B6 Hyperlocal Marketing

Part of a series of Top 10 Closing the Sale Mobile Marketing Strategies
Hyperlocal Marketing (also known as Location Based Marketing) refers to mobile marketing strategies targeting consumers or businesses in very small geographic areas (e.g., neighbourhood, street, mall and store) based on their exact location. There are several approaches that can be used to reach local consumers such as banner ad placement alongside relevant content that is only likely to reach consumers within a tight geographic area.

For example, a Colorado real estate company places online ads only on homes in one single Denver zip code. For $340 per month they place ads on 10,000 home listings which generate over 150 inquiries per month. These results are powerful because they are reaching very targeted buyers. The ad company claims that people that see these mobile ads are three times more likely to place a call than those using a traditional computer.[i]

More and more, consumers are counting on their mobile devices to enhance their real‑world shopping experiences. Hyperlocal marketing can achieve this; however it can cause potential brand risks due to the sensitive nature of the customer data being collected. It is important to collect and use information in a manner that does not jeopardize consumer trust.

Another hyperlocal strategy involves the creation of local Facebook fan pages to encourage likes and check‑ins at specific locations. Rewards could then be tied directly to a local store.

Consumer Trust Branding Best Practices

  •       Give the consumer the ability to opt in and opt out of location-based tactics.
  •       Do not share the data collected with other companies.
  •       Transition from tracking Apple users by their UDID (a unique identifier tied to a user’s mobile device being phased out due to the sensitivity of the data it contains) to tracking via the Advertising Identifier.[ii]
  •       Remove any personally identifiable information from the data you collect.

Many have suggested that hyperlocal marketing will never take off since it requires users to give up some of their privacy. But there will always be a segment of the market that will give up certain aspects of their privacy, as long as they get some type of a benefit in return. To be successful, companies must address this question for consumers – “What’s in it for me?”

There are already several apps that are providing location-based services that have enticed users to join by providing a clear value to users:

  • Current and forecasted weather based on the user’s exact location
  • Nearby facilities such as buses, public washrooms, points of interest
  • Nearby goods for sale, both public and private
  • Friends that are nearby
  • User reviews of stores and restaurants nearby
  • Listings and times for nearby movie theatres
  • Pre‑ordering products and services from nearby companies to eliminate lineups, and
  • Finding a lost phone, bike, car, etc.

These examples have one thing in common; by giving up the privacy of their location, users can receive significant benefits.[iii] Combining location information with analytical data about a particular customer can make hyperlocal marketing even more powerful by tailoring relevant offerings to each customer. To create a sound hyperlocal marketing strategy, companies should determine customer requirements and ensure their needs are met.

Consider for example, the many different hyperlocal marketing approaches that hotel chains have implemented. Mandarin Oriental Hotel Group uses hyperlocal marketing to enable consumers to find its nearest hotel from their location, and then reserve a room with tempting offers.[iv] Starwood Hotels’ mobile app can actually provide personalized content to customers depending on whether they are just planning or have already checked in to the hotel.[v]

The Ritz‑Carlton app focuses more on customer support by providing location-based information on nearby attractions, restaurants and stores. Instant access to this information is provided by simply scanning a QR code at check‑in.[vi]

The Transition from Manual to Automated Hyperlocal Customer Interactions

The problem with many of the strategies described is that they require the company and/or customer to execute manual processes to initiate and complete relevant interactions. Imagine if instead we could automate the initiation of these transactions based on certain specific conditions being met. This could reduce transaction friction, leading to a larger number of more relevant customer interactions.

For example, one hyperlocal marketing approach involves the use of RFID to reach consumers as soon as they enter a particular area. For example, consumers could opt in to receive mobile discount coupons as soon as they are within one block of a particular store.

Fast food chain Subway has a geo‑targeted opt‑in SMS service that pushes offers to customers via text message when approaching a local store. Geofences are set up around Subway stores and the offer is triggered when the customer enters within range. Benefits to Subway include an increase in sales and customers learning about store locations they were not aware of before.[vii]

Donut chain Krispy Kreme implemented a unique automated hyperlocal marketing strategy. In their storefront windows, Krispy Kreme turns on the Hot Light as soon as a fresh batch of donuts is made. These signs have built‑in sensors that can send a fresh donut signal to Krispy Kreme’s servers which can then instantly alert nearby customers of the fresh donuts via its Hot Light App. The app selectively sends notifications to customers based on the GPS location of their smartphones. Customers can control the frequency and times for these alerts.

The app then provides directions to that particular location, and customers can also spread the word to their social media contacts on Facebook and Twitter. According to Krispy Kreme, ten percent of customers come into the store because the Hot Light is on.[viii] Over 100,000 people have downloaded the Hot Light mobile app and Krispy Kreme has experienced a 175 percent increase in mobile traffic. The business results are impressive. Krispy Kreme is sending out over 140,000 automated notifications per day[ix] which has contributed to a seven percent increase in same‑store sales.[x]

The examples above demonstrate how companies can transition from manual batch-and-blast marketing campaigns to efficient automated marketing campaigns utilizing machine-to-person communications. These dynamic real‑time campaigns do not require human intervention; instead they are based on business rules that take context and location into account.

After the initial customer opt‑in process is complete, thousands of automated interactions can occur automatically. The key is understanding your customers’ needs and determining what utility you can provide in the app to meet those needs.

