Eight Questions Marketers Should Ask Before Starting a Location-based Effort

Location-based services are exciting. People are actively running around the U.S. checking into places with their mobile phones and saying, "Market to me."

LBS promises a unique ability to connect with a broad range of people who are displaying intent (to purchase, attend, dine, travel, etc.), but with some very distinct parameters. It is the ultimate in permission-based marketing. But before marketers and agencies check in to an LBS strategy, here are eight questions to ask first.

Does LBS in general fit the brand's marketing objectives?

Right now, most of LBS is in a highly developmental stage. Consumers are getting used to the services and their behavior now may very well change when the services move beyond early adopters. Marketers will certainly learn from test programs, but these programs as of yet are not likely to impact a broad range of consumers. Set realistic brand objectives in regard to LBS tactics. Good PR and educating oneself may be the most achievable objectives at the moment.

Does the LBS service you choose fit your target audience?

Some LBS skew very distinctly to male early adopters. If you are selling skin cream, does LBS really make sense right now? Meanwhile, if you're eager to reach tech-savvy, social networking junkies, LBS check-in features can work brilliantly.

How does location relate to and enhance your brand?

Is your product one that relates to specific places? Do people like to use it when doing activities that relate to places? There are fascinating ways in which place can trigger response. Think about what these places may be and how you are going to activate based on them.

Does it scale?

Many of these services are limited to the iPhone and iTouch, which combined reach only about 8% of the population. Factor down the number of people who want LBS apps and you can see they are hardly likely to make the cash register ring. If scale is your goal, consider simpler things like using location to target specific audiences, or for a location-triggered SMS program that can reach all your interested customers on any type of device. Location does not have to be activated via an app or a check-in. There is a range of location-aware mobile sites that make sense, including those focused on movies, weather and restaurants.

What is your measurement strategy?

If PR and company education are the goals, assess impact accordingly. For some of these services, you may be asked to measure success in terms of activities like number of check-ins, product scans, or awards of branded virtual goods. Determine what each should mean to the brand. (One LBS exec offered an example of a healthcare company rewarding people with virtual broccoli. How do you determine the relationship of a piece of code made to look like the first President Bush's least-favorite vegetable to brand loyalty or sales?) How about brand-impact studies for brand-related games? SMS programs can be tied into CRM programs, messaging strategies optimized on the fly, etc. I have seen examples from developing countries with complete SAS back-ends. Do not use "It's mobile, it's new" as an excuse for not having a measurement strategy.

If you're using LBS for more traditional promotions such as coupons, are you rewarding your most valuable customers or merely incenting budget hounds?

Are those who act on these promotions coming back? Groupon has been in the news of late for more than its funding. Retailers grouse that once given a deep discount, consumers always expect it—and if they don't, they won't come back. Reports of loyal customers feeling unappreciated have also surfaced—say, when they can't get their regular mani-pedis because their favorite salon is packed with Groupon devotees.

Do you fully understand the privacy implications?

LBS can be one-to-one marketing—but only for those who say "yes." Are you working with LBS partners who are fully privacy compliant?

Are your prepared to market what you're doing with LBS?

The reach of LBS services at this point is very low. Your brand can be a part of building these valuable activities. There are many vehicles that can be used for activation, so why not make LBS part of your larger campaign strategy? Offer activation via in-store signage, out-of-home, print—even tag it in a TV campaign. Remember when the advertiser's URL started to become a familiar element of television and print creative? Why not invite customers to engage with your LBS partners through your national marketing?