Grow Market Lead
Connecting
with
customers
BY JACK MACKEY
The Power of Where
Location analytics boosts customer visits
D
o you know how often
consumers pass by your
competitors’ locations to
visit you? Wouldn’t it be
great to know where and when consumers bypass your stores or restaurants to
visit a competitor? Think about how
much it would help to also know the
why behind this consumer behavior. In
2014, you can gain this new knowledge
about your customers to get a competitive edge.
Three converging trends enable
you to better understand your current
customers, and even to connect with
non-customers you want to attract.
First, a huge and ever-growing number of consumers carry smartphones
with built-in global positioning systems (GPS). Second, many of them
are willing to share their GPS data
in exchange for a reward from retail
or restaurant operators. Third is the
emergence of the new marketing science of location analytics.
Location analytics means capturing
massive amounts of GPS data from consumers who have opted in to share this
information and processing that “big
data” over time. This allows executives
to understand which stores or restaurants people go to and which ones they
drive past, how often they visit specific
brands, and how much time they spend
in each location. With this new business
intelligence, you can make adjustments
in marketing and operations to capture
more customer visits for your brand.
Why customers share
You might wonder why consumers
would voluntarily share their GPS
data. The answer is simple: they get
free stuff! Here’s how it works. Shortly
after visiting a store or restaurant that
is being researched, customers receive
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Franchiseupdate ISS U E I, 2 0 1 4
a very short survey delivered to their
smartphone asking why they chose to
visit that location and what kind of experience they had.
In exchange for answering the survey,
the customer gets a reward. It might be
a free item or discount on their return
visit, or points towards a gift card. And
by providing survey respondents with
a bounceback offer, mobile surveys can
even drive incremental traffic and sales.
Location analytics
help you understand
customers’ actual
shopping and dining
behavior, and the
mobile surveys tell
you why.
This is advanced business intelligence that has not been available before.
Though I do not have permission to
name them here, several dozen franchise organizations are early adopters
of this new research approach. I hope to
provide a named case study in a future
column; or check smg.com/research
for the latest information.
Better than memory
Before 2013, market researchers had
to ask people to remember where they
shopped and dined, and how often.
Executives had to rely on consumerreported information to estimate their
brands’ percentage of visits or share of
wallet. In contrast, the GPS data from
consumer smartphones represents actual consumer behavior that is collected
in real time, which is far more accurate
and reliable.
For example, restaurant and convenience store companies can know their
actual share of customer visits and compare that with specific, named competitors. They can see how this share changes
as new marketing initiatives are tested.
Retailers get an additional advantage:
they can know what percentage of their
shoppers didn’t buy all they intended,
why not, and if those non-purchasers
went to a competitor or online to make
that purchase. That’s another reason
the use of location analytics and GPStriggered mobile surveys is taking off.
In 2014, companies can get very specific data showing how many of their
brand’s customers are shared with specific
competitors. Executives can understand
their actual visit share, and gain insight
into why they have that frequency of visit
versus rivals. For example, you can ask
customers about their trip motivation,
“Why did you choose to visit [brand
name] today?” Was it convenience of
location? Advertising? Having a coupon?
By aggregating thousands of customer
responses, you can see the differences
in trip motivations between your customers and those of your competitors.
A “previous positive experience” is
one of the most telling responses to
the question about the reason for visiting a multi-unit company. This means
executives can also see how their locations perform against their rivals on
customer satisfaction. Although most
franchisors have a customer experience measurement program in place,
visibility into the customer experience
offered by named competitors provides
an edge in separating your brand from
the competition. External benchmarks
like these are crucial because success in
the market depends on your performance
relative to your competitors.
Location analytics shows you clearly
how much business is out there for the
taking and helps you determine how to
win customer visits from your rivals. n
SMG Vice President Jack Mackey helps
multi-unit operators improve customer
loyalty and drive growth. Contact him
at 816-448-4556 or [email protected].