Hyperlocal Marketing Best Practices

  •       There are two key tactics that can lead to a more effective hyperlocal marketing strategy: providing directions and offering a click-to-call option. Having these options can improve click-through rates by up to 100 percent, likely leading to more in‑store traffic and sales. T‑Mobile used this strategy to generate 20,000 phone calls to its stores in a single month.[xi]
  •       Retailers should consider limited time Flash Sales that target shoppers already in the store. By using technologies such as GPS, visibility of the discounted price can be restricted to those in the store.[xii]
  •       Transition from manual to automated hyperlocal marketing campaigns.
  •       Consider several companies enabling hyperlocal marketing strategies such as Foursquare, Where, Scvngr, Pontiflex, Yelp, Facebook Places and Twitter.

QR HYPERLOCALWatch the Video: Hyperlocal Marketing Introduction: Brief introduction to Hyperlocal Marketing (also known as Location-Based Marketing).[xiii] <goo.gl/kDdqc> (Duration: two minutes)

QR HYPERLOCAL BLOODWatch the Video: Public Sector Hyperlocal Marketing – Blood Donations: An example of using hyperlocal capabilities to attract blood donors to nearby blood clinics.[xv] <goo.gl/IH849> (Duration: two minutes)

Challenge Questions

Hyperlocal Marketing Strategies: Does a hyperlocal marketing strategy make sense for your organization, and if so, how could you implement it? How can you move from manual to automated hyperlocal marketing campaigns?

[i] Shira Ovide and Greg Bensinger. “Mobile Ads: Here’s What Works and What Doesn’t.” The Wall Street Journal. September 27, 2012. Accessed November 4, 2012. http://online.wsj.com/article/SB10000872396390444083304578016373342878556.html.

[ii] “5 Biggest Changes in iOS 6 for App Marketers.” Fiksu. Accessed November 4, 2012. http://www.fiksu.com/assets/ebooks/5-biggest-changes-ios-6-app-marketers.pdf.

[iii] Alexandre Mars. “Big Brother is alive and well – and he’s now your BFF.” Mobile Marketer. July 5, 2012. Accessed November 4, 2012. http://www.mobilemarketer.com/cms/opinion/columns/13236.html.

[iv] Rachel Lamb. “Mandarin Oriental details mobile marketing prowess.” Luxury Daily. July 1, 2011. Accessed November 4, 2012. http://www.luxurydaily.com/consistency-is-integral-to-maintaining-mobile-consumer-interaction-mandarin-oriental/.

[v] Rachel Lamb. “Using location based marketing to drive traffic to luxury hotels.” Luxury Daily. March 29, 2012. Accessed November 4, 2012. http://www.luxurydaily.com/using-location-based-marketing-to-drive-traffic-to-luxury-hotels/.

[vi] Rachel Lamb. “Ritz-Carlton steps up mobile game via iPhone, Android apps.” Luxury Daily. May 3, 2012. Accessed November 4, 2012. http://www.luxurydaily.com/ritz-carlton-steps-up-mobile-game-via-iphone-android-apps/.

[vii] Rimma Kats. “Subway franchisees ramp up mobile presence via geo-targeted SMS campaign.” Mobile Marketer. July 22, 2011. Accessed November 4, 2012. http://www.mobilemarketer.com/cms/news/messaging/10515.html.

[viii] Lauren Johnson. “Krispy Kreme taps mobile app to bolster foot traffic.” Mobile Commerce Daily. December 28, 2011. Accessed on November 4, 2012. http://www.mobilecommercedaily.com/krispy-kreme-uses-mobile-to-bolster-foot-traffic.

[ix] Roxana Strohmenger, Melissa Parrish. “The State Of Consumers And Mobile.” Forrester. November 8, 2012. Accessed December 24, 2012. http://www.forrester.com/staticassets/marketing/campaign-media/Q4_2012/Webinars/NA_Consumers_and_mobile_webinar.pdf.

[x] Albert McKeon. “Mobile engagement at Krispy Kreme: Clever sensors ping doughnut lovers.” TechTarget. Accessed November 4, 2012. http://searchcrm.techtarget.com/feature/Mobile-engagement-at-Krispy-Kreme-Clever-sensors-ping-doughnut-lovers.

[xi] Lauren Johnson. “Google tweaks ad formats to focus more on proximity, click-to-call.“ Mobile Marketer. June 26, 2012. Accessed November 4, 2012. http://www.mobilemarketer.com/cms/news/advertising/13178.html.

[xii] Chantal Tode. “Flash sales are retailers’ favorite mobile promotion: report.” Mobile Commerce Daily. December 4, 2012. Accessed December 24, 2012. http://www.mobilecommercedaily.com/flash-sales-are-retailers%E2%80%99-favorite-mobile-promotion-report.

[xiii] “What is Location Based Marketing – Georillas short presentation.” YouTube. Uploaded by Georillas on September 7, 2011. Accessed November 4, 2012. http://goo.gl/kDdqc or http://www.youtube.com/watch?v=FizN5m-Vh8A.

[xiv] “Mobilize by Going Local.” YouTube. Uploaded by GoogleMobileAds on April 4, 2011. Accessed November 4, 2012. http://goo.gl/3ixou or http://www.youtube.com/watch?v=sGEl6s_CAEs&feature=autoplay&list=PL5EDA764CB5382AE9&playnext=2.

[xv] “Location Based Services – LBS Marketing Solution not just for Retail.” YouTube. Uploaded by MobileFringe on November 1, 2011. Accessed November 4, 2012. http://goo.gl/IH849 or http://www.youtube.com/watch?v=Rp2SfOvKUGQ.


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