Smartphone technology may have made reaching consumers anywhere anytime a reality, but how to combine this with the right offer at the right time has remained something of the Holy Grail for marketers, according to Andy Wood, managing director for GI Insight, who here explains how SoLoMo marketing promises exactly that. This article is copyright 2014 The Best Customer Guide.

The combination of three powerful elements - Social, Local and Mobile (SoLoMo) - pulls together the buzz-creating power of social media, the Big-Data-fed ability to provide real-time personalisation based on a consumer's locality and previous behaviour, and the digital precision and reach of mobile technology.

However, with consumers used to being in control and tapping into the web whenever they want for the information they require, the question remains of how welcome this level of targeting will actually be. Despite its potential, therefore, many businesses and marketers have yet to be convinced that implementing a SoLoMo strategy is worthwhile.

Rules of engagement
Recent GI Insight research into consumer opinions on the subject shows that it is worth it, but that successful employment of SoLoMo marketing hinges on marketers understanding some key rules of engagement. The Harnessing the Power of SoLoMo report reveals that a large majority of consumers are open to receiving location-based marketing messages from retailers on their mobiles and smartphones, but that it is only welcomed where consumers have given explicit permission to be targeted in this manner, and where they already have a strong existing relationship with the retailer in question.

In fact, while consumers may be increasingly using their smartphones to search for local businesses when out and about, and tagging their Facebook status at particular locations, the study shows that many remain uncomfortable with the idea of being targeted themselves with the level of communication and data-sharing that highly targeted, location-based marketing via a smartphone allows.

70% of the 1000+ consumers questioned by said they were only happy to be contacted with location-based commercial messages if they had given a brand explicit permission to do so, while 60% said they were only willing to accept SoLoMo marketing, and be likely to act on it, if they had long-standing ties with the company in question, such as membership of its loyalty scheme. The vast majority - 80% - said they would not welcome these messages from any company they did not have a relationship with.

Retailers that send out unsolicited location-based marketing messages do so at their peril, with 70% of those consumers questioned in the survey stating firmly that they would unsubscribe from a mobile mailing list immediately if a company they were not familiar with sent them messages of this kind.

Social issues
Interestingly, while the popularity of social media for personal communication might lead businesses to assume it a key channel for marketing to customers, the research reveals that consumers largely do not welcome receiving location-based marketing through their social networks. Just 22% said that receiving promotions through these sites would increase their likelihood of taking up an offer, highlighting somewhat surprisingly that the social aspect is the least important part of SoLoMo marketing.

There is one exception however, and that is with younger consumers - these, according to the research, are generally more willing to receive and respond to location-based marketing offers whether they have a long-standing relationship with the company or not, and regardless of the channel. Conversely, the hardest to reach group are women, who take a much tougher line than men against 'any old' business contacting them with localised offers via their mobile or smartphone. Just 14% are open to companies of this kind sending them location-based marketing, compared to 25% of male respondents.

With all this to consider, the question is exactly how to make it work. Clearly, for SoLoMo marketing to have a good chance of success, having explicit permission and a strong existing relationship in place, such as active membership of a loyalty scheme is crucial. Without this, any attempt at localised mobile-based marketing will have limited impact and could in fact misfire, so companies need to ensure they build strong relationships with customers first by investing in activities other than solely mobile marketing and implementing broad-based programmes to build customer loyalty at every level.

Personalisation matters
However, permission and an existing relationship are not enough on their own: in a further key finding from the research, 59% of those questioned stated that even with a prior relationship in place, they would not act on location-based mobile messages unless they were individualised to reflect their personal needs and preferences. The same percentage of respondents also said they would be much more likely to take up localised offers sent to their mobile if they belonged to the sender's loyalty scheme.

Knowing the customer then, and using their personal data to tailor and time mobile communications to them beyond just getting the locality right, plays an enormous role in engaging people and getting them to respond, as it does in all other aspects of marketing.

In fact, loyalty schemes and SoLoMo marketing work hand in hand. The customer intelligence gathered through a loyalty scheme is extremely valuable for targeting SoLoMo offers, revealing important insights into customer behaviour and spending habits that can be used to create tailored and relevant offers. This has a knock-on effect too: when this very individual information is used to create strong, tailored offers, not only is that customer more likely to take up such a localised offer, they are also more likely to continue shopping with that retailer and recommend them to others as they feel that their custom is valued and that the data they provide is being put to good use.

Potential to perform
Location-based mobile marketing clearly will not always be appropriate, remaining dependent on the audience and their relationship with a business. Used correctly however, SoLoMo has tremendous potential for building strong customer bonds and providing highly tailored messages for a large proportion of customers, and can therefore add a valuable layer to the marketing mix for retailers.

"Success rides on abiding by the three cardinal rules: putting in the groundwork to build relationships first, gaining explicit permission from customers, and individualising offers. Abide by these, and there is no doubt that SoLoMo marketing can become a powerful tool in the retail marketer's arsenal," concluded Wood.