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Proximity Marketing: What Is It?

 

Looking for a way to personalize your mobile marketing, and gain an edge over your competitors? Proximity marketing may be for you. But like many marketing techniques, proximity marketing has both benefits and drawbacks.

Today, we’ll cover what proximity marketing is, as well as different types and how to implement them. We’ll also break down the pros and cons of proximity marketing.

What is proximity marketing?

Proximity marketing is location-based mobile marketing.

It involves sending personalized messages to customers, or triggering other digital branded experiences, when their mobile devices approach a certain location. It’s all thanks to digital location technology.

For example, you might use proximity marketing to send your customers a message – or even a coupon – when their phone gets close to your brick-and-mortar store. Thanks to proximity marketing, you can seamlessly merge the physical experience of visiting your business with the digital, mobile world customers spend most of their time in.

Many types of location technology are used in mobile marketing, and they all fall under proximity marketing. We’ll break down some of the most popular types in the next section.

Proximity marketing techniques and how to implement them

Here are some of the most popular technologies used in proximity marketing:

NFC (Near-field communication)

NFC lets a nearby phone securely communicate with an RFID (radio frequency identification) chip, so the chip can send customized information to the phone.

The most common use of NFC in stores is for contactless mobile payment, like with Apple Pay and Google Pay. But there are plenty of ways to use NFC for proximity marketing. You could embed RFID chips on your products or shelves to share instant information (like short descriptions, pictures, videos, and reviews) when customers point their phones towards the chip.

For example, some clothing stores send pictures and videos of how their items could be styled to customers’ devices, including compelling runway shots.

And one Pennsylvania pharmacy showcased videos and reviews of RFID-tagged products when customers held up their phones to those products. As an awesome side effect, the store was able to collect data on what products attracted the most attention, and which products weren’t purchased even after their tags were triggered.

You could also designate an RFID tag to transmit info about your loyalty program, or award loyalty points when a member interacts with a specific tag in your store in “scavenger hunt” style. The possibilities are endless!

RFID tag example

An RFID tag on shoes transmits product information and a coupon to a customer’s smartphone, after they point the tag at the shoes. Source: Beaconstac

Geofencing

Geofencing technology lets a business send a message to a phone whenever it comes within a designated radius around a physical location. With help from satellites and cell towers (which enable a phone’s location-tracking features), you can create a virtual “fence” around your business. Then, you can automatically text a sale notification or limited coupon to the customers who cross the “fence.”This way, you can push messages only to your customers when they’re  close by and most relevant.

You can set up geofencing messages using your brand’s app, although customers will need to have their app open to receive messages. Or, you could use more traditional SMS messaging, which will trigger even if your app isn’t open. No matter which method you use for your geofence, though, you’ll need your customers to opt into your messages first.

Geofencing marketing

Source: Propellant Media

Beacons

Beacons operate similarly to geofencing, but they work using Bluetooth technology instead of satellites and cell towers. A beacon is a device around half the size of a smartphone, and can send a Bluetooth signal within a 50–150 yard radius. In this manner, beacons can help with hyper-targeted marketing when a customer gets very close to your business, or when a customer’s already in your store. You can even use multiple beacons, each with a smaller radius, to push information about specific products that a customer approaches.

Unlike other proximity marketing technologies, a beacon can’t communicate directly with a customer’s device through traditional messaging. Instead, you’ll have to use your brand’s app.

The app will then detect the beacon’s signal and send a message to any customer nearby who has the app running. If you detect individual users via your app login, you could even push hyper-targeted coupons and messaging that will best resonate with them.

Of course, you’ll need customers to both download the app and have their Bluetooth on (and fewer people keep Bluetooth on, compared to people who keep location tracking on). So, beacons might work well for a customer retention strategy, but they won’t help nearly as much with new customer acquisition.

beacon technology explanation

Source: 360 Techno Soft

Internet browsing

One other popular proximity marketing technique involves triggering offers and content when customers access the internet at your location. You could do this when customers log onto your business’ WiFi (airlines, department stores, and coffee chains are masters of this). Or, you could use mobile browsers’ location features to trigger dynamic website content when customers are in or near your store.

Benefits of proximity marketing

What unique benefits does proximity marketing offer? Here’s an overview.

Retains existing customers: Since customers need to download an app, or opt into proximity marketing efforts another way, your marketing campaign will probably focus on existing customers. This is an advantage, not a drawback. Retaining customers is less expensive than acquiring new ones, since returning customers’ purchases are not offset by customer acquisition costs.

Creates a personalized customer experience: Customers want a personalized experience from the brands they love: 84% say that a personalized experience is key to winning their business. Sending info and deals related to a product just as customers are checking it out ticks that box handily. And with the data you collect, you can easily send hyper-personalized offers to individual customers, like coupons for products they purchase most, or products they investigated but didn’t buy.

Meets customers where they are: Proximity marketing targets customers who are most likely to purchase, since they’re either in your store or very close to it. And since most customers live on their phones, proximity marketing meets them where they are digitally, as well. People usually research brands and products on the internet as they decide whether to purchase. The right proximity marketing techniques (especially sending videos and reviews) can stack the deck in your favor.

Possible drawbacks to proximity marketing

Even though proximity marketing has several advantages, its drawbacks are just as significant. If you use proximity marketing, you’ll need to take these disadvantages into account.

Privacy concerns: This is the main drawback of proximity marketing. Even though many customers appreciate the personalization, others may not enjoy being tracked and followed. So, you’ll need to convince customers (through targeted promotions and coupons) that the benefits outweigh the privacy intrusion.

Consent concerns: This goes hand in hand with privacy concerns. Yes, your customers must opt into any proximity marketing campaign, whether it’s via text, app, or another method. But with marketing this targeted, consent isn’t just about opting into the process.

Customers should understand exactly what data you’re collecting on them, and how you’ll use it. They should also be able to opt out of being tracked. And if customers do opt out, you’ll need to figure out other ways to convince them to stick with you while respecting their privacy. These concerns likely have legal implications, so it’s best to familiarize yourself with data privacy and consent regulations in your country.

Key takeaways

Proximity marketing provides a unique way to personalize and target your marketing. Because it’s focused on customers who are already near your place of business, proximity marketing appeals to those most likely to purchase from you. You can even hyper-target campaigns based on the products customers investigate and approach.

But remember to balance these advantages with customers’ privacy concerns and consent. If you weigh the pros and cons carefully and create a clear strategy, you’ll increase your odds of reaping the benefits of proximity marketing.

 

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