By Andy Wood, Managing Director, GI Insight
More people make hotel reservations online than through any other channel, with smartphones increasingly used to conduct online searches and travel planning. This, coupled with the fact that smartphone technology has made reaching consumers anywhere anytime a reality, means how to combine smartphone technology with the right offer for the moment is a question many marketers in the hospitality industry would like to answer.
SoLoMo marketing: the combination of social, local, and mobile marketing, could provide the answer. Combined, these three powerful elements link the buzz-creating power of social media, the Big-Data-fed ability to provide real-time personalisation based on a consumer’s previous behaviour and current locality, and the digital precision and reach of mobile technology.
Success stories
Where hotels are currently succeeding is on the social, and the mobile side. Linking this with location-based marketing is, so far, more challenging, and therefore much less common.
There are some early adopters however, predominately among the larger hotel groups. Where they tend to be using SoLoMo is in linking with social networking apps such as Foursquare, and encouraging people to check in when they arrive at a hotel via their mobiles, to receive offers from participating local businesses.
Starwood Hotels and Resorts is one example. It uses Foursquare in its loyalty programme, Starwood Preferred Guests, enabling members to earn bonus loyalty points when they check in with Foursquare, as well as offers from nearby establishments.
Similarly, Four Seasons Hotels in California was an early adopter of this type of SoLoMo, using a location-based social networking app to give guests recommendations of local places and experiences to try when they checked in during their stay, as well as the chance to earn credits to use in the hotel itself.
The opportunity is there for hoteliers to go a step further and use SoLoMo to target guests with their own offers: a meal deal in its restaurant perhaps, a discount in the spa, or timely discount deals on stays when a customer checks in at an airport. These kinds of offers are certainly a good way of building loyalty and driving repeat custom. However, recent GI Insight research shows that while SoLoMo can definitely be worth it, success hinges on marketers understanding some key rules of engagement.
Rules of SoLoMo engagement
Holding permission to target is the first rule hoteliers must abide by.
GI Insight’s Harnessing the Power of SoLoMo report reveals that, while a large majority of consumers (up to 90%) are open to receiving location-based marketing messages, 70% will only accept these if they have given explicit permission to be targeted in this manner. And 59% would only welcome SoLoMo marketing, and consider acting on it, where they had long-term ties with the sender, such as membership in its loyalty scheme.
In fact, while consumers may be increasingly using their smartphones to search for local businesses when out and about, and tagging their Facebook status at particular locations, many are still unhappy with the idea of being targeted themselves with the level of communication and data-sharing that highly targeted, location-based marketing via a smartphone allows.
As a result, businesses that send out unsolicited location-based marketing messages risk damaging their reputation and losing customers, with the vast majority of people – 70% – saying they would unsubscribe from a mobile mailing list immediately if a company they were not familiar with sent them messages of this kind.
One size does not fit all
Crucial to success though they may be, having permission and an existing relationship are insufficient on their own: 59% still would not act on location-based mobile messages unless they were individualised to reflect their personal needs and preferences, while the same proportion would also be more likely to take up localised mobile offers if they specifically belonged to the sender’s loyalty scheme.
In fact, as the examples above show, loyalty schemes and SoLoMo marketing work together hand in hand, with the very individual customer information gained through a loyalty scheme extremely valuable for targeting SoLoMo offers. And, the more relevant an offer, the more likely a customer is to respond, and to recommend that company to others: a win-win situation.
What’s more, SoLoMo offers might also be better received if sent directly from the brand – via SMS, email or special app – rather than by a social network, as just 22% of those surveyed say that sending messages via a social media website would increase the likelihood of them taking up an offer.
Potential winner
Used correctly, location-based mobile marketing has tremendous potential for building strong customer bonds and providing highly tailored messages that resonate with a large proportion of customers, and can therefore add a valuable layer to the marketing mix.
Success, however, hinges on choosing the right audience and on abiding by the three cardinal rules:
- putting in the groundwork to build relationships first
- gaining explicit permission from the consumer
- individualising offers
All of these pre-requisites are largely the result of prior engagement with the customer through other channels and the development of a well-shaped customer journey before even attempting SoLoMo communications. For any business that abides by the rules, though, SoLoMo has clear potential as a powerful marketing tool.
Download the full Harnessing the Power of SoLoMo report here
About GI Insight
GI Insight specialises in database marketing and loyalty schemes, having created and managed more retail loyalty programmes than anyone else in the UK. They offer a full range of database marketing services including consultancy, database design/build/host, data capture, analysis, segmentation, profiling, campaign execution and measurement, available as a whole or on a ‘pick and mix’ basis. The analysis and interpretation of your sales and customer data enables you to influence customer behaviour. This knowledge helps you to reliably increase profitability by:
- Getting more new customers (acquisition)
- Getting existing customers to (retention):
- Spend more often
- Spend more per transaction
For more information click here