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Exploring the hyperlocal opportunity for superior customer engagement

By Eric Harber

Among the fastest growing mobile trends this year, hyperlocal advertising and marketing has the potential for businesses to engage with customers at the optimum time and place.

Still in its nascent stage, there are, however, misconceptions that exist with hyperlocal, so it is critical for businesses to become savvy before making a decision whether to proceed.

The catalysts behind the hyperlocal trend fall into two camps.

First is the continued maturation of technologies, namely those capable of delivering marketers the information they need to determine a consumer’s precise location.

Today there are multiple categories of information that businesses like our client Arby’s can tap into including:

• Derived information (mobile phone number, area code, etcetera)
• Declared information (registration process, hotel check-ins, VIP clubs)
• Network initiated information (triangulation, carrier, Wi-Fi, hot spot)
• GPS information (iPhone, Android, BlackBerry, Symbian, Windows Mobile)

Second is the fact that consumers have voiced an interest in locally-driven communications.

In fact, according to the Mobile Marketing Association (MMA), half of mobile users who noticed any ads while using location-based services took action.

The MMA also found that most mobile users are “interested in allowing their phone to automatically share their location in exchange for perks, such as free use of mobile applications and mobile coupons.”

These are meaningful numbers which clearly demonstrate why a growing number of brands are looking to latch on to this trend.

With these figures in mind, the temptation to jump into the hyperlocal waters is high. However, before taking action, marketers are advised to first run through a quick hyperlocal marketing check list. Key points include:

Is hyperlocal suitable for your business?
Determine if your business has a large enough customer base to warrant such an investment.

For a brand such as Starbucks, hyperlocal makes a lot of sense but for many other businesses the hyperlocal investment may not be worthwhile.

Hyperlocal is best suited for businesses trying to move products that have value but also a limited shelf-life. A good example would be a flower chain looking to unload the remainder of their summer flowers for a nice discount or a supermarket needing to move its salmon before the fish goes bad. Businesses also must have real-time, 24/7 visibility into inventory.

Assessing the competitive landscape
Conducting frequent competitor assessments is a classic business exercise that remains essential today.

Look at what your competitors are doing.

Have they already deployed a hyperlocal campaign?

If so, chances are they are grabbing your customers right now.

For example, if coffee chain A is offering 50 percent off a latte to local area customers, why wouldn’t it break their commitment to coffee chain B? This is especially important if your product can be viewed as somewhat of a commodity.

If your competitors are already there, you need to move now. If they have not taken action, you have an opportunity to be the first to the punch.

Trust is essential
Consumer trust is critical to the success of any business and nowhere is a potential violation of this confidence more precarious than with a hyperlocal campaign.

The most common perception is that a hyperlocal campaign consists of businesses firing off marketing offers to a consumer’s mobile device willy-nilly whenever they pass their store.

In fact, many industry pundits believe that hyperlocal won’t arrive until that model hits the mainstream.

However, the truth is really quite the opposite.

Relevance and control are pivotal.

Consumers do not want to be inundated by brands every time they pass their local Starbucks.

Your customers are interested in receiving locally relevant ads on their terms.

Hyperlocal is about creating a community experience for the consumer that is relevant within their area, whether it is where they work or live, or both.

Within this community, brands should develop an intelligent hyperlocal campaign that has a cadence, delivering relevant messages to consumers perhaps twice a month rather than every few hours.

Understanding your customer
While attracting new customers is essential for the livelihood of any business, the hyperlocal effort is really best suited for your current customers.

If you are ultimately looking to strengthen your customer’s commitment to your brand, then hyperlocal is for you.

Approach these customers with the opportunity to opt-in to your hyperlocal community.

For those who reciprocate, you then have the opportunity to present them with attractive offers on a consistent, albeit infrequent basis. In doing so, businesses will be able to cultivate more frequent repeat visits.

BIA/Kelsey’s 2010 U.S. Local Media Forecast predicts that local advertising revenues will exceed $2 billion by 2014. As the focus on local continues to mount, a growing number of businesses will be faced with the hyperlocal question. Examining the details above should help these businesses determine if it’s the right path for them.

Eric Harber, president and chief operating officer, Hipcricket. Reach him at [email protected].