New location-based mobile services enhance marketing and customer experience

Mobile devices are forever changing the way consumers make calls and surf the Internet, as well as the way brands market to their customers. Consumers are relying on these devices while on-the-go, and franchisors and franchisees can use information about a customer’s location to send better-targeted marketing offers or to better tailor their customer service.

Two new technologies in particular are turning mobile location into a magic formula for franchisor success: Hyperlocal marketing (using a smartphone’s exact location to send targeted offers when a customer crosses a proximity threshold) and mobile location routing (using any cell phone’s location to direct him or her to the nearest franchise location).

Hyperlocal marketing requires the use of GPS and a mobile app on a smartphone to send targeted messages from near a franchise or even from within a franchise. Mobile location routing extends these technologies to virtually all cell phones, not just smartphones. Here’s a short primer on these two technologies as well as suggestions for determining which is best for your business.

Going hyperlocal

There are many complicated definitions of hyperlocal marketing, but it really boils down to a simple concept – marketing around a small, specific area, such as a neighborhood, a home, or a business. In the case of a franchisor, hyperlocal would be considered the proximity around a specific franchise location or territory. The oldest form of hyperlocal marketing is hanging a sign in front of a store, attempting to target customers passing by.

While the concept of hyperlocal marketing is not new, the technology which marketers use to reach local markets is. That’s where geofencing – a related term -- comes into play. Geofencing involves setting up a virtual perimeter around a specific location. Using mobile applications that leverage the GPS technology present in most smartphones, geofencing technology can track when customers enter a defined area close to a business, or even different areas within a business location, such as the shoe department of a retail store.

Combining the concepts of hyperlocal marketing and geofencing opens up a new world for marketers. If franchisors set up specific perimeters around their franchise locations and employ geofencing technology, they can send specific mobile coupons and offers to customers when they enter a predetermined proximity, say ¼ mile, provided these customers have opted-in to receive offers via their mobile phones (via mobile app or SMS messaging). This is especially relevant for restaurants and retailers (think coupons sent to customers driving or walking by at lunchtime, or stimulating impulse buying as someone drives by a storefront while running errands). The specifics of the proximity thresholds and the offers made are tailored to match individual business models.

Mobile location routing

Georouting – or sending incoming calls directly to the right franchisee rather than through a call center – has been around for several years and has greatly improved the workflow and customer experience for many franchise organizations. But cell phone callers have typically been a challenge.

Unlike for landlines, there is no national directory that covers mobile numbers, so routing services typically have less information to use to identify a caller’s home or business location, much less to determine his or her actual location and route him or her to the nearest store. And, of course, a cell phone is usually not where the billing address is anyway.

In the past, this problem was usually addressed by prompting the caller through an Interactive Voice Response (IVR) system for more information, such as a zip code. If the caller enabled the GPS feature on his or her mobile phone, the job became easier with mobile apps. But, with number portability and the conversion of landline phone numbers to mobile devices, people can carry existing numbers to different places, and cell phone calls can still end up at the wrong franchise location.

Just this year, a new technology has become available in the United States to fix this problem. It’s called mobile location routing, and it allows cell phone callers to be routed to the nearest franchise based upon their actual location, just like landlines. And because it does not depend on GPS technology or a mobile app, it will work on any cell phone -- not just smartphones.

Here’s how it works:

When customers initiate calls, they must opt-in to have their location identified. This can be easily done through an IVR prompt, such as “Press 1 or stay on the line to be directed to the nearest store based upon your current location.” If appropriate, additional options can be provided to allow a caller to enter a zip code or other information.
Next, the actual location of the caller is determined by triangulation off the cell phone towers in real time to make a call routing decision.
Then, the call is routed directly to the most appropriate franchisee, based on previously established parameters such as franchise territories, mileage extensions, drive times, or other factors.

Routing mobile callers to the nearest brick-and-mortar location is incredibly useful, but what happens when both callers and franchisees are mobile? This same mobile location technology can also identify the nearest location of a service provider that is not fixed to a brick-and-mortar location and route mobile callers accordingly. The best example of this might be providing roadside service when both the caller’s and the service provider’s locations are not fixed by their phone numbers.

Which is best for you?

In determining which location-based service is right for your franchise, ask yourself two basic questions:

What percent of your customers are using cell phones vs. smartphones?
Does your brand have a mobile app, or will it have one soon?

If your brand already has a mobile app that’s well used by your customers, chances are most of your customers have smartphones and can use them effectively. If that’s the case, hyperlocal marketing and geofencing are likely the best bets. You can investigate adding a geofencing capability to your existing mobile app and targeting customers when they’re close by.

If, on the other hand, most of your customers use basic cell phones (also called feature phones) rather than smartphones, you probably need a good routing solution to get these callers where they need to go, but you’ve probably not seen justification for investing in a mobile app. In that case, mobile location routing would be the best choice for your business.

Of course, some brands with a wide variety of customers might choose to employ both technologies, leveraging their mobile app, GPS technology, and geofencing to reach smartphone customers while relying on mobile location routing to properly route cell phone callers. Regardless of which mix is best for your organization, using information about a customer’s location is a great way to improve both marketing efforts and customer experience.

Charles Austin

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Published in Franchising World - October 2013