For businesses with a strong physical presence, such as stores and shopping malls, restaurants, or museums, proximity marketing is often a novel and exciting, yet underused opportunity to reach their customers. Many already have the right technology at hand, they just haven’t thought to use it that way. In this article we explain the concept, what technologies are needed, and how you can use it to grow your business.
What is proximity marketing?
Proximity marketing is a marketing technique whereby recipients are targeted with marketing messages based on their vicinity. Simply put, it’s when you send ads to people who are close by your venue. This can be done using different technologies (such as WiFi, BLE, NFC, or GPS) and for varying purposes (advertising, feedback, customer support etc.).
An example would be when you enter a store and get a push notification on your phone with a discount for your shopping, or when you scan a QR code at an event to download promotional materials.
How does it work?
When it comes to proximity marketing, there are multiple technologies at play. Which is the best for you largely depends on what you want to achieve, what infrastructure you have, and who you’re targeting. Below we list some of the most popular technologies, describing how they work and what their benefits are.
WiFi
One of the easiest, yet most versatile ways to implement proximity marketing in your venue is to use WiFi. This is because practically everyone and their grandma has a WiFi-equipped smartphone these days and logs into public hotspots, meaning that you only need the right software to collect customer data and advertise to them using your guest WiFi. This platform should have indoor positioning features, so that you can easily locate your customers, and WiFi marketing features, so that you can effectively communicate with them when they are nearby.
The way it works is that when a customer logs into your guest WiFi network, you collect data about their device (specifically the MAC number of the device), based on which you can “follow” the customer around the venue and later identify them when they return. Using that, you can for example advertise to returning customers on your WiFi login page or splash page with extra loyalty coupons, or you can send push notifications to remind the customers to visit your store when they are nearby.
Find the right solution for your venue:
QR codes
This is a somewhat antiquated method compared to the other ones we’re discussing in this article, but it has its benefits. It’s extremely easy, cheap, and fast to implement. This obviously affects its efficacy, but for some uses, it will be just enough.
QR codes are scannable barcodes (or should we say “square codes”) that redirect the user to a particular website. Most smartphones these days are capable of scanning these, which means you only need a QR code generator (easily available on the internet) and a printer to set things up. Then, people who see the code at your venue can scan it if they’re interested and be redirected to the right page.
This solution has been making waves at various conferences and events. Since it’s so unobtrusive and inexpensive, exhibitors use it to offer background on their brand that can’t otherwise be presented in the booth. But you might as well use it in a store to create a flash sale with coupons only available in one location on one day. For such a simple solution, the possibilities are almost endless.
NFC
NFC stands for “near field communication” and it’s the technology that allows you for example to pay at the store with your phone or your smartwatch. This means that a lot of your visitors will already have access to it. However, it’s not as widespread as WiFi or QR code scanners for sure. Another thing to consider is that it requires extreme proximity (we’re talking millimeter to centimeter range), so it’s less versatile than the other technologies discussed.
However, there are business cases where NFC is still a valid technology to use for marketing and where the need for extreme closeness is actually a benefit, rather than an obstacle. In these instances, it can be used similarly to QR codes, i.e.the user needs to touch their device to the NFC tag, which will redirect them for example to a landing page.
BLE beacons
Bluetooth Low Energy (BLE) functions similarly to WiFi access points, although it’s a less popular technology. This is because, even though most people can turn on Bluetooth on their devices, they don’t necessarily do that. And even if they do, that’s only half your road to successful marketing with BLE. You can now locate your visitor, but in order to communicate with them, you need a medium – such as an app that they have downloaded. And, obviously, you need to install BLE beacons at your venue in the first place. This may turn out to be an unnecessary expense if you only intend to use BLE for that one purpose.
This is not to say BLE is not an amazing and useful technology. However, its applications are perhaps more clearly visible in other scenarios than discussed here, of which you can read in our article “Everyone is using Bluetooth Low Energy – should you?”
GPS
Similarly to BLE, geofencing with GPS requires the user to turn on the location services on their phone, as well as have a medium of communication with you – such as a smartphone app. Another disadvantage to GPS is that it’s an outdoor positioning system. It cannot be used on the inside because the walls compromise the signal and, on top of that, even in the best of circumstances, GPS is less accurate than any of the technologies we discussed above.
Obviously, there are plenty of use cases where GPS performs wonderfully and where proximity marketing is still applicable (think Google Maps and promoted pins), so it’s entirely up to you to decide if this method works for your business case.
How to best use proximity marketing?
Well, there are plenty of use cases for each of the technologies discussed, some of which we’ve already mentioned. Here’s a quick recap of the most common applications to give you an idea of how you can use them for your business:
- sales – duh! You can use it to boost your sales, for example by incentivizing customers with dedicated coupons;
- retargeting – if you notice that someone visited your store several times (possible with WiFi location services!) but never made a purchase, it’s time to act! Pop in their mailbox, offer a discount, and who knows, maybe that will do the trick;
- loyalty – research shows that customers like to be rewarded for their loyalty (according to this research by a brand loyalty management firm, Bond, 32% of consumers strongly agree that a loyalty program makes their brand experience better). Find who your most loyal customers are and target them directly with dedicated campaigns;
- behavior analysis – any of the strategies we discussed allows you to also collect (more or less precise) data on your customers and we encourage you to do that! This gives you actionable insights on how your customers behave (e.g. how often they visit, how they move around the venue, etc.) so that you can optimize your operations;
- indoor navigation – delight the customers with your helpful approach and guide them to the right place, e.g. when the customer is looking for the right store in a shopping mall, or for the right aisle in a supermarket;
- gamification – we increasingly see different businesses use proximity technologies for gamification purposes, such as museums rewarding their visitors for checking in at different branches, which both encourages people to visit more often and gives them a sense of accomplishment.
An important thing to remember is that it’s not used only for advertising per se, but for a variety of customer-related activities, such as customer feedback or customer support – all of which can improve their quality of experience and strengthen your brand perception!
What to do with all this information?
We hope that we’ve given you enough information to convince you that proximity marketing is a great way to approach your customers in an innovative and targeted way. Equipped with this knowledge you can now choose the technology that best works for you and use it in a variety of ways, depending on your business case. And if you need help setting it up, contact us to learn how we can help you grow your business with our WiFi marketing and indoor positioning platform, Linkyfi.