The smartphone is a potent marketing tool. Not only does it allow people to send and receive multichannel communications, but – thanks to its GPS function – it allows the location of the phone’s owners to be known. For marketers, this is something of a Holy Grail: It means customers can be sent marketing messages tailored to their physical location. If they come near a retail store, they can be tempted in with a coupon. If they pass by a pharmacy, they can be reminded about a prescription refill. The problem is, it’s the kind of marketing tool that can be easily abused to the point of criminality.
Marketers are calling it “SoLoMo,” or social local mobile marketing. Used properly, it can be a powerful tool. A recent study of U.K. consumers conducted by customer insight company GI Insight found that 70 percent of customers report they would be happy to receive location-based commercial messages via their smartphones, but only if they have given permission for marketers to do so. Furthermore, 58 percent of respondents said they would be open to receiving these types of messages only if they have a strong existing relationship with the brand sending them. Eight in ten reported they would not be happy to receive such messages from “any old company.”
The message is that this type of marketing can be effective and rewarding if it’s conducted with prudence and only directed at a company’s best customers. Beyond that, it would clearly be a creepy intrusion for most consumers. And while the results of this study might seem like a green light to social networking companies looking to engage in more location-based activities, this is clearly not the case: only 22 percent of respondents said that receiving promotions via social networking sites would increase their likelihood of actually taking up an offer.
Essentially, customers are not particularly eager for companies to demonstrate that “they know where you are,” unless there is something really compelling in it for them, and it comes from a brand they trust. It also underscores the importance of permission with this type of marketing.
“These findings throw up some real red flags for brands, and some of them are surprising,” said Andy Wood, GI Insight’s managing director. “For instance, not everyone is happy to be marketed to via mobile, and less than a quarter of the consumers we surveyed say that they would act on localized messages sent to their smartphones via a social networking site.”
So before you begin that location-based marketing campaign, ensure you have permission to track and communicate with that consumer (many government regulations require this step anyway). Ensure they are your best customers, make sure the message is crafted properly, and, above all, ensure you have something really compelling to offer. Because once the rule-breakers and fraudsters begin using these location-based channels, the public backlash will be so hard, mobile marketers won’t know what hit them.
Edited by Blaise McNamee