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Mobile Couponing: It's all about Location, Location, Location

Industry Marketing Manager - Communications, IBM

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If only my local ice cream shop had realized that I was half a world away when they sent me that SMS, I would not have been disgruntled. But, how could they have known? If my communications service provider (CSP) was using location-based service technology that recognized where I was, this annoyance could have been avoided. Conversely, if I was nearing the ice cream shop and that SMS appeared, you can bet I’d have an extra scoop with a cherry on top!

The illustration above is a real-life story (name of the ice cream shop has been changed to protect the innocent J) and highlights one of the biggest deficiencies in the current mobile marketing paradigm – it’s based on a subscriber’s static or home address location rather than their real-time location. To further complicate matters, marketing offers often do not consider subscribers’ recent digital behavior (for example, a recent mobile search, purchase of a song from iTunes, etc.). Rather, most offers are based on demographic profile for the subscriber, such as age, income, ethnicity, urban vs. suburban, etc. As subscribers get offers purely based on the location of their home base and their stale demographic profiles, they become increasingly less relevant and “offer fatigue” sets in. We have seen this first-hand with couponing sites, where initial excitement around local deals begins to wane until the deal emails and messages make their way into trash folders faster than you can say “delete”!

CSPs have a wealth of information about subscribers, including their preferences, likes and dislikes. Service providers are beginning to use geo-fencing technology, and when this is in place, subscribers can then specify if and when they want to receive mobile offers; for instance, while shopping at a mall but not while at work or visiting their child’s school.

There is a looming consumer concern, however, and it’s a valid one – privacy. Consumers want control over how their information is used. They want to be able to opt-in when they want offers or mobile coupons based on their location and their mobile search history, and opt-out when they don’t.

I was discussing this with a friend and he said, “I never want them to know my location or use it – ever!” He thought about that for a bit and realized that it’s not quite accurate. He frequently uses the Yelp app on his iPhone to look up restaurants and shops when he is on the move. And, while our families traveled to Napa recently, he looked up directions as we were sampling the delightful boutique wineries of Napa. We found a highly rated Italian restaurant with Google Maps – all of this using our current location. The reason why my friend and I were comfortable is that we were asked whether to use our current location for search and we opted-in to allow it.  

To overcome the “holding back” by consumers regarding wide-spread use of real-time location, mobile search history and other digital behavior, service providers must invest in solutions that enable granular opt-in policies that will put the subscriber in control so they can receive offers when and how they want to them and turn off the spigot when they don’t.

Capturing and using location data requires tools that are capable of handling large volumes of data at high velocity. When location data is tied to individual subscribers, other technical challenges are introduced as telecommunications companies need to give subscribers a way to opt-in to share their location data and to specify the types of offers they want to receive. Since CSPs have tens of millions or hundreds of millions of subscribers, managing and honoring consumer preferences can be an extremely complex task.

Location-based mobile services and intelligent marketing campaigns utilize big data analytics to improve the results of marketing promotions, increase revenue and help to prevent customer churn. In seconds, a subscriber’s usage profile, billing data and past responses to offers can be analyzed to create targeted promotions that customers are more likely to accept.

Granular opt-in policies, combined with the use of geo-fencing technology, will delight subscribers with relevant, timely offers, avoid the “offer fatigue” and add new revenue streams for service providers and their advertisers – a win-win for everyone!

IBM offers a full range of big data analytics products and services for telecommunications companies that wish to advance their data analytics initiatives tied to location-based services.

To learn more about IBM solutions for CSPs, please read Big Data Analytics for Communications Service Providers. There is also a webinar that might interest you titled Game Changers for Telco hosted by Light Reading.

I am heading out to the mall now with my mobile app set to opt-in for my favorite stores. I think I need the app that stops me when I reach my budget limit!