During our conversation Derek asked me to pull on the experiences I’ve had as CEO of Locaid in location-enabling SMS marketing campaigns for our customers including the recent geofence pilot we ran with Alliance Data.

The blog and my answers can be found here - Top 10 Most Commonly Asked Location Based Mobile Marketing Questions.

If you think Derek and I missed any questions out during our discussion post them in the comments below and I’ll make sure I answer those too!

While in previous posts we’ve focused predominantly on Geofence use cases for Retail, this blog focuses on the Financial Services industry and how those banks and organizations that are incorporating layers of geo-intelligence are increasing customer service levels and driving up transactions and revenue.

Jeff outlines the following 3 use cases for geofencing that he’s seen Locaid’s financial service customers successfully implement:

1)      HNWI (High Net Worth Individuals) are priority customers for any financial organization. And they’re the customers that require the highest level of service. By setting up geofences around branches, banks can identify their HNWI customers when they are onsite and ensure they are given the appropriate level of service.

2)      The industry is becoming increasingly competitive and customers want, indeed are demanding, more and more added value in order to keep their business. Smart financial organizations are combining the power of purchasing information with the customers’ location. By combining these data points, the organizations can now offer customers special deals and promotions from the merchants they shop with the most.

3)      The merchant network is an important source of revenue for financial organizations. By using geofences to send notifications that promote merchants and support their sales, financial organizations are not only ensuring good working relationships but ultimately driving up overall transactions and revenue for themselves.

As readers of this blog will know, banks and credit card companies are already seeing the benefits of using location as an additional data point in preventing fraud, reducing false positives and stopping identity theft. While there are a few early adopters of Geofencing in this vertical, the “large segment of borrowers in each market (wanting) more tailored services akin to what they now expect from retailers” is going to drive use of the location-based service. And drive it fast.

To read the full post on ZootBlog click here.

While people have talked about the possible potential of geofencing and mobile marketing, this is the first time the concept has been proven. And the results couldn’t be more positive.

Key findings showed that:

• triggered sales per transaction were larger than average transaction sales, and
• sales were up 2.5% over projected sales for the time period and up 4.9% over projected sales for Black Friday.

A post-campaign survey was also disseminated to the participants of the trial and they told us that:

• 37% of participants claimed the text messages influenced them to visit a brand,
• 39% indicated that the messages influenced their purchase decision,
• 68% indicated they will likely sign up for future location-based text campaigns,
• 78% somewhat or strongly agree that mobile campaigns have the ability to influence consumers’ decision to visit stores,
• 88% felt that the message frequency was just right, and
• 60%+ were not concerned with security, privacy, or communicating with a retailer via mobile.

In reference to my blog earlier this week, this pilot-program used Network-Based Geofencing. To read the press release with full results click here.

Recently I’ve been getting a lot of questions about Geofencing. There are a lot of misconceptions out there and a lot of misleading language. This post is designed to clear up any questions you may have and to compare and contrast App-based Geofencing and Network-based Geofencing.

According to a recent xAd report, Geofencing has become the most popular location-targeting technique and is used in 55% of location-based advertising campaigns. From mobile marketing applications to minimizing the risks of a BYOD strategy to verifying location mobile gaming applications, Geofencing can make you hyper-local, improve your ROI, reduce fraud and ensure you’re compliant.

So how exactly does it work? Let’s start with the basics. A Geofence is a layer of intelligence that allows you to make decisions or take some action based on a geographical area. It can circle anything/ any area you like – a retail store, a stadium, a neighborhood. You can build an App-based Geofence that, as the name suggests, requires you have an app to access GPS data. Or you can build a Network-based Geofence that uses carrier-grade location data and is not app dependent.

