A surge in smartphone and Internet use has changed the way companies connect with consumers in a huge way: businesses can now gather an unprecedented amount of data on their customers from a greater number of sources and at a faster rate than ever before. For marketers, this means that gone are the days of generic marketing communications and offers across disparate channels — consumers now want, and expect, personalized customer communications. But how much personalization is too much?
Social, Local and Mobile (SoLoMo) marketing is the inevitable product of this changing landscape. Combining the power of social media and the precision of location-based mobile marketing, SoLoMo makes targeted marketing more accurate and effective than ever. Fed by big data, SoLoMo can track consumer behavior based on a customer’s location, social media habits and purchasing history, and offer them relevant communications and offers in real-time. However, companies need to be careful about the amount of contact they have with their customers through this channel.
Traditionally, consumers have been in control of how and when they receive marketing offers from companies, and making the assumption that all customers are ready to take the plunge into SoLoMo marketing is a huge mistake. This is confirmed by research findings from GI Insight, which have highlighted that this channel needs to be treated with caution as not all customers are comfortable with the level of data sharing that targeted, location-based mobile marketing entails.
Getting SoLoMo right
GI Insight’s latest whitepaper, Harnessing the Power of SoLoMo, investigates whether it is worth investing in the SoLoMo trend, analyzing survey responses from 1,000-plus consumers to gauge the levels of communication they are comfortable with. The report highlights a key message: a huge majority of consumers (70%) were only willing to receive location-based mobile marketing messages if they had given a company direct permission to do so. The same amount said they would immediately unsubscribe from a mailing list if an unfamiliar company started communicating with them in this manner. Furthermore, 60% of respondents were only willing to receive SoLoMo marketing messages, and be likely to act on them, if they had long-standing ties with the company in question, such as membership of its loyalty scheme — highlighting the importance of strong customer/business bonds in effective SoLoMo marketing. A significant 80% said they would not welcome these messages from any company at all without a prior relationship in place.
This illustrates that while consumers are happy to “check-in” to various locations through social media and search for local services via mobile, there have to be some boundaries in place. The vast majority of customers are unhappy with the prospect of being targeted with unsolicited mobile marketing, so any business that sends out unsolicited location-based marketing messages risks both its reputation and its customers. Moreover, the findings indicate that what really matters to customers is having a good relationship with the company beforehand; only then are many happy to receive and act upon targeted mobile-based marketing offers.
The weak link in SoLoMo
While social media has become an indispensable channel for personal communications, the research reveals that consumers largely do not welcome receiving location-based marketing through social networks. The consumers questioned were far more likely to take part in an offer from a company if it came from them directly, rather than via a social network, with less than one-quarter of respondents (22%) saying they would be more likely to take up location-based mobile offers received through a social networking site.
On the other hand, an impressive 59% of respondents said they would be more likely to act on a local mobile marketing offer from a company whose loyalty program they belong to — illustrating the fact that loyalty schemes and SoLoMo marketing can, and should, go hand in hand when it comes to strengthening customer relationships. This is because the information captured through a loyalty program can reveal telling insights into customer behavior and spending habits, enabling marketers to create tailored and relevant offers that show the customer the company is using their data wisely.
Trust in the brand is therefore the key link for consumers — it is far more important than a social networking platform, as it is this trust in the brand that forms the good relationship between customer and company that makes SoLoMo work.
Can SoLoMo work for every business?
There are many aspects of this exciting new marketing development that businesses should already be adopting, but the research also highlights some key warning signs. The findings make clear the pivotal importance of having a good relationship with the customer prior to embarking on SoLoMo marketing activities, as without this companies risk alienating both potential and existing buyers. One of the most effective ways of laying the groundwork for successful SoLoMo campaigns is through a loyalty program, which enables a company to collect the necessary data and evaluate it effectively in order to tailor the right communications to the right customer.
This allows businesses to use customer intelligence to offer tailored, targeted and relevant promotions that reflect what a particular customer needs, when he or she needs it. This in turn helps build a deeper bond between company and customer: the customer is pleased that they aren’t being bombarded with irrelevant offers, and the company does not waste time and resources sending the wrong message to its customers.
Using personal data to tailor and time mobile communications to individual customers beyond just getting the locality right plays an enormous role in engaging people and encouraging response. Consumers want to see a level of understanding and personalization when it comes to targeted marketing, otherwise it is no better than unsolicited junk mail. The companies that pick up on the right data and use it thoughtfully to tailor offers and deals to each individual shows a level of customer intelligence that doesn’t go unnoticed by consumers.
So, while SoLoMo can work with large segments of customers, it is important to bear in mind that there is not a one-size-fits-all option. To adopt a uniform approach would alienate a vast amount of customers thanks to the fact that many simply aren’t ready for the level of communication that comes with SoLoMo. Start by building strong customer relationships and you’ll find SoLoMo can become a powerful marketing tool.
— Andy Wood is the Managing Director for GI Insight (www.gi-solutionsgroup.com/gi-insight), a company that is focused on helping you understand your customer’s behavior and using this knowledge to tailor your marketing communications to boost response rates and return on investment.