5 Key Lessons for New Franchisees on Location-Based Marketing

Published on April 09, 2014

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Back when my wife and I were expecting our third son, we made multiple shopping trips to both big-box retail as well as smaller specialty stores.

Through our experiences with our previous children, we now knew what items we needed to buy in hopes that it would make the life of our expecting son’s newborn and toddler years just a little bit easier. One of the first stores we visited was Babies R Us, driven in part by a few gift cards we’d received from family and friends.

As a marketer by trade and an early adopter of social media, I had gotten into the habit of checking into retail locations on apps like Foursquare, Yelp and Facebook. The chance of finding a hidden deal or discount is exciting enough to keep that habit in the top of my mind.

As we walked into the store, I habitually checked in on Foursquare – one of the more popular location-based apps that captures consumer attention in large part through the use of game mechanics. When I did this, I was delighted to find that my check-in had unlocked a digital coupon for $25 off of a $100 purchase of clothes, shoes or accessories.

This was exciting. My wife and I make a point to be bargain shoppers and knowing that we had lots of baby accessories to buy, we were delighted to dig up this little location-based treasure.

But what happened next was an utter disappointment and a brand experience that has stuck with me for the past two-and-a-half years.

When we finally made it the checkout line, arms full of baby loot, the polite older lady cashier was stumped. When I showed her the coupon on my smart phone, she admitted that she had never seen a customer bring in this type of deal to the counter before.

When I explained it was a deal on Foursquare that her company had set up and I had unlocked, it became clear that she had no idea what Foursquare even was or how it could produce a coupon on my mobile device.

To her credit, she believed that it was a legit promotion. I was able to show her the date and address of the exact Babies R Us we were at where the location-based marketing offer had been promised.

What she couldn’t figure out was how to actually enter the deal into the cash register.

And so, we waited as she called for reinforcements…

Hello, Mrs. Store Manager

After a few minutes, we were greeted by the store manager, a kind and slightly younger lady who wanted to make things right.

She curiously looked at the deal on my phone while a puzzled expression crossed her face, much in the same way as the checkout clerk before her. Once again, the manager had never seen this type of coupon before, but didn’t debate the legitimacy of the deal because all of the information was correct.

I smiled, put on my marketing hat and explained to her someone from her corporate marketing department had probably set up the deal with Foursquare directly.

Her response still sticks with me to this day: “Yeah, they do things like that all the time and never really tell us anything about it.”

After a few more moments, the manager left and sent in the assistant manager, a girl probably in her early 20’s who she said was more familiar with “the Twitter and the Facebook stuff.”

While she did indeed recognize Foursquare and had admittedly cashed in a Groupon deal earlier that day, she wasn’t able to figure out how to enter the discounted deal in the sale system.

Our deal was denied, and my wife and I left the store empty-handed and with empty hearts for the brand.

5 Fundamental Location-Based Marketing Lessons

To the staff’s credit, they really did try to do the best they could with the available information they had. But Franchisees should always remember that your frontline employees can only provide the level of service that they have been trained to deliver. If your systems don’t align and retail staff are not privy to information about promotions from your specific franchise or even the corporate entity, disappointing customer experiences like my story are inevitable.

With that in mind, here are a few valuable lessons that franchisees can take to heart when thinking about leveraging location-based marketing strategies from our retail customer experience:

  1. Good internal communications can make or break your success in using location-based marketing promotions. If your corporate marketing department fails to let your franchise and retail associates know what to expect in terms of top down promotions, you are in grave danger of creating poor customer experiences. In today’s world, disappointed customers share those experiences instantly on their mobile devices to their friends on social media.
  2. You must promote the deal to your customers at retail. It became obvious that we may have been one of the first and only customers to claim the Foursquare check-in deal. If you want your deal to be successful, your customers have to use it. And, unless they’re complete social media nerd like yours truly, they may not remember to look. Simple signage at the register or entrance of your location can make all the difference in terms of redemption of your promotion.
  3. Make sure the rules and restrictions of your deal are clearly stated in the mobile application. If your deal copy is vague or leaves room for debate from your customers, you could potentially put your retail associates in a crisis situation. While we didn’t push when our deal redemption was denied, we probably could have raised a ruckus and done so in front of the rest of the folks in line. I’m willing to bet that’s happened in some other cases. Always make sure to clearly state the nature of your deal and what items are fair game in your copy.
  4. Keep instructions on your register that help to eliminate confusion and wasted time in the check out line. By instructing your retail associates that the deal is legit, how to log the deal in the cash register and how your customers will present the digital coupon, you will eliminate any confusion which can lead to long waits for other customers in the check out line.
  5. Empower your retail associates to fudge a little. Give your retail associates the leeway to grant the deal to customers whose items might fall in the gray area of the definition of your deal. Again, if your copy is clear, this will be less of a problem. However, the impression and delightful experience you will leave with your customers by granting the deal as opposed to denying them is well worth the profit margin you will lose in the discount. Sure, some of you might debate this one, but then again, why are you discounting your products in the first place?

By all means — experiment with location-based marketing in your franchise system.When implemented wisely, I believe these types of tactics can work to increase customer happiness, retention, loyalty and referrals. Then again, if poorly implemented, the same tactics can leave your customers with a sour impression of your brand. The key to making it all work for the positive lies in how you execute marketing across your franchise operations.

Have you tried implementing location-based marketing in your stores? How did you get the word out to your retail-level associates?

Written by FranchiseGrade.com Team

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