Real-time location marketing: a new loyalty technique?

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By: Wise Marketer Staff |

Posted on April 5, 2010

Real-time location marketing: a new loyalty technique?

There has been an increasing level of interest and debate in the topic of real-time location based marketing, and this is sure to increase as Google and Facebook enter the space, according to Kevan Christmas, digital and mobile consultant for The Collinson Group.

Despite this growing interest, there has been relatively little discussion among marketers about the opportunities that such a technology can offer brands that have customer loyalty and reward programmes.

For example, the UK mobile social network/game, Foursquare, has recently been in the news after signing up national UK brands Debenhams and Domino's Pizza. The application detects the player's location and, when they visit the store or restaurant, they gain points for 'checking in'.

Brands get involved by offering deals to users based on, for example, the number of times someone 'checks in' to their local branch. Businesses benefit from increased footfall and, ideally, a network of brand ambassadors who will pass on recommendations.

At the same time, the consumer benefits from offers and deals that are relevant not only to who they are but where they are. It is definitely no secret that smartphones and branded applications are a very cost effective way of targeting and engaging consumers and, by creating such tools that customers can download and use on a regular basis, marketers can begin to engage with them in ways that advertising has never been able to offer.

Collinson Latitude has experience working within the travel sector and some of the software being developed now illustrates the potential of the next generation of smartphone applications which can, for example, use the member's handset's GPS (with the customer's explicit permission, of course) to help make sure the right offers are delivered not only at the right time but in the right place.

For example, the company has developed a product that offers travellers a web-based suite of services to help them plan, prepare and manage their whole journey. Its capabilities include itinerary planning, destination content, check-in services, loyalty miles management, as well as airline timetables and flight status text messages. The product also has an iPhone application to allow travellers to continue planning and managing their trip on the move (even when offline, to avoid data roaming charges).

The key insight for travel marketers, according to Christmas, is that loyalty programmes must connect with all the different stages of the customer journey, from planning to booking, and from departure to arrival. Mobile technology can be viewed as a very direct way to "plug in" to that journey, wherever the customer happens to be.

What this means in practical terms is that the brand already has a good idea of where the customer is going to be, and when, as well as knowing how much loyalty or reward currency they have. This can be matched against the various outlets that the reward programme has affiliate relationships with. And the loyalty programme operator also already has a good amount of customer data including payment preferences and details. As a result, mobile devices could potentially be used - even offline - to facilitate some of the purchasing processes throughout the customer's trip.

Say, for example, the customer uses a mobile app to find the nearest hotel where they can spend their loyalty points, they could perhaps book a room and check in via their smartphone. A key principle of properly developed reward programmes is that they use as much customer insight as possible to make sure that the services and products offered are exactly what the individual wants and needs. This data should be used not just to meet customer expectations, but to exceed them at every opportunity.

It's also worth noting that there is a lot of trust inherent in the relationship that the loyalty programme operator has with its members. And, because the customer's payment details are not held on the mobile device itself, no sensitive financial data needs to be transmitted at any stage. This resolves a major consumer fear and barrier to location-based marketing with a lot of Wi-Fi related communications.

Another capability that mobile apps offer is to "push" messages to the customer's mobile phone at just the right time. Relevance is absolutely crucial, however, because this is a potentially disruptive (or at least invasive) technique that can not only increase engagement (with the right insights) but could also irritate the customer. There is, however, a clear benefit to being able to contact a customer to let them know that "now you've touched down, there is a restaurant nearby where your reward points are worth double".

This 'intelligent monitoring' is a key part of the strategy. Previously marketers have been able to narrow down the offers made to customers only according to their prearranged travel plans, but new mobile apps such as the one developed by Collinson Latitude mean that marketers will be able to target customers based on where they are - so there is a known customer waiting at the Duty Free shopping mall at the airport, the loyalty programme can offer them useful and relevant ways to redeem their points as they walk past partnered retailers' storefronts. Taking the example a little further, based on the customer's stated itinerary, specific products that are relevant to where they are going could be offered.

Using GPS can also create new data, with new patterns emerging about how loyalty programme members behave when they are on the move. Properly handled, and with the very necessary customer permissions in place, this represents an entirely new way of observing customer behaviour, and could potentially lead to marketers being able to pre-empt many customer needs based on their physical location.

However, just as your communications with the customer must be relevant to what the customer actually wants, your offerings must also match your brand values and the specific objectives of the loyalty programme. That could mean seeking to reward and encourage high spenders, encourage low spenders to spend more, to motivate customers to use more of your wider services and products, and so on.

There is also a real opportunity for reward programmes to use peer-based social media capabilities. Instead of the mobile app simply saying "here are the closest five car hire outlets where you can earn or spend loyalty points", it could say, "here are the top three in your vicinity, according to ratings provided by your fellow gold card members". Providing scores, notes, suggestions and recommendations from a group of people who have similar tastes, aspirations and levels of affluence can engender a great deal of trust - and that's an opportunity for greater customer loyalty.

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