Is Location Awareness the Next Big Thing in the Customer Experience?


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Unless you’re a shopkeeper with a stack of hand-drawn signs ready to go at a moment’s notice, you haven’t had the ability to know exactly where your customers are and tailor your marketing approach accordingly. Now that emerging technologies are making this possible, many successful marketers are collecting – and more importantly, using – the data that can be gathered to more intelligently serve their customers (as well as gain important customer insights).

describe the imageWith a March-May survey by Nielsen showing 61 percent of U.S. mobile subscribers had a smartphone, and Pew Research measuring heightened location awareness among smartphone users, it’s clear these devices will continue to impact the buying experience for tech-savvy customers, and that no one knows where these trends will end up. Today, mobile devices are able to do much more than tell people where a business is located or help them look up brand reviews — for example, geolocation technologies identify the real-world geographic location of an object (like a smart phone) carried by a customer, making it possible for companies to know right when a customer is in a certain location.

The goal is to capitalize on these technologies by observing user behavior and applying those insights to become smarter, more responsive companies. For example, a growing number of brands are installing WiFi in retail locations not only to offer better user experiences for customers, but to track what they’re doing and where they are. A company could use that knowledge to strategically place sales reps in a store’s most highly trafficked areas during busy hours, boosting sales as well as improving the shopping experience.

As I wrote in May, Nordstrom took some heat for measuring consumers’ cell phone signal strength through a program they piloted with Euclid Analytics in select locations. The retailer ended the test and called it a success, but one downside was some consumers’ perception that it invaded their privacy.

How are Companies Utilizing Geolocation the Right Way?

If your company is considering utilizing these types of technologies, there are a few key lessons to be learned from Nordstrom and other early-adopters:

1) Be transparent: Make sure you let people know what you’re doing and give them the option to join in – or opt-out.

2) Adopt a win-win mindset: Smart brands are using the information they gather to reward people and enhance customers’ experiences, not just improve their own sales.

3) Connect the “real world” the virtual one: People are engaged with their devices. By connecting your real world with their virtual one, you enter the realm of the “physical web,” allowing customers to search, tag and navigate your stores the same way they surf the web.

When it comes to tracking prospective customers, some companies are employing location-awareness apps that send users coupons or special alerts once they’re in a store or specific location. Others rely on these wireless signals and the sensors built into smartphones to determine where consumers are moving throughout the store—creating “heat maps” of customer activity and using this data to adjust marketing, store layout or signage. These approaches can “hyperlocalize” the customer experience when done correctly.

The key is locating your customers and gathering this data without being perceived as invasive. As can be seen in Nordstrom’s experience with Euclid, it can be hard to strike this balance. However, Estimote—a company that creates small, wireless sensors that use Bluetooth to detect the location of nearby smartphones—is trying to do just that. The company is working to create what Wired calls an OS for everyday life or a way for businesses to personalize the consumer experience based on location awareness. The difference between this solution and Nordstrom’s attempt at geolocation? Smartphone users will have to opt-in to receive deals, coupons and information, rather than be tracked without their consent or knowledge.

Make Mobile Devices Part of the Experience
We all utilize our phones while hunting for new products and services. Our customers love to as well. They’re looking up reviews, searching for deals and learning more, but they’re also using them to save when it comes to making purchases. The fact is, utilizing geolocation data to better serve a person works, and it can help a business grow and get closer to its customers.

In fact, a June survey from digital coupon site RetailMeNot showed that 51 percent of people would be more likely to buy something if they received a discount via mobile—and this number leaped to 63 percent when the customers received the coupon when already in a store. But tracking people without their knowledge isn’t the best route to take; obtaining consumer consent and remaining transparent is key to enhancing the experience and gathering useful data.

Many companies are looking for ways to be part of the geolocation evolution. But smart companies are doing so by using the data they gather to enrich and reward their customers as well – making their lives easier, and their experiences better and more personalized as a result.

This blog originally ran on, where Michael Hinshaw writes the weekly “Get Customer-Centric” blog.

Republished with author's permission from original post.


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