Proximity Marketing

Mike Fauscette

Chief Research Officer

G2 Crowd


Proximity marketing or hyperlocal marketing as it's sometimes called, is on the upsurge this year. The fact that the smartphone market continues to grow with ~1.3B shipments in 2014 WW, and a CAGR of near 10% through 2018 (based on the IDC Smartphone Tracker) is a part of that of course, but also the technology supporting proximity marketing is much more refined and available. There are also some good successes that are getting the attention of all types of businesses. 
Proximity marketing uses technology to find and interact with mobile device users in close proximity to the business or in some way opted in to the interaction. It is permission based and generally uses one of these technologies to interact with the mobile device:

  • Cellular
  • Wifi
  • Bluetooth
  • NFC
  • GPS / SMS
  • QR code

The interaction can be in the form of an offer, a free download app, or some other relevant content download.  To identify the "target" the business usually uses some form of geo-fencing, either GPS/Cellular/wifi or Bluetooth, which is generally the more granular and referred to as microfencing. There is some established signal threshold that is used to establish proximity. Most proximity marketing is push based but NFC or simple QR codes can be used for pull programs as well, where a target interacts with a kiosk or other NFC enabled device, or a posted QR code, to download an app or content. Using the QR code is the simplest type of program to run, and can be very cost effective while still producing solid results, particularly for providing an interactive retail experience (shelf tag QR codes) or in situations where an app download can be used, for example restaurants.

Using a mobile app as a part of the overall customer experience (CX) strategy has gotten a lot of attention over the past year or so. It can be an excellent way to provide customer service, deliver content, tie the customer into the company's community, capture data and improve the loyalty program experience. Proximity marketing techniques can play an important part in driving app downloads and increasing app use and should be considered as a part of that program.

There are some pretty good examples of how companies are using proximity marketing, here are a few ideas and examples:

  • Retail: loyalty program - app download - store maps (particularly useful in large, complex stores like building supply) - shelf tags (QR codes) for education and content - real time promotions - Mall management companies are providing proximity services for Mall tenants in addition to in store operations/programs - interacting with digital signage - capture additional customer data
  • Public transportation, rail station/lines and airports: interactive transit map downloads - app downloads - facility maps - selling access to transport beacons for other business campaigns - loyalty programs - real time promotions
  • Trade shows: interactive show floor maps - app downloads - show schedules - promotions and offers from exhibitors
  • Hotels: app downlaods - hotel maps - loyalty - check in/out and reservations
  • Restaurants: app downloads - loyalty - real time promotions - ordering / take away / delivery services - food information (one recent example for people with food allergies, the restaurant provided a business card with a QR code that drove the diner to an interactive site that listed ways to order different food based on allergies)
  • Consumer products: loyalty programs - app downloads - promotions (particularly in cooperation with retail stores) - campaigns (there's a particularly interesting case study about a UK brand of body spray that used an on campus dating app to successfully promote it's product. Another recent campaign by Redbull used digital signage at the point of sale to bluetooth coupons to consumers.)

What's in it for the consumer? It's important to not lose this very comon thread, there must be value in your campaign for consumers to want to opt-in and be involved. That's really the biggest question for a campaign or app, what is the value it delivers to your customer? That might be discounts and promotions, better customer service, engaging and entertaining gaming experiences, etc., but overall there must be obvious value. Here are a few other tips:

  • Keep the solution as simple and focused as possible
  • Leverage technology when it makes sense but don't forget that low tech like QR codes might be the most effective for the problem you're trying to solve
  • Always respect opt-in (and just a word to Verizon Wireless, just stop using the track anywhere tags / supercookies on your subscribers; and 3rd party solution providers, do not use them to track people that have opted out of cookies, it's an invsion of provacy)
  • Individualize as much as possible, people want programs that are relevant to them personally. Location isn't necessarily enough to individualize, that's why loyalty programs and apps can help fill in the profile and support a higher level of tailoring.
  • Language matters, in many places you will need multi-lingual support for your campaigns to be effective
  • Keep the content fresh and relevant
  • Use apps if possible, it improves the experience considerably and provides a much richer opportunity to tailor to the individual
  • The campaigns are generally real time, that gives the opportunity to analyze data in real time and correct / change the program as necessary

Presented By: IDC

Jul 16, 2015