The increase of internet availability and the level of smartphone adoption, together with the improvement of usability, and the spread of apps, contextual data, and services offered on-the-go are the main factors that are defining the rise of Location Based-Services (LBS).
LBS groups a set of approaches and applications (i.e. Augmented Reality apps such asLayar, real time check in with FourSquare, venue reviews as in Yelp, social get-together as in Facebook Places, and so on) that leverages the ubiquity of internet connection with the contextual needs of the user. Wherever the users (and smartphones) are, there is a business opportunity…
…but what does the user get from a business LBS app?
We can depict the following main benefits for the user:
• Obtain reviews and recommendations from other users before making a decision (i.e. search for a Chinese restaurant near a place)
• Get promotional prizes and discounts for a product or service (i.e. individual or social e-coupons valid for a limited time or location)
• Reach “social recognition” among other users, even in a competitive way, with potential business benefits (i.e. becoming a FourSquare mayor)
Interesting… but how can companies take advantage of LBS?
So far, the pioneering companies who are experimenting with these technologies are focusing their goals on:
• Branding: To create an appealing, fun, and entertaining mobile experience that engages the user while empowering brand values and positioning.
• Loyalty: To offer an innovative and worthy channel of customer service and interaction between the company and their users, as well as among users.
• Attraction: To present an interesting proposal for potential users, and also, utilizing the social viral effect to spread current customer experiences to reach similar targets.
Ok, that sounds too much like “marketing”… what does it mean in terms of real business?
This is a new method and companies are learning. Currently these goals have been monetized through different business models:
• Adverting: To display contextual and worthy ads in the user´s phone and get paid applying a “traditional” PPC model.
• Couponing: To offer a discount (i.e. using a QR code or grouping users) to boost demand on the spot and sell inventory.
• In-store walk-in: Drive traffic promoting your products by turning mobile visits into real visits and convert them into customers.
• Pay per use: Even the most common service has either a free or freemium model, some companies (i.e. media) are charging for the app download.
Moreover, the inherent capabilities of measuring every movement, click, and action will help the companies to obtain a new and powerful user profile with real time analytics, user tracks, level of engagement, and a social graph. To unveil, learn, and understand this data will be the building blocks for marketers’ success.
Bear in mind that the next 1 billion online users will access the internet using their mobile devices. LBS will turn this huge potential into real and worthy business opportunities. This will be the biggest lab to create the next killer apps!
Article posted on April 18th, 2011 at Tetuan Valley