Wherever you go, you find the same picture of people staring into their smartphones and paying little or no attention to what's going on around them.
Well, that’s the main problem marketers are facing to get customers to pay attention to their products and services.
Location-based marketing and proximity marketing can help here, which is why we want to summarize quickly what exactly these frequently cited terms mean and what similarities and differences they have.
If you enter "location-based marketing" into any Internet search, you get a multitude of definitions. In short, however, location-based marketing is all about using the customer's mobile usage situation (especially the location) for marketing purposes to communicate location-based services and information on offers via the mobile device within a certain predefined trading area. Clearly, the goal is to reach the right person at the right place, which needs as a prerequisite that the customer has activated the GPS function on his device.
The term geofencing is inextricably linked with the topic of location-based marketing. In geofencing, an "invisible fence", for instance, in the form of a W-LAN network, is built around a certain area, and when the customer enters this area, he is recorded by the company's geofencing system.
Location-based marketing is particularly suitable for companies that want to promote their products or services within a larger area. Take a restaurant as an example that wants to send out a coupon to people within a certain radius. However, to be able to operate truly personalized communication, “proximity” is the key to success.
Proximity marketing can be understood as a more profound form of location-based marketing, as it is possible to locate the customer more precisely, allowing to play out content in an even more targeted manner than possible with classic location-based marketing. This makes it possible for a retailer, for example, to reach customers who are just passing by their own shop. The most common technologies used in this form of marketing are Bluetooth Low Energy (BLE) beacons, Near Field Communication (NFC) and Wi-Fi.
Differences and similarities
The main difference between location-based marketing and proximity marketing lies in the fact that proximity marketing works on a more granular level. While location-based marketing can cover entire areas with an accuracy of approx. 50 meters, proximity marketing is, for example, more likely to be carried out at the shop level in department stores.
Which form of marketing is more suitable for a company depends on whether you want to interact with the customer within a larger area or whether you need more detailed customer information, for example, to find out how long the customer looks at a certain product.
At the end of the day, both forms of marketing are considering the customer's location as one of the most important information and triggers in customer-centric marketing and service communication to counteract the customer's increasingly dwindling attention.