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What is proximity marketing? How does it work?
Proximity marketing refers to communicating with customers at the right place, the right time and with highly relevant and personalised messages, on their smartphones - be it greeting at the entry points, special offers in the store aisles, or getting feedback on a new product.
Legacy advertisements on television, billboards, radio and pamphlets could be appealing, but they lack the impulsive drive to avail an offer, or try a new product. However, digital technology, such as beacons have bridged this gap between offline and online.
For decades, traditional shopkeepers and business owners have been communicating with their customers at significant moments, but proximity marketing as a term got introduced to marketers in 2008. This led to brands and businesses sending location-triggered text messages to cell phones that were in proximity to a Bluetooth network and had "discoverable" Bluetooth mode switched on.
To understand how proximity marketing works, let us consider an example of a retail store.
Businesses, especially retail and real estate, have been focussing immensely on location for the last decade. This is because reaching out to customers without being sure of the location is just digital marketing, which is not very effective for local businesses. However, marketers and business owners now realize that the targeting needs to be more specific than just GPS and geofencing. This is where proximity marketing steps in. Let’s understand in detail about their differences and when each one of them is useful.
Location-based marketing in simple terms means communicating with potential customers within a range. Let’s say, a coffee shop runs a campaign to introduce a new almond flavoured Cappuccino on their menu. Setting a location based marketing campaign would mean that all potential customers in the range of, let’s say 1 kilometer, are notified about the new coffee. This might also include reaching out to a user in the nearby ice-cream store.
This is done by calculating the latitude and longitude of the smartphone using GPS or cell tower triangulation method. It is hence defined as the kind of marketing that uses mobile to target customers in a particular geographical area.
Geofence is a virtual boundary which can range from over 50,000 meters to anything else. Ideally, for interactions above 80-100 meters, business owners must consider geofencing.
Proximity marketing however, is a more granular form of location marketing. For the same example discussed above, the coffee shop owner could decide to have a more targeted approach and reach out to customers passing his coffee shop, lets say in the range of 300 meters. This approach is more personalized and contextually relevant.
Proximity marketing is about reaching out to customers based on the accurate position and not a virtual geofence. This makes the communication more contextual and personalised.
Proximity marketing is recommended for highly targeted zones - within 100m of distance. Proximity marketing use-cases involve interaction with customers about a particular product, brand on a shelf, or any other similar application.
Business owners and marketers have been using proximity solutions that do not involve technology, for decades - physical signage and banners. But in last few years, technologies have become much more affordable, and therefore, a lot of businesses have integrated them into their marketing strategies. Advanced technologies that make proximity marketing happen are - Bluetooth beacons, NFC, RFID and WiFi.
Bluetooth beacons are currently the leading proximity marketing technology. According to Proximity Directory Report Q4 2017, 86% of the proximity sensors deployed across the world are beacons. According to the same report, 7 18,763,000 proximity sensors were deployed by Q4 2017. Beacons are low energy transmitters, equipped with Bluetooth low energy, used to deliver contextually relevant notification on nearby smartphones.
There are two beacon standards :-
iBeacon: Apple first launched beacon standard in 2013. That is when physical and digital started merging. A lot of retailers like Macy's, Walmart and Starwood hotels stepped up to the plate to implement iBeacon in their store outlets. iBeacon allows apps on smartphones to receive BLE signals from the beacon.
Eddystone: Google introduced the Eddystone protocol in 2015. It is an open URL protocol specification that defines Bluetooth low energy (BLE) message format for proximity beacon messages. It has since become hugely popular among businesses and has only continued to grow. Eddystone protocol restricted the popularity of iBeacons in no time. Now, smartphones can receive Eddystone signals with or without apps.
Beaconstac beacons support both Eddystone and iBeacon.
UPDATE: On October 25, 2018 Android announced that Nearby will no longer be supported on Android smartphones after December 6, 2018.
NFC was designed to enable highly secure payments and applications. NFC enabled customers to pay just by tapping smartphones against NFC-enabled devices. This technology did not fly off really well, even though it appeared promising in the beginning.This failure could be due to the following reasons -
Wi-Fi has not traditionally been a proximity solution. However, with the widespread of public Wi-Fi, marketers are now leveraging Wi-Fi to send notifications. The Wi-Fi hosting website can send location-specific content to the consumer’s browser.
However, Wi-Fi requires users to consent to a connection each time they enter the business location. And, Wi-Fi-based systems are not very accurate when it comes to proximity marketing.
RFID tags are used to track store product movement and inventory. RFID introduced in 2003, was considered a revolution. It quickly went from the little-known technology to the next big thing. However, this rapid growth was ephemeral. Here’s why RFID has limited adoption :-
Proximity with beacons yield results way superior to legacy channels and other competing technologies.
