SoLoMo Place Based Marketing: Personal Utility or Prying?

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Recently I came across a new term: place-based marketing. I am familiar with proximity marketing, location marketing, and even hyper local marketing.

I’ll explain place based marketing in more detail next month; for now let’s just say it utilizes indoor mapping technology to allow consumers to navigate a store and receive offers based on their location and previous purchase habits. How Wal-Mart is SoLoMo delves into ways Wal-Mart puts the customer shopping experience front-and-center, placed-based marketing being among the tactics.

What’s the big deal?

E-commerce sites collect data all the time. Using a combination of cookies and other technologies, most of us are aware that our online behaviors are being monitored and studied; many expect it. Amazon is one example of a company that uses data to create a more relevant customer experience based on previous behaviors.

Retailers are now exploring ways to use technology to create more relevant offline experiences as a means to deal with show rooming, the practice of consumers using retail locations for “window shopping” but purchasing from online providers.

Video surveillance and mobile phone Wi-Fi data are collected and analyzed to provide on location insights designed to help retailers optimize store layouts and increase sales through more targeted offers.

Studies have shown that consumers are willing to exchange personal information for something of value in return, like offers. However, the use of surveillance video and smartphone data has set off alarm bells.

Nordstrom’s recently ended a program designed to track consumers in their stores when they received complaints about the practice.

Recent allegations about NSA’s collecting of personal information have certainly fueled privacy concerns around the collecting of personal information, particularly mobile communications.

Is it all or nothing?

Do concerns about privacy mean that retailers have no options for improving the in-store buying experience through place-based marketing? There were, and still are, privacy concerns with online marketing practices. Building a Verifiable Online Identity: Proving You’re the Dog You say You Are on the Internet and Social Media Privacy in the Workplace, Is there Any? are two articles by my fellow contributors that cite evidence of concerns with online marketing and privacy practices.

Many consumer concerns have their roots in nefarious practices of groups who have abused the sacred trust of protecting personal data. In other instances, marketers may have carelessly collected and ineffectively used data; adding little or no value to the consumer’s experience.

Marketers have to understand and address these fears and concerns.

What does this look like?

The most obvious answer is for marketers to protect the data they collect. There is no substitute for data security best practices.

We marketers love data; however, sometimes we collect data without knowing how we plan to use it.  Perhaps we should be better stewards of the data we already have.

We should let consumers know how we plan to use the data we collect and there must be a clear benefit value to them.

When does relevance and utility cross the line?

Although the response to this question is personal, for most of us any message that intrudes with irrelevant or poorly timed communications is annoying. Although we may have developed a tolerance for “spam,” the use of personal information extracted and used without our permission clearly violates our right to privacy.

I once received a letter from my bank wishing me a happy birthday by referencing the date. A birthday wish is a wonderful idea, I love my Starbucks birthday drink; however, there was absolutely nothing to be gained by disclosing the date. In fact, it felt pretty creepy.

Probably the most important best practice; give consumers control over their data by allowing them to opt-out if they so choose. Even information we have permission to collect can be used inappropriately.

Do we just need more time?

As smartphone penetration approaches 80% of the US mobile phone population and tablets are closing in on 60% privacy issues will not soon be going away. Perhaps with responsible behavior and appropriate privacy safeguards we will arrive at a reasonable consensus by balancing freedom of choice and respecting the privacy of those who choose not to participate.

I have asked several questions; you may have more, let’s begin a dialogue that will help us discover ways to offer the kind of utility we have come to expect from companies like Amazon and avoid abuses like those we have heard on the evening news.

Next month, I’ll offer some thoughts and suggestions on ways we can use online and offline practices to create utility for consumers. This month I want to use this column as a catalyst to start a conversation on this very important topic.

So, what you you think?

Joe Ruiz
This monthly Social Customer Experience Marketing column is contributed by Joseph Ruiz. Joseph is President of Strategic Marketing Solutions, a full-service marketing and consulting firm specializing in web-based integrated Relationship Marketing. Joseph thrives on the ever-changing nature of marketing in the digital age, embracing interactive opportunities, while applying three decades of hands-on expertise in online and traditional marketing. When he’s not helping business-makers navigate through complex marketing challenges, Joseph enjoys reading, working out and traveling just about anywhere…anywhere you can get a digital signal, that is. +Joseph Ruiz
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