The most common misconception about App-based Geofening is that once you build your app you will be automatically notified anytime one of your customers enters or exits a Geofenced area. The truth is your customers not only have to find your app in the app store or android market, but that app actually has to be running (and killing your customers’ battery) to know if a geofence has been crossed. Now while app analytics firm Flurry tell us that 80% of American consumers’ time on mobile devices is spent in apps, if you’re constantly accessing GPS data when a customer has your app open they will notice. And they won’t be happy about it. Unhappy customers means lost loyalty and lost share of wallet.

The other disadvantage of App-based Geofencing is the additional upfront (and maintenance) cost for the app itself (the average cost for a mid-range app can range between $50-$150k).

Now I don’t want this post to take away from the brilliance of Geofencing. Understood and used correctly it can double the ROI on your marketing campaigns, increase the loyalty of your customers, and reduce operational expenses. A Geofence is a highly effective way to send locally-targeted, relevant content to your customers at times that most benefit your business. Run a happy-hour? You only need to look up the location of your customers and send them a promotional message once a day to drive traffic. Sales slow between 10-11am? Look up the location of all customers in the area at 9.30am and send them a coupon to redeem when they buy something in (what used to be) that slow hour.

Back to the comparison between App-based and Network-based Geofencing. With Network-based Geofencing you don’t need an app to run a Geofence campaign. As I stated earlier, building and maintaining an app is expensive. And even if your customers download it, if they don’t open it and run it when they’re in your Geofence it’s irrelevant. Not to mention apps only run on smartphones. Yes, smartphone adoption may be on the rise but over 40% of the population are still using feature phones. That’s a lot of people you can’t target with an App-based Geofence campaign. Network-based Geofence campaigns can target any mobile user connected to a cellular network. And the more people you can target the more effective your campaign will be. There are also no upfront costs involved. Cost is determined on a per-location lookup basis and can be dialed up or down as required.

In summary, use Geofences. They work. Just be aware that they may not do what you want, when you want and how you want unless you get the right one that fits your location-based requirements.

To summarize the comparison and help you decide if App-based Geofencing or Network-based Geofencing is the right choice for your business, Locaid, the world’s largest LaaS (Location-as-a-Service) company, has created the following comparison chart.

Mobile promotions and couponing are increasingly becoming standard practice. In a Mobile Commerce Daily article, Rimma Kats states: “Mobile coupons are disrupting the traditional print circular method of distribution as more marketers and retailers are incorporating them into their strategy to build loyalty, drive in-store traffic and possibly combat showrooming.”

Mark Walsh at Online Media Daily estimates that “by 2017, roughly three-quarters of promotions will be targeted toward mobile devices. That includes $9 out of every $10 spent on digital discounts, two-thirds of all digital couponing and almost all spending on online sweepstakes and contest spending.”

Last year we blogged about the benefits of mobile couponing to you and to your customers. To recap:

Advantages of Mobile Coupons for Customers:

• No scissors required. You can’t run with scissors, but you can run with your smartphone to redeem the coupon that just popped up!
• Less waste. Mobile coupons are digital, meaning less paper waste.
• Coupons will be fun. Before, coupons were reserved for household items, such as ketchup, cat food, and cleaning agents. Snooze. Now, coupons sent to you can have the variety of daily deal sites, with discounts on social outings and fun local events, all with seamless redemption.
• They will be targeted to YOU. Mobile coupons, like mobile advertising, will be tailored to you. For example, you can sync your phone to your loyalty membership program (club card) at your grocery store. Your purchase history can then be used to offer mobile coupons on products you may like, introducing you to new products. This is like the “Netflix Recommends” feature of mobile coupons, which has always lead to good discoveries for me.

Advantages of Mobile Coupons for Retailers:

• Secure. Mobile coupons can’t be duplicated.
• High redemption rates. Mobile coupons have redemption rates as high as 30%, vs paper coupon’s 2%.
• Excellent tracking. Instant access to who redeemed the coupons, where they were, and at what time.
• Instant insight into ad campaigns. Instantly see how successful a coupon campaign is and who it’s working with.
• Low Cost. Digital coupons are less expensive to distribute than paper.
• Enhanced data. Redemption data will be linked to purchase history and customer type, allowing for more precise research and future campaigns.

