Define Your Location-based Marketing Test-and-Learn Strategy
Depending on the industry and size of your business, some location-based offers will work better than others. Test-and-learn is the best innovation strategy. You use your initial campaign to set benchmarks, and design subsequent campaigns to beat those benchmarks based on what you learned about your audience during the last campaign.
The easiest piece to test is the offer, but you can test other audience variables as well, such as various offers versus different goals. For instance, using acknowledgement and recognition to build loyalty might be one area to test. Trying varying levels of discounts, giveaways, games, and even experiences might be the way to go for customer acquisition or retention.
Ingenuity goes a long way when it comes to customer adoption and earned media.
Place multiple offers into the marketplace
You need to be careful not to put too good of an offer out into the market. Don’t bank on the law of averages to protect you from spending hundreds of millions (or billions) of dollars on promotional giveaways.
To avoid this, test multiple offers in the marketplace at the same time. In doing so, you can avoid confusion by segmenting offers by the following:
Geography: Push out different tests in different cities.
Time and date: Try different offers at different times of the day or different days of the week.
Multilevel offers: Allow customers to unlock better offers the more they engage.
Customer’s choice: Provide two or three items of similar value and let the customer pick.
Random: Offer several items of similar value and randomly distribute them. Take notes on customers’ reactions.
Learn from others who have tested the waters
For better or worse, only a few dozen Fortune 500 companies have tested the waters in the world of location-based marketing. Here are a few case studies from well-recognized brands that are worth looking into:
Murphy USA: It tapped into Whrrl (now a part of Groupon) to provide discounts and free gas to loyal customers.
Gap: Offered 10,000 pairs of jeans to the first 10 check-ins in Gap stores across the country.
Robert Mondavi Wineries and Franciscan Estates: Partnered with SCVNGR to offer rewards for playing games at their venues.