Proximity Marketing

Explore the Strategy of Proximity Marketing

Proximity marketing

In 2006, there were less than three billion subscriptions to mobile-cellular telecommunications services. By the end of 2011, that number more than doubled to roughly six billion mobile-cellular subscriptions, the International Telecommunications Union estimated.

With mobile devices becoming a staple of modern society and the preferred way of accessing digital content, today’s successful marketing professionals will need to understand how to connect successfully with mobile consumers.

Proximity marketing helps companies and service agencies do just that. By harnessing the targeting power of Bluetooth and Wi-fi technology, marketers are able to bring a variety of marketing messages to consumers who are both nearby and looking to make a purchase.

What is Proximity Marketing?

Proximity marketing—also sometimes called hyperlocal marketing—uses cellular technology to send marketing messages to mobile-device users who are in close proximity to a business. The market is defined by those with Bluetooth or Wi-fi technology, and the message is sent out electronically by businesses hoping to digitally connect with nearby consumers. (See also Close-Range Marketing)

Proximity Marketing Strategies

  • On-the-Spot Digital Coupons: This strategy allows retailers to send digital coupons to all of the shoppers that are in proximity to their store via the Bluetooth or Wi-fi network. It can be a powerful tool to capitalize on high-traffic times, test out interest in a new product, or stimulate sales on a slow day.
  • Interactive Digital Signage: Eye-catching digital signs, while not having the penetration power of a digital message sent to all mobile phones in proximity, can still be highly effective in engaging customers. A digital kiosk outside a movie theater, for instance, can allow customers to browse their choices and watch previews based on their own individual tastes and preferences.
  • Bar Code Marketing: One of the latest advancements in proximity marketing is the bar code. Similar to what is used as price tags at grocery stores; companies have now taken to using a simple bar code (sometimes called QR codes) as a way to connect with customers. Again, this strategy is somewhat passive, in that passersby need to choose to scan the bar code with their smartphone, but it requires less time and attention than digital signage. Shoppers can scan on the fly and connect with the content on the spot or bookmark it and come back to it later.

Via the Wi-fi or Bluetooth signal, proximity marketers can send content that’s similar to a mobile application program (app) that appears automatically on the mobile devices of consumers. While the audience is limited to those in the proximity of the business and those using its Wi-fi or Bluetooth signal, the message is very user friendly and reaches those most likely to visit a store.

Who employs Proximity Marketing?

Just about any business or service that is operating from a fixed location can implement a proximity marketing strategy. Some examples include:

  • Major retailers, such as Ikea or Macy’s, can send store maps and coupons or offers to apply for their credit card or to enroll in their loyalty or rewards programs.
  • Hotels can inform guests about on-site events and promotions or can offer to enroll them in loyalty or rewards programs.
  • Restaurants can send special menus/daily specials, coupons, offers for loyalty programs, or perhaps send trivia questions or other games to help them pass the time while they wait for their table to be ready.
  • Shopping malls can offer a proximity marketing benefit to their tenants by putting together a package of coupons or offer a discount at any mall retailer.
  • Travel hubs such as airports and public transportation centers can provide maps or display ads that can be sold to local tourist destinations.
  • General information about a product or service can be delivered through proximity marketing even if the fixed location of the business or service agency changes.

Public officials giving speeches at community centers can, for example, provide important public-service announcements or event information to constituents in the audience. Also, trade-show vendors marketing their products at a convention can send promotional or educational information to the attendees from their current “popup location.” (See also Mobile Marketing)

Putting University Students in Close Proximity:

Lynx, a maker of body sprays in the UK, was looking to connect with university students. To do so, the company put together a proximity marketing campaign at several campuses throughout the UK. A large floor decal was installed in a high-traffic area of the student union as a “download spot,” where students could use their smartphone to download a Lynx-branded dating application. An average of more than 500 students a day downloaded the application, giving Lynx high visibility and making it a hot topic of discussion in their target market.

What kinds of customers are effectively marketed to with Proximity Marketing?

With more than six billion mobile phones in the hands of consumers today and with the numbers steadily climbing, phones are becoming a basic necessity of the 21st century. This makes just about every consumer with a smart phone potentially susceptible to a proximity marketing campaign, particularly younger, tech-savvy shoppers who are more likely to own smartphone and use them while shopping.

Locations such as shopping malls, large retail outlets, and trade shows, where consumers are generally planning to spend at least an hour or two, are prime areas for a proximity marketing campaign. These customers are both actively shopping and also more likely to be lingering and open to proximity marketing information, promotions, and suggestions. One of the key benefits of proximity marketing is that its messages reach a high percentage of potential customers who are in the area.

