Location-Based Services Increase Foot Traffic and Revenue, Says Report

By | Mar 23, 2012

Location-based cloud services are expected to grow into a $12.7 billion dollar industry by 2014 and it appears that IT managers at small and midsize busineses ought to start paying attention to the opportunities available within this sector, reports TechCrunch. According to the Juniper Research report, location-based services such as Gowalla and FourSquare are successful in pushing traffic to brick-and-mortar retail stores. These smartphone applications allow users to engage with brands, and they expect a certain loyalty for their business. Businesses that use these services are rewarded on search engines with higher rankings when users engage with their brand.

According to Marketing Zen Group, there are a few simple steps to register a location. First, claim the venue. Once registered, the site will be confirmed by the service. Customer insights can then be accessed, which is important for customer acquisition and customer retention. The next step is to create a page through Twitter. The last step is to create a Partner Badge.

Social media sites like Facebook and Twitter share space in the virtual world but do not have the same impact on their fans. Location-based services allow users to participate in the virtual world while taking care of business in the real world.

Location-based services are excellent sources for testing marketing messages and for rewarding customers. When a customer visits a participating brick-and-mortar store, a message is pushed to his cell phone that asks if he would like to check in. The customer has the option to approve or ignore the request. Participating businesses can also push offers to mobile users within a certain distance of the store. The offer can include the store address and a map. Foursquare users can see when their friends check in, can post a comment, include a to-do item, and share a location.

According to The New York Times, one small town business is gaining revenue from this service. Strange Brew Coffee House is owned by Shane Reed and he is excited that year-over-year sales have increased 34% with Gowalla. When a customer checks in, a 10% beverage discount is pushed to his phone. The customer shows the coupon at the register and the drink is discounted. Reed likes the application because it saves him marketing dollars and has increased brand exposure, and he is only out the cost of the discount.

Reed also uses Facebook and Twitter profiles, but his fans do not refer to the page for discounts or engage with his brand on those sites. Gowalla statistics show multiple check-in's each day and up to 40 per day when the local university football team has a game.

The main segment of FourSquare users is men between the ages of 18 and 34. Women do not participate as much, likely due to concern for personal security. With built-in apps on new smartphones, retailers will be able to push mobile offers to everyone, and users will not be required to share their location.

Marketing campaigns can be cross-promoted across social media sites and location-based applications. If there is a typical slow time in a store, the retailer can push offers to mobile users in the area to increase business. Retailers increase their brand exposure by using the business name when checking in somewhere else.

Before registering for one of these services, check out what competitors are doing. What discounts do they offer? How do they integrate checking in with their social media sites? Do they engage with customers who leave comments? How valuable is the customer insight data to your business? If you walk into a competitor's store, what message is pushed to your phone? These questions will help a business plan integrated marketing and engage with their customers in the virtual world.

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