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TL;DR:

Definition:

Proximity marketing is a way to send personalized messages to your customers at a time and place that is relevant and convenient for them. It uses beacon technologies to deliver content to nearby smartphones. This technique has become particularly popular in the retail industry.

Guiding principles:

  • Do your research to find the right beacon technology for your proximity marketing.
  • Beacons allow for relevancy in the timing of delivery, so make sure the content you send is relevant too.
  • Find the right quantity of content to send to your audience – don’t spam them!

Introduction

Like you use to see only in sci-fi novels, businesses and marketers can now monitor our location and behavior through mobile, wi-fi, and GPS technologies, among other things. While some may see this as intrusive and a little creepy, many people appreciate the benefits that come from it.

More and more businesses are adopting proximity marketing and other location-based marketing techniques to deliver highly targeted marketing messages, both in-store and out. With this comes a better customer experience.

When you look at the advantages location technologies brings to both businesses and consumers, it's easy to see that proximity marketing is an exciting prospect to consider.

Read on to find out more about this marketing technique and how to employ it in your business.

What is proximity marketing anyway?

Wouldn’t you be more likely to redeem a coupon for bubble bath if you received it while browsing the toiletries aisle in a supermarket than when you're at work?

This is the logical reasoning behind proximity marketing. Businesses communicate with their customers based on where they are by using location technology in customers’ smartphones or other mobile devices.

How does it work?

This is most commonly achieved using beacons. This graphic sums up nicely how beacon technologies work:

How beacons work

Other technologies utilize wi-fi or RFID tags,  to achieve similar results. However, beacons are the popular choice these days. 

In 2016, 42% of businesses began using beacon technology, with another 39% planning to adopt it within the next 3 years.

Beacons have many use cases in retail marketing. Here’s a roundup of how real-life retailers are succeeding at proximity marketing, but they aren't the only ones. Restaurants, airports, movie theaters, museums, hotels, and hospitals are also implementing beacon technology into their marketing and communications efforts.

Why proximity marketing is big news right now

With 14.5 million - and counting -  beacons deployed worldwide, location-based marketing is more doable than ever. But beyond being able to fill numerous location data gaps, are there any other big perks to proximity marketing and beacon technology? Actually, there are quite a few. 

It improves your customer experience

Beacons help you give your customers a better in-store experience. By tracking their location, you can help customers navigate around your store and find what they are looking for. You can tailor your content to where they are in the store to give them a more personalized experience. With 77% of customers willing to share their location for a better experience, this will become the standard for retailers in the coming years. 

It builds customer loyalty

When a customer makes a purchase in-store, you can send them a coupon for their next purchase as they leave. This will encourage them to come back again, improving customer loyalty.

Conversely, if you don't offer coupons, they might go to a competitor as 49% of consumers say they will switch brands due to coupons. 

Pro tip: If you plan to use coupons use expiration dates. It will create a sense of urgency. 

It increases sales

If a shopper is spending a long time browsing a certain aisle, they’re probably trying to decide whether to buy or not. Sending a coupon straight to their phone based on what they are browsing for could help them make this decision. Shoppers are also likely to spend more in-store if they are sent relevant offers. 

Fun fact: 76% of customers will trade personal information for relevant offers or coupons. 

It's affordable

Beacons may sound like hi-tech stuff, but they are reasonably cheap to install. They also have a long battery life – around 2-3 years – so they require little maintenance. Beacon provider, blueSense, calculated that they cost approximately 2 cents per hour to run.

It targets customers directly

It can be difficult to get the attention of consumers when they constantly have their heads buried in their phones. (I know I’m guilty of it!) So why wouldn't you want to put your messages where your customers are looking by delivering them straight to their phones.

What's more, people regularly use smartphones while shopping to compare prices or read reviews. This means push notifications will get you noticed. With a click-through rate of 40%, they're also efficient. 