Beacons broadcast notifications to Bluetooth enabled smartphones. In 2018, nearly 4 billion devices will ship with Bluetooth technology. The percentage of people having their Bluetooth switched on, varies from country to country.
Based on our research and statistics over the internet, approximately 50% of the users in Canada and US have their Bluetooth switched on. Russia has 25%, whereas the UK has 33% of the users with Bluetooth switched on all the time.
With beacon technology, businesses may or may not leverage the experience of their brand app to communicate with their consumers. Using the Eddystone protocol, sending notifications using NearBee is a breeze.
NearBee has been designed to be better and far superior to Google Nearby. Unlike Google Nearby, it has the ability to send non-silent, rich notifications, non-duplicate and visually appealing notifications straight to the lock screen of Android users. NearBee will also have the ability to morph into a business’s unique branding once a customer enters the store. Customers will also be allowed to ‘follow’ businesses and receive controlled timely updates that can be sent even when they are no longer in the range of the beacon.
The click-through rate of a beacon campaign varies based on multiple parameters :
However, when done well, beacon campaigns have yielded a click-through rate (CTR) of 55% - 60%. However, this is not typical for all businesses. On an average, most small businesses see a CTR of 2% - 4%. With higher targeting and personalisation, the results get better.
A CTR of 2% is incredible for offline businesses given the results attained by other advertising channels. CTR of an average beacon campaign is 25 times that of a social media campaign.
The three factors which contribute to the brilliant ROI of beacons are - low cost, long battery life and minimal efforts.
According to Unacast’s Proximity.Directory Q1 2017 Report, retailers can improve their position and increase the operating profit by nearly 9% with an ROI of 175%. This ROI figure shoots to 365% for small and medium businesses.
Beaconstac supports various beacon hardware options which are found to be best in field tests. The hardware lineup consists of all-purpose indoor beacons, robust long range beacons, pocket beacons and keychain beacons.
RELATED: https://blog.beaconstac.com/2018/02/proximity-marketing-with-pocket-beacons-for-retail-real-estate-and-on-the-move-applications/
The lineup includes beacons in various form factors to suit multiple business needs and applications. Learn more about the options we support on the Beaconstac hardware data-sheet.
Beacon deployment strategy depends on what the business wants to achieve. However, there are few tips for beacon deployment which work across industries.
Beacon notifications can direct to a custom URL (any website), a form, or a markdown card. Markdown cards are creatives used instead of websites. Beaconstac provides markdown templates which can be easily modified to suit various campaigns. [Download inspirational markdown cards across verticals]
Assign the markdown card or form to the transmitting beacon. Watch the video to learn how to do it.
Beaconstac allows the notification creation in multiple languages. This helps marketers target customers in their preferred language. [Read more about dynamic notifications]
Beacon technology has changed the way brands interact with customers. Although advertisement remains the primary benefit of proximity marketing, marketers leverage it for a lot of other use cases.
Gone are days when brands were courting customers only by sending out advertisements on television, radio and magazines. In the last few years, advertisements have made a significant shift to a more targetable and data-driven option - beacons. Legacy ads cannot be micro sliced via location or demographics. This is why marketers are now relying on proximity marketing solutions to find, engage and most importantly, bring back customers.
Brick and mortar stores can achieve the level of personalisation that e-commerce sites like Amazon and Walmart offer. With beacons in stores, marketers can achieve the following :-
Personalization leads to positive experiences that, in turn, leads to more engagement, loyalty and sales. According to research by Marketing Insider Group, 78% of consumers say relevant content increases their purchase intent.
Customer loyalty programs are all about keeping current customers engaged and happy. These programs enable customers to automatically check in, get credit for their purchases and earn loyalty rewards. Big brands and local merchants are now using beacons to provide mobile loyalty among customers. Interesting use cases of beacon-based loyalty programs are :-
Businesses today, rely heavily on sophisticated data gathering mechanism. This is because data-driven campaigns help in better understanding of shopping behaviour. Many successful retail brands like Macy’s, Walmart, Kenneth Cole are using beacons to gather extensive data for future campaigns.
With beacons, retailers can,
Very few technologies have seen the kind of success that beacons have. And this is primarily because with the introduction of Eddystone; marketers did not require apps to communicate with their customers. Beacons communicate with Bluetooth enabled smartphones via two different protocols - Eddystone and iBeacon.
Eddystone beacons broadcast URLs that can be detected by smartphones even without an app. Services on the device such as Nearby Notifications, Samsung CloseBy or Physical Web compatible apps scan for and display these Eddystone URLs after passing them through a proxy.
On Android phones - Nearby is a Google service developed for Android phones. It scans for Eddystone URLs and detects packet if any.
UPDATE: Nearby will be discontinued from December 6, 2018. We have launched NearBee for Android that delivers non-passive, non-generic, rich notifications to the lock screens of Android users. Read our blog to know why it’s superior to Google Nearby. Download NearBee for android.
