Income: Are your products economical, in a luxury category, or in between?

Behavior 

Understanding customer likes and buying patterns helps create campaigns that capture attention and predict future purchases.

• What pages on your website have customers visited? 
• What products have they found interesting, or have they already purchased?
• How often do they buy from you?

How to Measure Location Marketing Success

How do you know if your efforts are successful? The most effective way to improve is to use important measurements to identify areas for change or removal. This involves analyzing data to determine which aspects need adjustment or elimination. By focusing on meaningful metrics, you can make informed decisions on how to enhance your performance.

Determine ROI

Are your location-based campaigns generating the number of sales you were anticipating? If your return on investment doesn't meet expectations, consider making changes to improve your campaign's reach or effectiveness.

Perform A/B Testing

There is no "one size fits all" marketing campaign. However, when using location marketing, creating ads or messages that are attractive to many improves your chances of conversion. 

Test different types of content and play around with your campaigns. If you have a small coffee shop, giving away a free cup of coffee can attract more customers. This may be more effective than offering a free croissant.

Also, remember to test your geofencing location, especially if there's a direct competitor nearby. You want to set an area that will be competitive but is separate from a competitor's territory.

What About Privacy?

Honoring customer privacy concerns is vital to any marketing campaign. The difference between creating relevant offers for your customer base and digitally "stalking" them can be quite slim. In addition, concerns about cybercrime and theft of personally identifiable information (PII) make customers wary of marketing communications that violate their privacy.

To address these concerns, make sure you:

• Get customers' permission to send them SMS texts
• Give customers the ability to opt out of marketing communications at any time 
• Make sure your location-based marketing plans follow FTC rules. This will help prevent legal problems and maintain consumer trust. Learn more about FTC regulations here. 

Choose Textedly For Location-Based Marketing Campaigns

Location-based marketing is easy to use and can be customized to fit your business needs with minimal effort. It provides valuable data on each sale, enabling you to refine your future marketing strategies. To maximize its potential, consider incorporating a robust SMS geofencing strategy to ensure you capture every opportunity.

Need a hand with location-based marketing? Textedly provides easy-to-integrate solutions for your business. Get started with Textedly's free trial to kick-start your next location marketing campaign.