Location-Aware - Without the Scare!

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As technology becomes more deeply embedded in all facets of life, marketers need to find the right course of action to deliver location-based messaging.
Marketing

Sometimes it feels like we're headed toward a technology-powered utopia where devices and apps continue to make life easier while keeping us healthier and safer. Today, you can ask your phone a question and consult all of humanity's collective knowledge for an answer. You can adjust your home thermostat remotely to conserve energy or start your car from inside your warm house to heat it up on a cold morning. You can use a wearable device to count your steps, track your sleep patterns, and keep tabs on the number of calories you burn. GPS can help you get back on track if you take a wrong turn in an unfamiliar city.

Or maybe we're headed toward an Orwellian dystopia where we're being spied on 24/7. If your phone, car, and thermostat can hear you, it's possible that unseen ears are listening in too. If your fitness band is monitoring your vital signs and exercise regimen, maybe others are snooping on that highly personal info. And if satellites are tracking your movements to help you find your way back on course, maybe people with more sinister motives are also keeping tabs.

Setting Boundaries in Customer Relationships

The same technology that gives rise to these vastly differing visions of the future is taking an ever larger role in marketing and customer communication today. Customers are already thoroughly accustomed to seeing offers based on past purchases online, and they increasingly expect highly personalized messaging on their mobile devices. A Texas-based customer won't have much use for a chain's discount offer for a Dallas outlet if she receives it when she's in Toronto. But should the global chain send an offer that can be redeemed at a Toronto location?

Wouldn't the customer find that vaguely creepy, knowing that the company is tracking her movements so closely? As technology becomes more deeply embedded in all facets of life, marketers need to answer that question and figure out how to deliver location-aware messaging without seeming to aggressively stalk customers. And as usual in business, the right course of action comes down to the quality of the relationship the company develops with the customer. Like any other relationship, it needs respectful boundaries.

Using 3 Types of Customer Data

Personalizing marketing messages is all about parsing data, including location data. And to figure out boundaries, it's helpful to know that there are basically three kinds of data a company can use to create messages: information that is observed, inferred, or freely given. The way companies use these data sources can spell the difference between delivering a relevant offer that customers are happy to receive, or coming off as creepy and intrusive.

Take the first type of data: observed. A grocery store might use point of sale data that indicates a customer purchased cat food on their last visit to generate an in-store mobile offer for the same or a similar product during the current visit. Most customers wouldn't find that worrisome. But many customers would find it deeply unsettling if a store inferred from the prior purchase of an at-home pregnancy test that the customer would be interested in baby food coupons. That use of inferred information would definitely cross the line into creepy.

The gold standard in data is information that the customer provides freely, and the most effective location-aware marketing strategy involves customers who have granted permission to be contacted. Loyalty programs are a great way to gain access to customer data and get their permission for future contact, including for location-aware campaigns, but it's crucial for marketers to design their programs carefully. Value should be the centerpiece of the program.

Making Sure You Deliver Value

A much-cited USC study shows that people are willing to part with personal information as long as they receive something of value in return-especially younger consumers. That gives savvy companies an opening to gather and use personal data. And with the right boundaries, marketers can make sure they don't run afoul of the consumer's personal space expectations.

So how do you know where to draw the line? Keep in mind that, while consumers might know you have access to observed and inferred data, they haven't actively given you permission to use it, so communication based on this data is riskier than using data customers have freely shared. Ask customers for permission before you contact them, and ask them about their contact preferences, including location-based offers, email, text, phone calls, etc.

Be prepared to respect your customers' expressed wishes by making sure you're equipped to handle contacts in their preferred format including voice calling. And above all, make sure you give them a reason to want to continue the conversation by providing value. Location-aware technology can give marketers unprecedented access at the point of sale where customers are most likely to make a purchase. And location-aware technology can deliver real value to consumers when they have already signaled an intent to purchase by their presence. But it's important to respect customer boundaries; that's how to use location-aware without the scare.

EXPERT OPINION
EXPERT OPINION