On iOS phones - To implement beacon campaigns on iOS devices, these devices need to have Physical Web compatible apps or browsers. iOS devices need third-party apps to scan and detect notifications. We have developed our app - “Nearbee”, which continuously scan for Eddystone URLs.
Proximity marketing for iOS devices needs apps. This could be the brand app or a third party app that customers have on their phones
RELATED: https://blog.beaconstac.com/2018/02/how-to-run-a-powerful-proximity-marketing-campaign-on-ios/
Proximity marketing campaigns which leverage their brand apps yield impressive results. Companies such as Heineken, Coca-Cola and Screenvision leveraged their brand apps to implement proximity campaigns and witnessed massive success.
Our NearBee SDK will quickly enable you to convert your app into a beacon powered app. If you are seeking to implement a wide array of complex use-cases, use Beaconstac SDK.
Such businesses need high performing and innovative third-party apps to implement proximity campaigns. Third-party apps strike the right balance between respecting a consumer’s privacy while providing timely proximity marketing notifications. These third-party apps continuously scan for Eddystone URLs and display the notifications as soon as they detect an Eddystone URL.
Beaconstac has developed an app – “Nearbee”. This app scans for Nearby notifications and displays the notification on the iOS device.
Here’s how it is superior to any other third party app :–
Proximity marketing in retail has moved beyond push notifications and coupons. It is now in the next level of personalised content delivery. It has eventually become the biggest drivers of beacon deployments. Retail is leveraging beacons for attracting new customers, enhancing their store experience, building loyalty through personalised messages and collecting customer feedback.
Sharing information related to a specific place or object is one of the frequently used retail beacon use-case. Supermarket retailers leverage beacons to share useful information about a newly launched product, the brand or the description of the products they are selling. Restaurants also use beacon campaigns to inform users about the special dishes on the menu, chef’s recommendations and more. Car dealerships on other hand leverage beacons to inform users about the specifications of a car, price comparison with similar models etc. This not only makes information readily available on the mobile but also enhances the customer experience and saves printing dollars.
Beacons are being employed in stores and malls to raise awareness about ongoing promotions and discounts, navigate visitors to venues, broadcast sales and discounts messages next to relevant products, and integrate POS to beacons to ease payments. Every retailer promotes the ongoing discounts to boost sales, however, getting beacons to do the job ensures that the pitched offers are relevant for the visitors and hence increase the chances of conversion.
In the era of experiential retailing, delightful shopper experience is the key. Beacon makes the visitor experience much more personal, customized and engaging. Motivate shoppers to visit more sections in your store, transform mannequin into talking salesperson, gamify the experience by rolling out location specific quizzes and treasure hunts. In an attempt to close the loop between physical stores and digital awareness, retailers are also linking beacon campaigns to social media channels. This enables users to share their in-store experience, online. Other ways to enhance the shopper experience are - enable booking/registering for a test drive through the smartphone, welcoming users into the store and informing them about one deal they should not miss out.
GPS is great for outdoor locations, however, it doesn’t work as expected when a visitor enters a building. This is where beacons are handy (GPS vs beacons)! Beacon powered apps use the triangulation method to detect the exact position of Bluetooth devices, indoor or outdoor. This is especially helpful for multi-storey malls, huge airports and museums. For the end-user, it functions just as a GPS. Beacon navigations can be marked with important locations such as important stores or art pieces, refreshment zones etc.
Real estate is one of those transforming industries that has recently picked up significant interest in beacon-based proximity marketing for boosting customer experience. The real estate brokers and agents are currently using beacons to attract home buyers, capture leads, push business cards and engage with them.
Attaching a beacon to the ‘Open House’ sign can go a long way in attracting potential clients. The notification can disperse a lot of useful information about the house, previous owners and even a form that lets potential buyers fix an appointment with the real estate agent.
Instead of an agent explaining things about the house, beacons can do that. Every room that a potential buyer enter can have a beacon that sends out detailed information about it. This allows buyers to have their own personalized experience and more than one buyer can browse through the house without needing a dedicated real estate agent.
Real estate is one of those transforming industries that has recently picked up significant interest in beacon-based proximity marketing for boosting customer experience. The real estate brokers and agents are currently using beacons to attract home buyers, capture leads, push business cards and engage with them.
Attaching a beacon to the ‘Open House’ sign can go a long way in attracting potential clients. The notification can disperse a lot of useful information about the house, previous owners and even a form that lets potential buyers fix an appointment with the real estate agent.
Instead of an agent explaining things about the house, beacons can do that. Every room that a potential buyer enter can have a beacon that sends out detailed information about it. This allows buyers to have their own personalized experience and more than one buyer can browse through the house without needing a dedicated real estate agent.
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