Location based marketing
The heatwave has meant that over the summer consumer spending in pubs and restaurants has held firm with like for like sales significantly outperforming last year’s figures.

Despite the talk of fragile consumer confidence, consumers are continuing to go out to eat and drink; however increased cost pressures, particularly from increases in business rates and food costs, mean that margins are being squeezed. Consequently any way to encourage consumers to spend more or become a repeat customer are very welcome.

Research shows that over the past 12 months consumers are shifting their spending patterns in order to cut down on household expenses. People are becoming more energy conscious in order to save money and there has been a significant uplift in sales of cheaper, own-label brands, but this thriftiness does not apply to the bar and restaurant sectors. People are not cutting down on alcohol or food spending or swapping more expensive brands for cheaper ones.

A study by RSM shows that bars and restaurants that are developing exciting and affordable relationship-building concepts are outperforming competitors and are attracting investors keen to support ambitious roll out plans. Creating a customer relationship management system is the perfect solution and could not be easier or more cost effective than it is today.

A data driven approach to customer management enables bars and restaurants to establish and build relationships with customers on an individual basis which engenders loyalty and repeat business. For instance, using location based technology will allow you to deliver an in-app communication to a customer when they are close to the venue offering them a discount on a drink they regularly order or a two-for-one lunch offer. Putting each customer at the heart of the business and making them feel special is the key to creating a thriving bar, pub or restaurant today. The only way to do this is through data.

Industry experts believe that location based marketing (LBM) will be a growth market over the next few years. In the US location targeting drove $17.1 billion in ad spend in 2017, accounting for 38% of the $44.8 billion spent in mobile. That number will double by 2022 to $38.7 billion and the UK is following in its Trans-Atlantic cousin’s footsteps. In fact  a recent study conducted by Verve showed that 73% of UK consumers now allow apps to access their mobile’s location, and one in ten (11%) always allow apps to do so. The opportunity for LBM is therefore significant, but what about the impact of GDPR?

Under the new legislation location data is considered personal data and therefore if considering a location based marketing campaign consent from recipients is crucial, Consent must be opt in (customers much check boxes themselves, pre-select boxes or opt-out is now illegal), unbundled (ts and Cs must be separate from each other), granualar (data used for multiple marketing efforts must contain individual consent), named (all organisations that will use the data, including third parties, must be named)and documented (records must be kept acknowledging when, how, and what the user consented to).

So whilst the landscape is tighter than before, having opted-in customers is actually a good thing – as it is these customers that are far more likely to respond to a LBM offer. Currently, over three quarters of organisations feel like they are not using their customer information effectively or that their existing database marketing approach is not performing as well as it should. So with customer interest in LBM growing stronger every day now has never been a better time to reassess the way data is used in the business and if necessary make changes that will earn significantly more incremental revenue.

If you want to know and understand more about the way data is changing the world you live in, or would like to know how data can add value to your business, please email me at david.gurney@alchemetrics.co.uk


Dave Gurney

CEO, Alchemetrics - Expert in Data & Digital Marketing
enabling senior marketers to value from engaging customers online.