How to communicate through proximity marketing

Proximity marketing sounds pretty great, right? Well, that's because it is. Location-based offers and coupons? What's not to love about that? But you're probably wondering, how exactly does proximity marketing work and what do you need to do to get it up and running for your business? These steps will help you get started without any hiccups. 

Choose your beacon technology

The first thing to do is decide what kind of beacon technology you need for your business. Think about what you want to use beacons for and where they will be located. Understanding your proximity marketing intentions will help you identify the best technology for your campaign.

The two main types of beacons on the market are Apple’s iBeacon and Google’s Eddystone. Find out the technical differences between the two technologies from BKON. You can also find a beacon buyer’s guide over at Kontakt.io.

Get your audience on board

To receive the signal from a nearby beacon and communicate its location, a mobile device must have location enabled and Bluetooth turned on. Certain beacons deliver content through an app, so the customer in this situation must also have your mobile app installed on their phone. Others can also deliver messages through a URL that opens in a mobile web browser, making them a good option for businesses without their own app.

You need to convince your audience to meet these requirements. Provide incentives for customers to install your app, such as a discount off their next purchase. Or, simply communicate the value they will get from using your app. Promote your proximity campaigns as well, letting your customers know how they can benefit from allowing your beacons to identify their devices.

Promote your proximity campaigns as well, letting your customers know how they can benefit from allowing your beacons to identify their devices.

Send compelling content

Once you’ve made these promises to your customers, make sure you fulfill them. If a customer turns on their Bluetooth and downloads your app, they’ll be expecting to receive great content from you. As a matter of fact, 51% of customers want location-based coupons from brands they like. Failing to do this will only lead to disappointment, and likely make people question why they provided their information in the first place. 

A look into proximity marketing by the experts

Rachel Davis

“Customers are willing to engage, interact and share local advertising if it provides immediate value to their lives or those around them. Integrated into a marketing strategy you can add value to both your business and your customers’ lives simply by including proximity marketing based on content that your customer wants to receive.”

Rachel Davis, CMO at Hurree

Creating a deeper brand experience with proximity marketing

Hurree

Tomasz Rupik

“You can’t plan a beacon campaign while sitting at your desk. Visit your location, study the space, and take lots of photos. Take notes on the arrangement of furniture and equipment inside, examine the thickness of walls and the material they’re made of. All of that influences how the Bluetooth signals go through the space and reach smartphones. To get the best coverage, place beacons close to the ceiling.”

Tomasz Rupik, Co-Founder and COO of Bleesk

9 Tips to Create a Successful Beacon Campaign

Kontakt.io

James Ewen

“Reaching users as they are about to enter a similar store always works well as a proximity campaign. These audiences are already in the right frame of mind to buy your product. A tailored notification could be just the trick to inspire a visit to your store or to generate interest in your product.”

James Ewen, Marketing Manager at Tamaco

The 5 Steps to Creating an Effective Proximity Campaign

Tamoco

 Eirik Buer Henriksveen

“To be able to get context, brands and retailers will need something more than targeting by using GPS, because it is simply not granular enough. To get context, they need to see in more detail where the consumers are using most of their time and what they look for – this can only be done through proximity marketing because location-based marketing doesn’t give the opportunity to look into such details.”

Eirik Buer Henriksveen, Account Manager at Unacast

Location-based Marketing vs Proximity Marketing - What is the Difference?

Unacast

Conclusion

In today’s hyper-connected world, vague and generic marketing messages sent out to your entire audience no longer cut it. Consumers want to receive messages that are relevant and personalized to them, at a time that is most convenient and appropriate, and this is exactly what proximity marketing can provide.

People shop with their smartphones in their hands, pockets, or bags, so it’s a great opportunity for reaching them right away while providing relevant content. 

The potential beyond retail is great too. Restaurants can allow diners to browse the menu and order their food while they wait for their table. Airports can provide information about gate locations and check-in wait times. Museums can employ beacons as virtual tour guides, as these devices can recognize what exhibits people are near.

The possibilities are practically endless, and more businesses are starting to realize the potential this technology could hold for them. So, jump into the world of proximity marketing today.