Three out of Four Beacon Programs Will Fail: Here's Why
Businesses of all kinds -- from worldwide department stores to neighborhood shopping districts, international airports to baseball fields -- are adopting beacons at a pretty incredible pace. From all-door rollouts to smaller test pilots, companies are very bullish on beacons. As they should be. The devices offer a way to connect with consumers unlike ever before in-store, when it's relevant to their immediate location. To personally welcome individuals as they arrive. To disseminate important or motivating content. To gather unique insights into on-premise customer behavior. And the beacons themselves are available at such a low cost that adding multiple devices to hundreds of stores is not out of the question.
But, as with most shiny objects, beacons will be abused. In fact, I predict that three out of every four beacon programs will fail in 2015. Companies will get caught up in the hype, glitz and possibilities. Beacons will be treated as a hammer looking for a nail; marketers will try to fit beacons everywhere they can. The principles that should guide any marketing effort of this sort will be forgotten.
Here are the six biggest ways that beacons will be misused:
1. Not accounting for who a person is, beyond where they are standing. Most brands will not personalize any message beyond where a person is standing. For instance, if Nathan has paused in front of women's perfume, he would get the offer enabled by the display's beacon -- completely missing out on the fact that he has no interest in purchasing a new fragrance. Contextualization (what is going on around someone and their intent) and personalization will be ignored in many first-generation beacon programs. Nathan should only get alerts for products he would be interested in buying today and in the departments he is likely to be shopping. Unless, that is, it's the week of Valentine's Day and he is shopping for his wife.
2. Creating yet another silo of customer data. Marketers are inundated with customer data from many divergent sources -- email, transactional, CRM, social, mobile, etc. By implementing point solutions for beacons, marketers will create yet another silo of customer data. As personalization across the entire customer journey becomes critical to the consumer experience, brands must set up a system that breaks silos of customer data.
3. Not setting limits on frequency. As an increasing number of companies implement beacons, and larger stores place several around a store, limiting the number of messages a person receives will be key. Imagine walking through the mall or down 5th Avenue and getting pinged every five steps (no thanks). There will be a (short) time when people will be over-targeted. It'll be brief because people will turn Bluetooth off immediately. Brands will need to set proper rules of engagement -- for instance, only triggering an interaction if someone has been in front of a display for over a certain amount of time -- and not just passing through. Multiple brands that are using the same core app, say multiple stores within a single mall, should implement a bidding system to target high spenders, while setting strict messaging limits.
4. Getting stuck in the perpetual offer cycle. Offers are not the only things that motivate consumers. And if beacons go the way of other marketing channels (i.e. email), I'm afraid they will fall flat. We all have Groupon-fatigue, no longer motivated by simply getting a "steal." Unlike doing a mass deletion of the Google Promotions folder, consumers will simply opt-out if they are getting hit with 5%-off deals at every turn. Depending on the nature of the product and the customer herself, she might be motivated by the following: a celebrity endorsement, a scientific study, a most popular or trending status, an "as seen on TV" offer, peer reviews and rankings, media articles, etc. Tap into whatever earned media and resources you have to help people in their buying decisions in the moment as these may just be more motivating than a small discount.
5. Privacy concerns and a lack of transparency. As we recently saw with the secret placement of beacons on Manhattan's payphones, many brands will not clearly communicate to their customers how they are using data they are collecting (which should only be for providing a better user experience). Being transparent is core to any digital marketing program, and beacons are no different. As a society, we have a growing paranoia of being tracked, and with a beacon pinging me based on where I am, this fear will certainly heighten unless consumers are properly educated, which leads me to my final point.
6. Lack of education. People have proven that they are willing to open their personal data floodgates in exchange for more personalized experiences or offers. While Bluetooth is automatically turned on in the iPhone 6 and 6 Plus, users of earlier version holders will have to manually turn on Bluetooth for beacons to interact with their devices. Marketers need to clearly explain what benefits consumers will get for opt-ing in to push alerts and turning/keeping on Bluetooth.
Beacons are an amazing technology and have the potential to eliminate friction in the customer journey and change the on-premise experience more than anything since the smartphone. However, there is a bit of a Gold Rush going on -- with brands of all sizes eager to try beacons out. I applaud the innovation, but warn brands to not get ahead of themselves and ensure a cross-channel strategy is in place to provide an experience customers will not only appreciate, but seek out and talk about.