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Why Proximity Beacon Marketing Won't Survive 2017

Why Proximity Beacon Marketing Won't Survive 2017

Throughout the month of January, we had the chance to hear all about the biggest digital marketing trends set to make an impact for the year, and one particular buzzword that kept cropping up was ‘beacons’. With the ability to allow consumers to access the goods and services they want in a quick and easy fashion, beacons have the potential to completely revolutionise individual shopping experiences. It’s, therefore, no wonder many marketers are singing the technology’s praises.

Using data that brands already hold on their customer shopping habits, beacon technology allows companies to direct special offers and discounts to customers, as well as delivering targeted and relevant advertising. This type of personalisation is invaluable, and allows brands to build strong relationships with their customers, fostering loyalty from day one.

So what’s the problem?

Whilst one cannot deny that beacon technology is hugely appealing and the potential rewards are hugely beneficial to brands, in reality, the implementation has its challenges. In order for the technology to work, customers must have an app downloaded onto their smartphones. However whilst the average number of apps used by a smartphone owner is around 27, statistics have found that that the average British user is downloading zero apps per month and are only using five to six apps per day. Consumers have the apps they need and are not looking to add to their collections.

Of course, to overcome this ‘app issue’, supermarkets can install tablets in trollies that can share in-store location based messages to fulfil the potential beacon technology has to offer - but this is a hefty hardware addition and is incredibly costly.

So despite all the talk and hype surrounding beacons, we could argue that, with the exception of some very narrow use cases, they haven’t worked as well as we all hoped for proximity marketing. What’s more, consumers are still wary of location marketing; the fine line between intrusive and helpful is a hard one to balance. So what’s instead?

The AI revolution

2016 marked the true start of businesses exploring how AI could change their businesses.  In November for example, Twitter introduced chatbots to direct messages. The technology means that brands will be able to promote their content and sites in an automated fashion but also allow for quick replies that will continue to boost customer relationships. Over the next 12 months, we will finally see businesses begin to harness the full potential of applied AI and machine learning. With its ability to collect and analyse huge amounts of data, AI will help businesses recognise patterns, learn from them and enable better decision making in ways, faster than we have ever known.

Advancements in machine learning will also mean that marketers will be able to rely on cloud-based customer engagement solutions to select the most appropriate communication channel and message to reach their customers in more targeted ways than ever before. During2017, our experiences with brands will be transformed, as organisations and marketers use this technology to better understand their customer’s preferences, engage in deeper interactions and communicate to them in more contextually relevant ways – ultimately improving the overall customer experience.

Build the conversation

Marketers would be wise to include marketing messages and promotions as part of a pre-existing transactional conversation – be it through SMS, email or even via Facebook Messenger, for example – between the customer and organisation.

This method of customer engagement is not only a less intrusive alterative to location based marketing, but research has shown that these messages have a far higher open rate than unsolicited broadcast messages. These days, consumers receive hundreds of marketing messages a day, and two in five say they feel overwhelmed by brand communications. Given that these more targeted messages are based on a pre-existing relationship, they are much more likely to be better received by customers. It’s a simple case of quality not quantity when it comes to engaging with your customers.

Technology is changing marketing at an unbelievably fast rate. There are always more new ways for brands to engage their customers. Whilst beacon technology, and the benefits it could provide are not in doubt (for example the benefits it provides for analytics to understand customer behaviour), I would argue that focusing solely on the technology is restrictive. It will only be to a company’s benefit to look beyond beacons – to AI and more targeted communications – to find the best methods to improve overall customer experience. With all these technologies on offer, 2017 will be the year for businesses to find innovative methods of engagement that work best for them and their customers.

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Xavier Legrand

Xavier Legrand

As Head of Product, Xavier spearheads the strategy for Engage Hub to ensure it not only meets the needs of the market, but also remains the leading innovator of customer engagement solutions. Prior to joining Engage Hub, Xavier was responsible for leading product strategies and marketing projects for multi-national enterprises such as a major automotive alliance and mid-size retailers across Europe. Holding an MBA from the London Business School, Xavier is perfectly placed to consult on loyalty marketing using emerging communication technologies to Engage Hub's corporate customer base.

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