Article

Location-based marketing: Why QSRs should get on-board

Thanks to built-in GPS capabilities, smartphones have the ability to determine a user's location, and restaurants are learning to use that to reach their customers through notifications, which ultimately increases their bottom lines.

November 12, 2015 by Travis Wagoner — Editor, Networld Media Group

Marketers are using innovative ways to engage their customers using technology built into today's mobile devices. Thanks to built-in GPS capabilities, smartphones have the ability to determine a user's location, and restaurants are learning to use that to reach their customers through notifications, which ultimately increases their bottom lines.

Consumer behavior and expectations have changed over the past two years as smartphones have gotten smarter. As a result, large, multi-location brands can communicate with their customers at the local level. Consumers are increasingly mobile, but they also are connected to their current location and immediate surroundings through a combination of GPS, WiFi and Bluetooth signals on a 24/7 basis, whether it's a smartphone, tablet, smartwatch or other "smart" device.

The Holy Grail

Those consumers are searching for something — a discount, restaurant location or menu, or a way to place their order and pay for it via a mobile app before they even reach the restaurant they've taken the time to seek out on their mobile device.

"The holy grail of advertising is to serve the right message to the right person at the right place and time – and to know how that directly impacted your business," said Brandon Starkoff, vice president of product marketing for xAd, a location-based marketing firm. "That’s what location-based marketing enables. It leverages real-time and past location data from mobile devices to create more relevant marketing messages and experiences. By knowing the places people frequent, marketers can be more effective and efficient."

Location is about context, according to Starkoff. Knowing where a person has been and where they are helps a restaurant to predict and influence where they are going. Location-based marketing enables marketers to use real-time signals to gain insight into a potential customer's intent in order to deliver more effective advertising messages based on the person’s current context, or location.

"Before, a restaurant chain could only hope a target consumer was on their phone and hungry for a rib-eye when they drove by a steakhouse chain — and then blindly offer a coupon to prompt a visit," Starkoff said. "Now we can combine sophisticated lifestyle data, dining-out frequency and patterns, and habits with messaging that’s dynamic and proven to resonate." 

It's not just for sit-downs or fast casuals — It works for QSRs, too

For an individual or family that makes the decision to go out to eat, there's an array of options in the sit-down and fast casual restaurant categories. Many of them also use location-based marketing to draw in diners. At the least, such restaurants have a mobile presence that will include individual restaurant locations, hours, menus, specials and perhaps discounts or rewards programs via a mobile app.

The same applies for QSRs. For example, a potential customer, David, male, age 28, is driving from home to a shopping mall. Along the way, he decides he's hungry and that a quick meal at a KFC is what he would like to eat. David reaches for his mobile device to find the nearest KFC location. Location-based marketing does the rest, and KFC soon knows David is on his way to a particular store. 

"QSR is one of the categories that location can have the greatest effect on for two major reasons" Starkoff said. "First, offline sales and visitation are both core to the business. As Denny's CMO John Dillon has said, 'marketing’s goal is to drive butts to seats.' Secondly, consumers already rely heavily on mobile devices to make purchase decisions and have immediate needs. Outback Steakhouse reached people nearby their own and competitors' locations to drive awareness and visits. Additionally, KFC uses location-based marketing to promote its new breakfast menu in the U.K."

A case study

xAd and London-based media network Blue449 partnered to drive awareness and additional customer visits into KFC stores in the U.K. The three-month-long location-based marketing campaign launched in March this year to promote KFC's burrito range. It successfully drove nearby consumers into KFC stores through proximity targeting and conquest targeting at competitor locations. The result was an increase of 18,000 in store visits.

"Our target audience tends to be young adults and busy families who are becoming more and more reliant on their mobile devices to make their lives easier. Leveraging the most accurate location technology helps us reach our audience at the right place and at the right time with offers that are relevant to them,” said Jenny Packwood, head of digital, PR and brand communications at KFC, in a press release from xAd.

xAd targeted quick service food consumers to identify and reach the relevant target audience for KFC. The chain found that the most receptive demographic to location-based marketing was busy parents with families. This insight drove KFC to tailor its campaign for this segment with dynamic creative that showed the distance to the nearest store.

Why does a QSR want this technology and what does it need to know?

Location-based marketing enables restauranteurs to gain real-time insights into consumer intent to drive more visits and sales. QSR customers – like those for fast casual or fine dining, or retail shopping – depend on mobile devices. They also have high expectations for immediacy and proximity, according to xAd's "2014 U.S. Mobile Path to Purchase" study that provided insight on how the always-on and on-the-go nature of mobile impacts consumers’ intent, immediacy and context. The survey polled 1,500 mobile users, who used their smartphones to make purchase decisions in the last 30 days. The survey revealed:

• Half of smartphone users consider mobile the most important media for restaurant decisions.
• Urgency is key for QSR, with two-thirds looking to make a transaction within the hour when they use their smartphones.
• Given the immediate nature of QSR transactions, consumers are using their devices primarily to find business locations.
• When looking up information on a QSR, over half of smartphone users expect businesses to be within five miles.
• QSR research on mobile indicates intent (81 percent of respondents completed their purchase related to mobile research); nearly all users converted or plan to in the future, most using only mobile for their decision

Misconceptions be gone

Like the brand dashboards many marketers share with their agencies, a quality location-based marketing platform shows what’s happening at a brand’s owned location and its competitors' stores across the country and the category. It can also quickly target a particular zip code or physical restaurant location to determine visitation trends and activate new campaigns and offers.

"People often mistake location as a local targeting tactic," Starkoff said. "In reality, location provides one of the greatest indicators of consumers' intent — in real-time — and the ability to activate audiences against that."

By understanding the places people go and the large-scale patterns in mobile usage and physical behavior, marketers and advertisers in retail and restaurants can gain a better understanding of their audiences. xAd will share new insights into consumers’ demands and expectations across path to purchase, and strategies for how marketers can use location insights to address the change in consumer behavior and influence a person at the moments of greatest intent and receptiveness.

Join xAd and QSRWeb.com at 2 p.m. ET on Thursday, Dec. 3 for a live webinar on the topic of "Location-based marketing: A guide to strategy, deployment and successful return on investment." The panelists will be Brandon Starkoff, VP of product marketing, xAd, and Judy Mottl, editor, RetailCustomerExperience.com, Networld Media Group. Click here to sign up for the webinar.

xAd enables real-time, location-based marketing, without the guesswork. Working with xAd, marketers can deliver more relevant, personalized messages to the right people they want to reach, based on the real places they visit everyday. Each month, xAd's patented location platform helps marketers reach more than 300 million people globally via more than 30,000 popular mobile applications. With xAd, marketers can say goodbye to assumptive marketing and reach the right people at real places in real-time with precision, relevance and confidence. Learn more. 

About Travis Wagoner

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Travis Wagoner spent nearly 18 years in education as an alumni relations and communications director, coordinating numerous annual events and writing, editing and producing a quarterly, 72-plus-page magazine. Travis also was a ghostwriter for an insurance firm, writing about the Affordable Care Act. He holds a BA degree in communications/public relations from Xavier University.