Mobile (or bluetooth) beacons have been on the market for 2-3 years, yet all we see is experimentation and no proof of ROI. Consumers are not excited about it their. Sure, if you can make mobile beacons work, they are potentially great, but is that the story so far?
A short history of beacons
According to the infinite well of modern wisdom, Wikipedia, beacons were fires lit at well-known locations on hills or high places, used as lighthouses for navigation at sea. I get it – I am in a boat, approaching land and the signature and possibly color of a lighthouse can tell me where I am and where I can find safe passage. Definitely relevant information for a sailor.
The idea behind mobile beacons is much the same. The promise is to give an individual a mobile experience relevant to the real-world context the person is in at that very moment in time.
The problem is that unlike a lighthouse, which provides a crucial service, sometimes the difference between life and death for its audience, mobile beacons seek to notify us about a 20% discount on a product we are standing close to.
Mobile beacon advertising does not work
For that reason mobile beacons will never work, at least not as a pure advertising or marketing tool. There is no utility for me as a consumer, and I question the utility for the retailer or the restaurant as well. If I am in your store looking for a new jacket, do you really want me to be interrupted by a buzzing phone, or do you want me immersed in my real world shopping experience?
Ok, lets assume that interrupting me while shopping is a good idea. What are you going to tell me? How are you going to make it relevant? The business case also needs to consider how many people you can reach with this information, and the cost of reaching them.
How most mobile beacons work
Beacons emit a signal that a smartphone can pass to a mobile app (that you have to build). Your app can use this signal to present content to the me, typically in the form of a notification. The beacon infrastructure captures data about my device and possibly who I am, and the beacons I have received notifications from. Of course the retailer and restaurateur has to have a system that ensures notifications are relevant and that data is collected, analyzed and translated into valuable business intelligence.
As a user I need to:
- install your app
- allow it to track my location, even when I am not using your app
- have bluetooth enabled and
- opt in to receive notifications from you
You need to build and maintain:
- a beacon infrastructure (place beacons in your store, but where??)
- a mobile app integrated with this infrastructure
- a content management system and
- targeting algorithms to ensure notifications are relevant to each mobile user
Beacons are just too much of a hassle
Say for a minute you have 20,000 monthly customers. 40% are pretty loyal, and 50% of your loyal customers have you app installed. Further, 50% of your app users have allowed it to track their location and another 50% opted in to receive notifications. Also keep in mind that on average 50% of smartphone users has bluetooth enabled on their device at any given time. Bluetooth is the wireless technology used by beacons.
If you followed the math above you will already know you can potentially reach 500 out of 20,000 people on a monthly basis with a targeted notification while in store. That is less than 17 people per day. So 20,000 customers isn’t enough… You probably need 2,000,000 to even consider doing something like this.
Do your own math, I can guarantee you that my numbers off the mark, one way or the other. The bottom line though? Deploying beacons and the systems that goes with it is probably not worth it.
Free WiFi is the Beacon of Hope
There is potentially a better way – Just integrate free guest WiFi in your marketing plan.
Customers love free WiFi, and you get to present them with a relevant and personalized message with they connect to your WiFi network to check competitor prices. Best of all, you get all the data you could have acquired from Beacons, at a very low cost.
Customers view WiFi as a value add (if it works well) and it enhances their overall in-store experience. When surveyed, end users tells us that localized and personalized content on the WiFi landing page is not a hassle or annoying; it is friendly and relevant. As an example, a recent program ran by one of our clients resulted in a 209% increase in conversion rates over other in-store channels.
What is likely to happen with Free WiFi usage if your service is great and people that connects gets access to special deals and products?
Free WiFi is everything that Beacons are not. While I agree that the opportunity to personalize an experience is greater on a mobile app, I believe the cost and risk of executing on personalization at the levels expected by customers is too great, leaving mobile beacons dead in the water.
Which leads me back to where we started. Lighthouses. What if a lighthouse started transmitting random coupons for free drinks or beaming their signals inland instead of offering relevant information that can save your life? Over time its value would be eroded to a point where no one longer takes notice.
My advice would be to get real with your customers, get real with your cost, and leverage touch points that your customers already love.