Commentary: Building a proximity marketing strategy that protects customers
By Alex Romanov, CEO, iSIGN Media
Proximity marketing — the distribution of marketing messages via location-based technologies — is poised to radically change the way retailers drive sales. Given the highly mobile nature of our current culture, with hundreds of millions of consumers using smartphones, as well as an increasing focus on rich media messaging, the rise of proximity marketing was perhaps inevitable.
However, the strategies merchants and advertisers choose to implement their proximity marketing initiatives will have a profound effect on consumer attitudes and retailer ROI. Consumers are wary — and rightly so — of any attempt to use their personal information to gather data and sell products.
Recent high-profile stories about major corporations collecting IP-based data and using SMS messaging technology to contact consumers and compile sensitive personal information have increased consumer concern and inspired new legislation to protect privacy. Additionally, well-known companies have been compelled to pay multimillion-dollar fines for violating consumer privacy, which hurts the companies' bottom-line results and their brand equity.
Fortunately, there's a way to take advantage of all proximity marketing has to offer while protecting consumer privacy. A truly successful proximity marketing strategy ensures that retailers drive sales and gather consumer insights in a way that protects sensitive data. The valuable metrics gained from proximity marketing can be obtained without collecting private information, and it's up to merchants to make sure they build a strategy that puts consumer privacy first.
A proximity marketing strategy based on Bluetooth technology is a great way to drive sales, generate priceless consumer insights and protect consumer anonymity. That's because Bluetooth broadcasting standards have built-in consumer protections. Bluetooth is unique in that it broadcasts to smartphones within range and transmits information between the smartphone user and broadcast source without collecting personal information such as names and phone numbers. Instead, Bluetooth uses hardware identifiers from the smartphone.
Bluetooth is a trusted tool that is widely deployed on smartphones and that consumers frequently use for a variety of purposes, knowing that their personal information will not be compromised. In a proximity marketing strategy, it could be deployed as follows:
- The retailer sets up a device to broadcast messages via Bluetooth to consumers within proximity of their store or store section.
- When customers with Bluetooth-enabled smartphones come within range, the broadcasting device sends a messaging asking if the recipient wants more information on a special offer.
- Consumers who opt-in then receive rich media messages from the retailer; messages can be as simple as an electronic coupon or as elaborate as an interactive game.
The opt-in feature is important because it gives consumers a real sense of control. For the retailer, the consumer's decision to opt-in means the retailer is reaching an audience that is highly likely to make a purchase. Research shows that when customers receive an offer on products or services within their immediate proximity, they are much more likely to respond positively. An IBM study demonstrated that 72 percent of customers will respond to an offer when they are within sight of the product or service being sold — an undreamed of response rate to those whose previous marketing efforts were confined to traditionally low-response strategies such as direct mail!
With a Bluetooth-powered strategy, retailers can take advantage of the potential of proximity marketing while ensuring that consumer anonymity is 100 percent protected. No data like names or phone numbers is ever harvested from the phone since the technology relies on hardware signatures only. That means consumers can use it with confidence knowing that their personal information won't be transmitted or stored, making an opt-in response that much more likely.
It's also important to note that, although retailers who build a proximity marketing strategy centered on protecting consumer privacy won't obtain personal data on their customers, they nonetheless receive amazing insights into their customer base. Without collecting personal information, their proximity marketing device can still provide data on customer interests, response rates and more — all in real time. This allows retailers to examine trends and hone their messaging to more effectively target their audiences.
The key is to build a proximity marketing strategy that includes customer privacy protection in the core of the technology rather than creating an approach and then trying to safeguard privacy on the back end. With a well-designed proximity marketing program, retailers can drive ROI, gain valuable consumer insights and protect consumer privacy as well as their brand.
Alex Romanov is CEO of iSIGN Media, a North American multiplatform advertising solutions company that utilizes Bluetooth, mobile, Wi-Fi and location-aware technologies to deliver rich media, permission-based messages. (Photo by Ed Yourdon.)