Mobile marketing allows a customer’s location to be a data point in determining which promotion to send and when. This allows for ads to be tailored to a customer’s real-time location, increasing open rates and redemption rates.

Mobile marketing, promotions, advertising and couponing isn’t going away anytime soon. Keep location at the center of your strategy to optimize both the ROI of your campaigns AND share of your customers wallets.

The average age at which kids receive their first cell phone is 12 years old, and 70% of kids under 12 have used a mobile device.  Teens report using their phones to text, take and share pictures, share videos, and visit social networking sites. The widespread use of cell phones and their multiple capabilities highlight the importance of teaching safe guidelines for mobile usage.

This leads to the next interesting highlight from CTIA’s infographic. There is a remarkable difference between the percentage of adults who believe they know what their children are doing online (91%) and the percentage of teens who agree that their parents know what they’re doing (62%). That’s a 29% gap between the two parties, meaning that roughly 1 out of 3 adults think they know what their teen is doing online, but is mistaken.  The best way to ensure online safety is to discuss responsible behavior and set guidelines for online and mobile usage.

It’s important to remember that while mobile phones can lead to risky behavior for teens, they can also act as security devices. Life360 recently paired up with Locaid to deliver something priceless to parents in the US: peace of mind. Life360 allows parents to monitor their child’s location and communicate with them in emergencies.

Parents can watch their children walk home from school and ensure sure they get to their friend’s house safely. And if disaster strikes and phone lines go down, parents are still able to locate their children. As Nathanial Mott wrote in PandoDaily, “the ability to quickly locate and communicate with family members could be a literal life-saver during a disaster.”

Better yet, Life360 works for feature phones as well, so it’s a great option for parents who want to keep track of their kids without giving them a smartphone.

While many are quick to label cell phones as a danger to our youth, we see them as powerful safety tools. Cell phones allow family members to communicate and locate each other instantly – we’ve never before had this capability. Use these features to your advantage while teaching your children how to use them responsibly, and you’ll be wondering why they didn’t have cell phones sooner!

Why? Location-based advertising lifts response rates with relevancy. That’s why the mobile ad networks are boasting 5x lifts in CPMs when a lat/long turns a campaign into high click-through rates. Expect to pay hefty premiums for location-based ads over the next three years.

Should you pay to play in LBS?

You want relevance, you want to reduce spam and annoyance in your customer ranks, you want meaningful click-throughs and mobile purchasing and drive-to-action. All of which means you have to fatten up your mobile marketing budget. Mobile is innovative and effective and, as a result, expensive. The question is how can you cut through the hype and negotiate a good deal on mobile marketing, stand out from the noise and drive the growth of your business all at a high ROI?

Each week I meet with CMOs who share their mobile concerns and plans. Here are the three “Must-Do’s” I always hear:

Get high on smartphones and tablets. There are 1.2 billion smartphones in use worldwide today. It’s not a phone. It’s a computer, camera, browser, shopping assistant, communicator, game platform, wallet, tracker and more. Think beyond your app. While smartphones present a marketer’s dream and endless opportunities to reach out to customers via a device they voluntarily interact with daily, consider this: how is that smartphone or tablet integral to my customers’ lives? And how can I make my brand and products relevant in that relationship?

Go deep on relevance. You’ve probably realized that your mobile app and mobile-friendly website is no longer enough. Daily, as I speak with my company’s clients, they tell me about abysmal download and engagement rates for their apps. My first question to them – are you offering anything that a customer needs? Or are your just pitching your stuff on a smaller screen? Be relevant.

