SPOTLIGHT Location data is disrupting the way companies are looking at their consumers. Right from targeting marketing to identifying the next outbreak of crime, both private and public sector organisations are using the power of location data to derive insights and take very specific actions. Here, Mu Sigma's location based service (LBS) experts, Vibhav Agarwal and Saumil Agrawal, look at how marketers can work closely with mobile operators to use location data to engage more effectively with their customers in real time.
Location data is disrupting the way companies look at their customers, but marketers still have a lot to learn when it comes to using location data more effectively.
Early experiences with Apple's new iBeacons have, yet again, underlined the value of location-based marketing. A food brand from the US, called Hillshire,reportedly increased purchase intent for one of its sausage brands by a factor of 20 with iBeacon alerts to grocery shoppers [9To5Mac].
However,a 2013 study by Oxygen8 Group showed that 42% of UK consumers did not feelanymarketing communications they received on their mobile devices were relevant. A further 44% found less than a quarter of messages useful. This suggests that the bulk of mobile marketing is ineffective, and that companies are not realising the full potential of social, mobile and local marketing.
To truly reap the benefits of location data, organisations need to get the data itself, the scope and the people and technology factors right.
Marrying up the right data
The widespread usage of mobile devices – smartphones, tablets and phablets – has made it easier to gather and access users' location data through technologies such as GPS, Wi-Fi and base station triangulation.
Sources include social media channels such as Facebook, Foursquare and Check-in, which allow consumers to identify their location. The Internet of Things is increasingly contributing to the variety and volume of location data being generated. Current examples of this include satellite navigation apps and systems, wearable devices such as Google Glass and Nike' Fuel Band and other sensor-based applications. Also, telecom service providers track the location of users within a wireless network using Internet-aided geographic information systems (GIS) from mobile devices and GPS-enabled vehicles.
While there is an ever-expanding pool of location data for marketers to delve into, knowing where your customers are and how they move is of limited use on its own. The true capabilities of location data can be realised only when it is married with other data sources and turned into actionable insights.
Creating warm selling opportunities
By working closely with telecom companies and lifting location data from sources such as mobile devices and social media, and using them in tandem with retail point-of-sale and demographic data, for example, marketers stand to gain several advantages.
They can profile their customers more deeply, monitor them more closely and in real time, and on this basis, predict their behaviour more accurately.This in turn will help improve the customer experience through much more targeted, personalised and immediate approaches.
This means whatever they offer is likely to be much more relevant to the recipients than any number of generic mobile or email marketing tactics. The result may be a sales conversion in the short term, but more importantly it could be a stepping stone towards a more lasting relationship with the customer.
Furthermore, location data can help identify and connect with existing customers' immediate peer groups exhibiting similar buying habits.Ultimately, it is all about staying relevant at all times by providing the right customer with the right offers at the right time and in the right way.
Getting the mix right
Clearly, data integration is key to profiling customers extensively by closely monitoring and predicting their behaviour. That said, companies equally need to ensure that the underlying technology and analytics methods are sustainable in the long run.
The enormous amount and variety of data generated over time could easily become overwhelming.Scalable systems forcollecting, storing, processing and enriching this data for analytics need to be deployed to meet current and future requirements.
Furthermore,a wide variety of techniques such as machine learning, text analytics and predictive modelling, can be put in place to extract meaningful information from location data.
Last but not least, it is critical to take the people element into account. Organisations require skilled professionals with the technical know-how and the necessary business acumen to extract strategically relevant insights from the available data.
Realising the potential
You could say that realising the true potential of Big Data will be down to this ‘man-machine' combination and to establishing a culture of data-driven decision making throughout the company and its supply chain.
When it comes to the power of location-based analytics, marketers have only just begun to scratch the surface of what is possible. In future,cross-pollination of ideas across a wide number of industrieswill lead to location data being applied for an ever-expanding variety of purposes ranging from incident prevention and personal security to delivery services, traffic management andcrime analysis.
MuSigmaspecialises in decision sciences. Its 3,500 decision scientists are helping more than 140 of the Fortune 500 companies transform their corporate decision making, includingsix of the world's top ten telecom and mobile operators as well as with leading retail, banking, media and technology brands.