Understanding how the geolocation of consumers and competing businesses affects sales and market behavior is essential to setting the direction you want your business to take. We’re talking about geomarketing.
William Applebaum was the first to notice this and put it to work for retail. In 1929, he studied how retail performed in smaller US cities, placing pushpins on a map to locate his business’s stores.
It didn’t take him long to realize that the technique made the information much easier to visualize and, as a result, led to sharper decision-making.
After nearly a century of supporting entrepreneurs of all sizes and across all markets, the pushpins have been replaced by Google Maps, thankfully. Read on to learn more about how geomarketing helps boost retail performance.
What is geomarketing?
It’s a branch of marketing that relies on map-based location and visualization of market data, with the goal of improving the strategic decision-making process for a given brand, product, or service.
Taking into account the geographic location of customers, prospects, and the competition creates competitive advantages, because the business starts relying on accurate data about consumer behavior and how the region where consumers live influences their purchasing power. This helps managers identify market opportunities, build customer profiles, and more.
Geomarketing analyses can be applied at different levels, from states, cities, and neighborhoods down to specific streets and commercial locations, supporting decisions to improve planning and to structure and implement methodologies and actions tied to territorial consumption dynamics.
How does a geolocation strategy work?
Simply put, a user with geolocation enabled on their mobile device sends information about their location through the sharing features most apps offer today, such as the well-known check-in on Facebook, Instagram, Google, and Foursquare.
When a customer visits a restaurant or store and opens a geolocation-based app, the GPS will identify where they are using the device’s mobile internet.
Finally, the person selects the name of the place they’re at and shares that information on their social networks. We know this process as a check-in, one of the most common ways to use geomarketing to benefit a brand.
Keep in mind that geomarketing can be used both to analyze the feasibility of a business in a given region and for more complex applications.
For example, companies can use the tool to forecast sales at new points of sale (POS), as well as to map which products have the greatest sales potential in the region in question.
How to implement it in your business
Now that you have a clearer understanding of how geomarketing works, we’ll show you a few simple practices to implement it in your business.
Encourage check-ins
As you’ve probably noticed by now, the check-in is one of the most important geomarketing tools. Although it seems simple, it has great power to influence other consumers to jump on board.
So encourage customers to check in at your store by offering some kind of benefit in return, such as discounts, freebies, or even the Wi-Fi password.
That last option has been widely used by restaurants, coffee shops, and other retailers that draw heavy foot traffic every day. Besides being a fair trade, the strategy is highly effective, since there are ways to set things up so customers only get internet access after checking in at your store on social media.
Run loyalty campaigns
Speaking of a fair trade, Foursquare is an indispensable tool for customer loyalty actions and campaigns. After all, the social network lets you reward the consumers who visit your store most often.
For example, the user who checks in the most over a given period is named “mayor.” Your store can reward the mayor with some kind of exclusive perk.
Encourage reviews
Reviews are a great way to get real feedback on customer satisfaction with the services or products your brand offers.
In addition, positive reviews from customers who had a pleasant experience at your store help undecided consumers get the information they need to clear up their doubts. It’s good old word of mouth, but in the digital space.
So whenever possible, encourage users to leave reviews and share their opinion of the service, the quality of the products/services, and so on.
Promote geotagging
Geotagging is an offshoot of geomarketing in which a person tags another user in their post, whether on Instagram or Facebook. The biggest advantage is spontaneous brand exposure.
Just like with reviews and check-ins, it’s up to you to encourage this kind of behavior from your own customers through simple loyalty actions and tactics. In other words, for consumers to advertise your business for free, offer some benefit in return, such as a discount coupon.
Interact with the market
Last but not least, as a company, comment on and respond to the interactions users have with your business.
This way, not only do you encourage engagement, but you also show that your brand takes a human approach and values the opinion of each of its customers, building lasting business relationships.
What are the strategic benefits of geomarketing?
Many companies still don’t use the resources geomarketing has to offer. That’s why making this tool part of your set of marketing strategies gives you a competitive edge in a market as fierce as today’s.
Among the benefits geomarketing has to offer, we can highlight:
- mapping territories with the highest concentration of target profiles;
- geographic analysis of the competition;
- analysis of areas with consumption potential for retail;
- identifying suitable regions for opening new POS;
- segmenting and identifying the regions with the greatest potential;
- comparing territories to boost presence in underperforming areas
- heat maps/concentration of residents and workers in target areas;
- travel time and commute analysis;
- geographic penetration of the product mix;
- locating customers and prospects.
As you’ve seen, although geomarketing may seem like a new concept, retail has been using it for nearly a century. Thanks to technology and to the widespread adoption of internet access and social media, the tool has delivered invaluable benefits to the marketing strategies of companies that take a technology-driven approach to innovation and growth and want to add a competitive edge to their operations.
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