Geo-targeting or location-based marketing has fast become one of the most powerful tools at the disposal of retailers. This exciting new technology allows businesses to engage with consumers as soon as they – or to be more precise, their smartphone - enters a geo-fenced area close to a store or restaurant.
In the short time it has been available geo-targeting has proved immensely successful, with 58% of major brands employing some version of geo-location strategies during the first quarter of 2013.
Joe Public loves geo-targeting because it sends them relevant in-store offers only when they can actually use them. Businesses are finding increasingly sophisticated ways to use the technology. Some have begun using micro location-based techniques, whereby customers download an app to receive personalized offers as soon as they set foot in the store.
The benefits are patently obvious, and yet not all businesses suitable for geo-targeting have taken advantage. The technology is complex, and beyond the capacity of many small businesses. But there are a variety of ways to use geo-targeting, some of which are easier to implement than others.
One of the most attractive methods to marketers who don’t want to deal with privacy and legal issues is IP targeting, which identifies users based solely on IP address. There is no opt-in required, since the individual is not personally targeted, just the ISP infrastructure of which they are a part. Similarly, cookies provide a broad brush stroke version of geo-location, though they are notoriously inaccurate, being logged in one location before the user moves somewhere else. WiFi triangulation works in the same way, locating users MAC addresses and nearby wireless hotspots.
All of these geo-targeting methodologies have their perks, chief among them the fact that businesses don’t need to seek consent from their audience. To really get the most out of geo-targeting, however, you need to choose a more effective, precise and, yes, consent-based strategy. Location-as-a-service (LaaS) is a cloud based solution, triangulating users locations using mobile phone towers. Laas requires recipients to opt in, as do location-based proximity networks, which provide one of the most accurate forms of geo-targeting there is, capable of locating users within 200-900 feet of the point of sale. Location-based proximity networks are usually favored by malls and large department stores.
For the average retailer, GPS-powered geo-targeting is by far the best option, providing precision data to within a few feet of the mobile device. In most cases, persuading customers to opt-in to receive location-based offers and discounts via GPS is going to generate the biggest ROI. The only tricky part is convincing customers of the usefulness of the technology, whilst reassuring them that their data will not be used for any other purpose.