Enhance Loyalty Marketing with Location-based Services - dummies

Enhance Loyalty Marketing with Location-based Services

By Aaron Strout, Mike Schneider, B. J. Emerson

How do you incorporate social media into a loyalty program? You can encourage you loyalty customers to use location-based service (LBS), your LBS customers to be more loyal, make check-ins easier, combine and mine the data available from both, and in the process give your customers an improved interaction experience.

Mine social data

The location aspect of social media is a major advancement in loyalty. The convergence of social activity streams can get you closer to the Holy Grail of marketing — knowing as much about a customer as possible so that you can put the most meaningful offer in front of her.

If you know where (location), and what a customer is buying, you can create an offer specifically designed for that customer. You have a good chance of building loyalty and therefore retaining that customer.

Location gives you some very important data points that can help you get to know your customers:

  • Hometown: Unless a person is checking in to an airport, you can use check-ins to figure out where that person lives. The likelihood is that a customer can change her behavior if the place is close by because it’s easy.

  • Place loyalty: This data point tells you whether a person is loyal to a place because of its location or that person goes out of his way to get a favorite brand.

  • Brand loyalty: Brand loyalists go out of their way to use a brand wherever they are whenever they have a use for that brand. For the most loyal people, no other brand will do.

  • Frequency: Sometimes the proximity of an offer to the places that a person visits the most matters.

  • Travel habits: If you see a customer checking in to a lot of airports, you know that he is a frequent traveler. You need to give him a reason to be loyal to your brand, even if he has to go out of his way.

When you have this information, you have all the components of a good offer:

  • Portray the value of your product.

    Say, maybe 10 percent off a cup of coffee because you know your customer drinks coffee at your store.

  • Respect the customer.

    If your customer comes into your coffee store every business day, offer a free cup of coffee once a month.

  • Give the customer a reason to respond.

    You know your customer prefers coffee over tea, so give him a coffee offer.

  • Fit in what the customer is already doing.

    Make your offer during a weekday because you know he’s there every morning for his daily cup.

Make check-ins passive

Loyalty programs have the potential to make check-ins a lot easier by linking your business’s loyalty program to a customer’s LBS account. Then, you can push any reward offers to that customer.

Say a customer signs up for your loyalty program and gives you permission to send LBS offers to her phone when she enters your store. You provide her with the perfect offer at the right time and place where she can take advantage of it. The fact that she entered your store checks her in. She doesn’t have to do anything to get the offer — that’s a passive check-in.

You can build this functionality into your API. It may not be obvious to you here, but this one is clean and beautiful, which encourages use by developers.

foursquare clearly understands that an API needs to be simple, reliable and well documented.
foursquare clearly understands that an API needs to be simple, reliable and well documented.