Go wide on location. Knowing the location of your message/offer/service is the #1 way to be relevant. Any mobile campaign you’re running without location should be stopped immediately. After you add location, you will double your ROI at a minimum. Location not only enables greater personalization but adds a layer of verification to help prevent fraud and reduce the unnecessary admin costs of many mobile marketing campaigns. And use geofences. Geofencing provides a unique opportunity for you to target your ads at nearby consumers. When a customer enters a set radius, you can push a discount on that customer’s favorite item through your mobile application. Combine the use of geofences with a targeted mobile advertising strategy and you will increase engagement, footfall and ultimately, wallet share.

So start putting on the LBS. Get high on smartphones and tablets, do deep on relevance, and go wide on location… and start fattening up your mobile marketing ROI.

Locaid is helping 7 of the top 10 banks to reduce fraud, stop identity theft and reduce false positives. How?

Locaid uses the location of your mobile phone as an additional layer of verification. If your mobile phone is in the same location as the one the transaction is initiated in, it’s most likely legitimate. However, if your mobile phone is in San Francisco and the credit card is being run in New Jersey, there’s a good chance that it is an illegitimate transaction. Your bank can then plug that data into an algorithm to determine if a fraudulent activity flag is necessary. Watch me explain in in less than 60 seconds here.

Consumers would need to opt-in for this feature, preventing banks from tracking their customers’ mobile location without them knowing. Locaid’s solution meets the strict requirements of the FTC’s Mobile Privacy Disclosures.

As a CLO, it’s amazing to me that banks and merchants have this technology at their fingertips, and yet it is not being used. Credit card fraud is rampant, and it’s not cheap. A 2009 Lexis Nexis study found that, “Merchants in the United States are losing approximately $190 billion a year to credit card fraud… Banks lose $11 billion and customers lose about $4.8 billion.” If that’s not raising a red flag in the annual review, I’m not sure what is.

The money spent on fraud in the US is eye opening, and that doesn’t factor in the time it takes resolve a fraud claim. Our research shows that it takes an average of 21 hours for a consumer to resolve a claim.

I’ve had fraudulent activity happen on my cards, and it always occurs thousands of miles from where I am. And that’s only the fraud I’ve noticed. Unfortunately, 65% of fraud goes undetected. Using location as an additional layer of verification is the smart thing to do for your business, your customers and your profits.

Today it is estimated that 85.8% of the worlds population has a mobile subscription, nearly 6 billion people. By 2015, it is assumed that the number of IP-ready devices that will be connected to the internet will grow to a total of 6.6 billion (source: ITU).

Wireless carriers have enjoyed riding the upward trend of both feature and smartphone adoption over the past 10 years, but as mobile phone adoption rates level out, wireless carriers need to find additional ways to get customers to use their networks. And for the carriers the hope is that those services will become as much a part of our daily lives as our phones have.

So what’s in the pipeline and what do CLO’s need to know?

1)      In March, AT&T is releasing Digital Life, which allows users to monitor different aspects of their home from remote locations. Customers can remotely control security systems, lights, door locks, and thermostats.

How can location help?

If a customer’s cell phone and car are not at home when a home security system goes off, it is a much higher probability that it is a legitimate alarm. Locate the cell phone and you can make that call quickly.

2)      Similarly, at Mobile World Congress this week, Qualcomm demonstrated a connected home in which a smartphone can be used to start a coffee maker and speakers burst into sound when you enter the room, thanks to the handset in your pocket.

How can location help?

You don’t want just anybody using your coffee machine. Use location to verify the identity of the person making the coffee…. And program the coffee machine (or the speakers… or anything else connected) to only work via that person’s device.

3)      OnStar provide a security service for customers to track stolen vehicles and works with the police to attempt to recover it.

How can location help?

Even when your car is turned off and parked overnight in your garage Locaid can locate it via a cellular network.

Network-based technology will soon be an even bigger part of our everyday lives. Being able to locate anything that is connected to a network, including the internet, is going to be critical. With the ability to locate nearly 5 billion devices Locaid can find them all.