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What Starbucks Can Teach You About Location-based Marketing

Many companies have the issue of reaching the correct audience intended for their message. However, Starbucks has joined forces with the mobile network O2 and has come up with a way to target exactly who they want at the ideal time. With this new idea, customers can opt-in to receive discounts and coupons to Starbucks whenever they are near a store using current GPS technology.

This idea can be especially important and useful for other business across the country. The article gives the example of a restaurant sending out discounts during or around the lunch hour to generate revenue and sales. Also, retail stores could benefit by sending out promotional deals to nearby customers during off-peak hours.

One issue with this project is the price. It is extremely expensive and many small businesses would not be able to afford it. However, if popularity increases and more businesses invest, then the price is likely to decrease rapidly. There are other geo-targeting methods to choose from, however, that are must less expensive. For example:

  • Foursquare
  • Facebook Places
  • Gowalla
  • Brightkite

Also, another problem with this innovative technology is repetitiveness. Think about how many Starbucks a customer passes on a daily basis. It could be anywhere from one to 20; do you think a customer wants to receive that many texts in one day? Although O2 already thought of this potential issue and installed a preference tab when signing up. This way, a user can limit the amount of texts per day and even limit them down to just one store.

Overall, this new and advanced location-based marketing strategy is beneficial to customers and could change the way businesses market and advertise.