How is a Proximity Marketing plan developed and employed?

The main purpose of the proximity marketing plan is to connect with customers while they are near your business or service and spur them into action.

In the case of mobile messaging, it’s important to consider adding an opt-in component to your campaign. More and more, customers value control over the messages they receive and desire privacy from unwanted solicitations. A simple opt-in invitation, delivered via mobile device, such as: “Would you like a 20% discount on your purchases at the mall today?” can effectively engage nearby consumers without seeming too invasive to their shopping experience. (See also Promotional Marketing)

Mobile devices are made for short messages and quick interaction, and there is intense competition for the attention and time of the mobile device user. Therefore, in developing a proximity marketing plan, messages must be sharpened and honed to be as clear, concise, and impactful as possible.

Because the proximity marketer’s time with each potential customer is so short, it’s critical to create goals for that interaction. If the goal is to drive as much traffic as possible to the business and maximize sales that day, then an electronic coupon or special offer might be the best strategy. If the store has a high turnover rate, the goal may be to make a connection with customers by offering them incentives to return.

Once the proximity marketing plan is developed and implemented, it should be constantly monitored and adjusted. The digital and interactive nature of most proximity marketing campaigns provides the advantage of real-time data collection of response and success rates. If a message is failing to connect, it can be easily and quickly adjusted.

Statistical Trends of Mobile Device Usage

The statistical trends in mobile-device usage bode well for the future of proximity marketing. In 2009, there were about 4.6 million mobile subscribers worldwide. By 2016, that number is projected to grow to about eight million, which would be a roughly 74% in the use of mobile devices. At the same time, it is becoming increasingly affordable to use mobile devices to gather information and connect to digital content. The cost per megabyte of mobile data dropped from 46 cents to 6 cents between 2008 and 2011, and it is forecast to continue to fall to about 1 cent/megabyte in 2015.

What types of careers work with Proximity Marketing strategies?

Interactive Marketing Designer

This position is at the ground floor of proximity marketing. Interactive marketing designers must have a strong communications background in order to craft concise, compelling messages, and they also need in-depth technical expertise in designing and programming for digital platforms.

Education/Experience

Salaries of Proximity Marketers

  • Interactive Marketing Designer
    Median pay: $44,010
    Top earners: $77,370
  • Market Research Analyst
    Median pay: $60,250
    Top earners: $112,560
  • Senior Marketing Manager
    Median pay: $116,010
    Top earners: $155,050

Source: US Bureau of Labor Statistics

Interactive Marketing Designers will need a bachelor’s degree in graphic design, human-computer interaction (HCI), or a design-related field and have 1-3 years of related experience.

Market Research Analyst

Market research analysts research, analyze, and report on the consumer data that has been compiled in order to help inform the proximity marketing strategies. Effective market research analysts have in-depth knowledge of which types of data provide the most insight into consumer trends, and they require excellent communications and presentation skills in order to turn data analysis into effective marketing plans.

Education/Experience

Most market research analysts hold a bachelor’s degree in business, statistics, or one of the social sciences and have 1-3 years of related experience.

Senior Marketing Manager

The marketing manager is responsible for the creative and strategy aspects of the proximity marketing campaign. This role is also generally responsible for evaluating the success of different strategies and campaigns and must have the ability to garner consensus across all parts of the organization.

Education/Experience

Senior marketing managers will need to have broad-based experience working in many levels of different marketing projects. A minimum of a bachelor’s degree in marketing or communications is required, and some positions will require a master’s degree. Candidates for the position of senior manager of strategy will be expected to have at least 10 years of marketing experience.

How can a marketing school help you succeed in a company who uses proximity marketing strategies?

Excellent communication skills, in-depth knowledge of digital and interactive technology, and expertise in data analysis are all key attributes that companies are looking for when hiring employees to deploy proximity marketing strategies. The instruction and experience offered through a marketing program will provide a strong foundation in each of these areas.

Courses in basic marketing principles will teach marketing school students the essentials of crisp communications, as will the practical experience that comes with the project assignments and internships.

Marketing programs also provide their students with access to the latest technology in digital and interactive communications, as well as experts who teach students the programming language and technical details needed to craft successful digital and interactive marketing messages.

Statistics and data-analysis courses offered by marketing schools help round out the skill set needed to succeed in proximity marketing. This background allows the marketing professional to quickly gain insight into the effectiveness of a campaign, analyze its strengths and weaknesses, and isolate the messages or methods that need to be adjusted.

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