In today’s day and age, there is both a need for innovative ways to reach customers and an oversaturation of products trying to do exactly that. The problem that most companies face when they attempt to use a new technology is that they don’t understand exactly what they are getting into. In the case of proximity beacon technology, the potential for success is incredibly high, but only with the proper foundation of knowledge needed to do so.

Today, we are going to walk you through a beginner’s guide to this exciting technology that allows you to reach customers at the best possible moment to get their attention and drive them to your business. Malls, coffee shops, and retail spaces like Macy’s have seen incredible success by employing the exact tools we are about to cover.

Our hope is that once you see how easy it is to get started with proximity beacon technology and the impact that they can have on your sales numbers you will have the confidence to take your marketing to the next level. With this said, let’s get started.

proximity beacon technology

What is Proximity Beacon Technology?

Originating back in 2013 when Apple first introduced iBeacon technology, proximity beacon technology is the use of these beacons to send alerts to customers mobile phones as they approach, pass, or leave a physical location. While this may not sound terribly exciting, in 2016 beacon marketing generated half a billion dollars and the market as a whole is predicted to be worth over 50 billion dollars by 2022.

With this sort of potential, any retail store looking to fight against the growing eCommerce market and remain relevant in an expanding digital world should consider proximity beacon technology. By reaching customers in the store as they are about to make purchases, you can give them the extra nudge necessary to win their business.

How does it work?

Now, it’s one thing to say that proximity beacon technology will be worth billions, it’s another to show you how it works and the use cases most likely to drive in these kinds of numbers. So, how does it work?

Using beacons, which are small Bluetooth radio transmitters, businesses can transmit and display special offers on Bluetooth-enabled phones when they enter the beacon’s proximity. These transmissions are most often received as push notifications on iOS devices and until recently through Google Nearby on Android devices.

However, it’s not just about sending special offers, although that is important. Proximity beacon technology allows businesses to better understand how customers interact with their store, what routes they take, and when they are most likely to make a purchase. Not only does this data allow for better timed beacon transmissions, but a more comprehensive view of your customers in general.

Why do marketers use beacons?

With a better understanding of how proximity beacon technology works, you might be wondering why marketers use beacons. After all, couldn’t you just send the same discounts or offers in an email? The key comes back to an old real estate tip: location, location, location. Imagine how much more meaningful a 20% discount can be when you are already in the store with a purchase mentality.

However, it’s not just discounts that marketers can use proximity marketing for. Beacons offer all sorts of use cases that can help organizations boost in-store conversions, engage customers at a higher level, and even improve repeat purchases through customer data.

Next, we’ll take a look at each of these opportunities in further detail to show exactly how proximity beacon technology can help you.

1. Proximity marketing

So far, most of what we have talked about falls into the category of proximity marketing. Using a mobile app, a beacon to deploy the message, and Bluetooth enabled phones, marketers can target and reach customers as they are shopping. Considering that 75% of customers use a mobile device while they are shopping, this is a huge opportunity.

If you are interested in establishing your own proximity marketing solution, the first step is to analyze your store for potential hotspots where a beacon would be most effective. From there, work with your team to try and understand how customers typically interact with your store. While you will receive better data once you actually start using proximity beacon technology, planning out your operations is one of the best ways to achieve good results early on.

2. Hyperlocal targeting

Once you have your initial proximity marketing solution setup, the next part of this process is to use the data you have collected to better target customers within your physical location. Through hyperlocal targeting, you can tailor your ads, messaging, and offers to relevant parts of the store, increasing your engagement and hopefully conversion rates.

Not only that, but once this process is done you can analyze the data again to get localized customer insights that go beyond where in the store customers are reacting best, but also which types of customers do so. After all, proximity marketing is a process and the more information you have, the better decisions you can make moving forward.  

3. Retargeting

Finally, the last way in which proximity beacon marketing can be used to drive sales for your organization is through retargeting. You may be familiar with retargeting in regards to ecommerce, but through beacons, retailers can retarget customers within their stores.

By remembering and then engaging customers with proximity marketing, you can show how much you care about your customers while providing an exceptional experience. This level of personalization in interpersonal relationships is rare, so imagine the effect it would have on a large scale.

Industries perfect for beacon marketing

At this point, we hope that we have displayed exactly how a proximity marketing solution can improve your business. However, depending on the type of business you operate, proximity beacon technology can have an even greater benefit to your organization. Next, we’ll cover a few of the industries that are perfect for beacon marketing, for one reason or the other.

1. Retail

Retailers are obviously some of the biggest proponents of proximity marketing, with large companies like Amazon, Target, and IKEA already launching their own solutions. Unfortunately, with most proximity beacon companies focusing on retail as their main industry, it can be difficult to stand out in an over-competitive market.

Keep in mind, we aren’t telling you this to discourage you. With 57% of customers likely to engage with location-based communications, proximity marketing is necessary. However, the overcrowded market does mean that your messaging needs to go above and beyond your average campaign to make a difference. Keep this in mind when building out your retail solution.

2. Restaurants

Along with retail, restaurants are another industry that can be greatly benefitted through employing proximity beacon technology. Imagine that a customer is nearby with some friends who are looking for a place to eat. By sending them a message using the beacons in and around your restaurant, you could offer them a discount right there, prompting them to come in to eat. Not only does this bring in old customers, but potentially a few new ones as well.

Then, depending on how well you have digitally transformed your business, the customer could potentially use their phone to order, pay, and even leave a review, all without ever leaving the app. If you are able to make it as easy as possible for your customers to convert and improve those interactions through user feedback, you can create loyal customers for life.

3. Hospitality & Hotels

Finally, the last industry we will touch on that is perfect for proximity marketing technology is that of hospitality and hotels. The first major benefit is that most hotels already have their own app where they can easily reach users. Then, once guests come to the hotel to check in, you could send them a proximity message welcoming them to the hotel with a link to check-in, get their room number, and more.

Proximity beacon technology is just one of many ways that businesses like this can use new technologies to make the process as easy as possible for their guests. Not only will this help you make a good first impression, but it offers a communication channel to them right away that they can use to find what they need, ask questions, and even leave feedback.

Drawbacks of proximity marketing

Now, so far we have only really talked about the benefits of proximity beacon technology and marketing. However, we would be remiss if we didn’t mention a few of the drawbacks of proximity marketing. While each of these drawbacks can be overcome, you need to know about them and which pitfalls to avoid in order to run a successful campaign.

Need to have an app already: Only 42% of small business have one, leaving a huge gap in who can target customers and who can’t.

Can only target existing customers: Since users must already have your app installed to receive messages, they will almost always be existing customers. Proximity marketing is built for customer retention and engagement, not acquisition.

Less familiar than other communication channels: Not everyone is aware of proximity marketing, meaning that when they receive one it might be confusing at first. Try to be as straightforward as possible when sending out your first message to avoid this.

As we mentioned, none of these drawbacks will cripple your proximity marketing campaign, but it can make it more difficult reach your customers without these cons in mind.

Where to get started

With all of this information on proximity beacon technology, you now might be wondering “How do I get started?” After all, without the expertise required to install a Bluetooth system, it might be difficult to launch your own proximity marketing solution. This is why most companies with work with a vendor or outsource the setup to another business.

Whichever way you decide to go, always remember to keep these tips and best practices in mind. Proximity beacon technology offers a unique and exciting way to reach your customers, the sooner you get started, the better you can serve your customers. All we have left to say is good luck!