This post is by SmartBrief contributing editor Robert Jones.
Move over, Groupon. The marketing world has a new darling — several of them, in fact.
Suddenly, location-based advertising is all the rage, with Google, Foursquare and other heavyweights experimenting alongside some innovative newcomers. In each case, the pitch is fairly straightforward: We know your potential customers, we know when they’re nearby, and we can help lure them into your store with targeted offers delivered to their mobile devices.
“As a smartphone user, I want information to come to me, I want it to be actionable (should I choose to take action) and I want it to be super simple,” says Alice Lankester, marketing vice president at Loopt, which recently unveiled its location-based service known as Reward Alerts.
“As a business owner (or brand), I want to color in the dotted line between online and in-store engagement. The immediacy of the Reward Alerts moves us in that direction — mobile engagement directly followed by in-person interaction.”
Immediacy and flexibility are two of the reasons that local retailers will prefer Reward Alerts to Groupon and its various clones, Lankester says. On a rainy Wednesday night, a restaurant owner will eventually be able to push out a spur-of-the-moment, 2-for-1 special to bring diners through the door.
And though Loopt is still experimenting with its revenue model, retailers won’t be required to offer deep discounts, Lankester says. “Hypothetically, a business could offer a ‘first look’ at new fashion inventory, first admission to a home-goods sample sale or an extra 10 minutes tacked onto a massage. … We’re eager to explore [options] with businesses and get creative.”
While several companies are experimenting with the best way to push their ads to nearby customers, Todd Chipman, founder of MAKEaDEAL, says smartphone users will soon see those marketing messages as, well, pushy. He’s spent more than two years building a mobile app that lets customers specify what they’re looking for, then pull in corresponding offers from nearby merchants.
“This is a far superior customer experience,” Chipman says. “We’re letting shoppers customize their own deal and decide which store has the best offer.
“From the retailer’s standpoint, we’re connecting them with sales-ready foot traffic. These are people who are ready to open their wallet and part with their money.” In that sense, MAKEaDEAL wants to be like a real-world version of Google search ads, putting merchants in front of shoppers who’ve expressed their desire for a specific item.
Chipman says his merchandising engine is “drop-dead simple,” allowing business owners to specify dates and deals, then sit back and wait until customers are ready to buy. Merchants are charged only when a customer claims a deal, and each lead costs less as more customers are delivered. “Try to find any other system out there that delivers a customer for less than a buck a lead,” he says.
Sandra Burkitt, the owner of a Round Table Pizza franchise in San Jose, Calif., was one of the early small-business owners who helped Chipman work the bugs out of his system. During alpha testing, Burkitt says she made deals with three or four customers per day — and those customers often told their friends about the new technology. “The consumers in our community were very excited about making their own deal. They wanted some say in controlling how much they were going to spend that night.”
So would she recommend a service like MAKEaDEAL to other business owners? “Oh, absolutely,” she says. “In fact, I belong to an investment club, and we thought maybe we could jump on board as investors. I think it’s definitely going to catch on.”
Imagecredit: DamirK, via iStock Photo