Aug. 22, 2014
Beacons are powerful tools, enabling marketers to engage the right customer, with the right message, in the right place, at the right time, according to a panel speaking at the recent Connect Mobile Innovation Summit.
"Beacons are really powerful tools for marketers. They can actually push contextually relevant messaging and it can be dynamic based on different attributes," said Kelly Manthey, VP of Strategy and Innovation for Solstice Mobile.
Manthey moderated the panel, which included guests Clayton Chan, CEO of the San Francisco Soup Company; Jordan McKee, analyst for 451 Research/Yankee Group; and Will Hernandez, editor of MobilePaymentsToday.com.
How do beacons work?
Beacons are devices that use low-energy Bluetooth signals to connect with other devices. When a Bluetooth-enabled device such as a smartphone comes within 100 – 130 feet of a beacon, the two devices can communicate.
Customers must have downloaded an app able to communicate with beacon signals, and the customers' Bluetooth, location services and push notifications must be enabled on their devices for data to transmit.
Once in proximity to a beacon it's programmed to recognize, apps can trigger messages customized to the users' attributes to delivery highly relevant one-on-one communication.
"In terms of consumer behavior, we're seeing three things come to the forefront that used to be 'nice to haves' that are now 'must haves,' and that's immediacy, simplicity and context. Those are now 'must haves' from a consumer point of view," said Jordan McKee of 451 Research/Yankee Group. "The beacon is just a really good tool to play into all three of those demands."
Beacons in action
The San Fransisco Soup Company is not only operating in a highly competitive market, it's operating in a very tech-savvy context.
"We're in an arms race, basically," said Clayton Chan, CEO of the San Francisco Soup Company.
San Francisco Soup Company needed to launch a loyalty program that would help them to relate to their customers one on one and thank them for their loyalty without slowing down its order line.
Its stores routinely serve around 300 guests during lunch shift, and stopping to process a loyalty card would slow down the cashiers and potentially turn off customers.
To meet its need for a program that wouldn't slow down throughput, San Francisco Soup Company partnered with Punchh to launch a beacon-enabled mobile loyalty program. Using the app, members can earn loyalty points, redeem rewards, find locations and receive news and offers.
When loyalty program members enter a San Francisco Soup Company restaurant and approach the counter to order, a beacon detects their presence by communicating via Bluetooth technology with the loyalty app on the customer's smartphone. The customer's name appears on a screen visible to the cashier. The cashier doesn't have to swipe a loyalty card or punch in additional codes to the POS system, which keeps the line moving, removing friction for both the restaurant staff and the customer.
The beacon-enabled loyalty program is currently being piloted in two San Francisco Soup Company restaurants.
Chan sees a lot of opportunity to differentiate his brand using beacons, since few others in his space have adopted beacon use.
Panelists cautioned retailers and restaurateurs to proceed with transparency and caution as they implement beacon programs.
"It all comes down to trust. It takes decades to build, but you can literally destroy it in an instant," said McKee.
- Brands should be transparent with customers about how they plan to use the data collected by beacons, and they should communicate clearly and concisely, said McKee.
- Opt-out should be easy.
- Brands should also be prepared to experiment, watch and learn what their customers find valuable. New features should be thoughtfully rolled out.
- Test thoroughly before launch and before rolling out new features. Use A/B testing for messages.
- Identify early on what metrics will indicate success, whether it's redemption rates, in-store app engagement, queue reduction or something else.