The Marketer’s Guide to Beacon Technology & How it Will Impact Business

Beacon technology is the new kid on the block.

And it has the potential to completely revolutionize both business and marketing.

As one Business.com article put it, with “retail going digital and digital media coming to retail,” this technology could completely change the game.

Has it done so already?

Not quite yet — but the prospects look quite good.

The key to the versatility of this location-based mobile technology lies in its size and function.

It relies on small devices (beacons), often the size of a postage stamp, using Bluetooth Low Energy (BLE) signals to transmit information to mobile devices via mobile apps.

So, what does this mean for marketers?
It means that using this novel technology can potentially make your job easier and make your efforts much more effective.

It means that using this novel technology can potentially make your job easier and make your efforts much more effective.

Why?

These tiny devices are full of robust insights and data. They’re virtually a one-stop-shop.

Plus, they remove many hurdles associated with traditional marketing efforts.

All a customer has to do is download one little app and — BOOM!

You have the ability to deliver timely, relevant, highly specific information to them at opportune moments.

It’s taking personalized, dynamic marketing to an entire new level.

While the technology hasn’t quite taken off at the pace that has been initially projected, it is steadily growing.

And experts predict its popularity to skyrocket in the not-so-distant future.

So, I’m here to get you up to speed on beacon technology, its growth in industry,  and its potential impact on business.

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Step 1: Catch up on the hype

Beacon technology first gained popularity back in 2013 when Apple unveiled the iBeacon.

Since this release a few years ago, Google has created its own version specific to its user base, which is called Eddystone — to keep up with the Joneses, of course.

Retail is the most popular example of an industry that is rapidly adopting beacon technology.

But, it doesn’t just end there.

Beacon technology is showing up in practically every vertical due to its versatility.

While the technology has been slower to catch on than initially expected, Business Insider Intelligence predicted a total of 4.5 million active beacons in the U.S. by 2018.

When commenting on beacon technology, the Harvard Business Review coined it as “the missing piece in the whole mobile-shopping puzzle.”

And according to one recent report by Markets and Markets, the location-based services (LBS) market is projected to grow to as much as $77.844 billion in the next four years.

Proximity.Directory’s Q1 2017 Report also noted that beacons are the most popular proximity technology in the industry.

Coming in second was GPS/Geofencing at 58% and Wi-Fi in third at 35%.

The report also noted that this trend is not solely applicable to larger corporations.

Even small businesses “can increase an operating profit by 8% with a ROI of 365%” by making use of this technology.

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So, now that you know beacons aren’t going away anytime soon, let’s move on.

Step 2: Learn the basics

To appreciate the amazing marketing potential of beacons, it’s important to understand how they work.

Location-based mobile customer communication enables businesses to communicate information in a timely manner via mobile apps to consumers within range of a beacon.

Beacons communicate with these mobile apps via BLE signals, which as I mentioned above, stands for “Bluetooth Low Energy.”

While it may sound like the same thing, BLE is a variation of the Bluetooth standard and differs from the traditional Bluetooth you and I both know in a few ways:

  1. BLE uses much less power than Bluetooth.
  2. It constantly remains in sleep mode except for when a connection is made.
  3. Unlike Bluetooth, BLE is not made to handle large amounts of data.

Check out this in-depth chart for clarity on the differences:

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In order for a beacon to communicate via BLE with an individual, four things must happen:

  1. The user must download an app that supports the technology.  This usually comes in the form of a rewards app such as Shopkick. Some view this need for action as a potential hurdle.However, with an estimated 90% of smartphone users having at least one subscription to a rewards program, it may not be as significant as many people think.
  2. They must have Bluetooth enabled.
  3. Location Services must be activated.
  4. They must be within the beacon’s signal range. This enables the technology to ping a mobile app within range with pertinent information and services.

Step 3: Understand the core benefits of beacons

While there is a variety of benefits that beacons deliver, there are 5 in particular that are worth mentioning here.

1. They are versatile.

First-generation beacons were about the size of an apple.

Now, beacons come in a variety of shapes, sizes, and colors. Some are even UV and water resistant so that they can withstand the outdoor elements.

One beacon manufacturer, BlueCats, creates cat-shaped beacons.

Others let businesses customize their orders by size, as well as adding their name and/or logos.

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Some come in the form of a USB, and others are as small as a postage stamp.

Beacons can be made to fit the needs of almost any business.

Think about it: a beacon the size of a stamp can be placed practically anywhere — like a retail store wall, inside a car on an auto lot, or in the entryway of your local coffee shop — and used for virtually anything.

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2. They are secure.

One thing that differentiates beacons from similar technologies such as Wi-Fi, RFIDs, GPS, or NFC is the level of security they have.

Beacons primarily broadcast outbound signals, so there tends to be far less of a security risk associated with them.

They also send a unique code that can be read only by certain mobile apps.

This code must be authenticated with user permission (AKA with your knowledge and consent), which means you have to manually accept it.

Technically, beacons with weaker security could have a higher potential for hacking.

The good news is that most manufacturers have put measures in place to prevent this from happening.

In fact, the risk lies less in beacons and more in the apps that are transmitting these signals.

So as long as you are using secure apps, you should be in the clear, and generally speaking, much better off in terms of security than a public Wi-Fi network.

1. They are precise and have great range.

Perhaps the shining selling point of beacons is their ability to reliably target mobile devices inside buildings.

While GPS is great for location tracking in general, and Wi-Fi comes with all the benefits of cell towers, they aren’t quite as precise as beacon technology when it comes to targeting consumers in-store, in specific areas, and in front of specific products.

GPS needs to be used with other location-based services (LBS) due to its line-of-sight issues when it comes to indoor use. It’s much better suited for outdoors.

Wi-Fi only has a range of about 46 meters when used indoors and NFC (near field communication) can only operate well within a range of about 4 centimeters.

Beacons, on the other hand, come in a variety of ranges and have been specifically designed to work well both indoors and outdoors.

They can transmit from 1 to 70 meters and up to 450 meters in some cases.

Generally speaking, the smaller the beacon, the lower the range.

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2. They are efficient.

Beacons are known for their efficiency.

Proximity.Directory noted in a recent report that manufacturers who use the technology can cut costs and improve efficiency by tracking material flow as well as queue and cycle times.

The report also noted that hospitals can save hundreds of thousands of dollars every year by using beacon technology.

Beacons are equally as effective whether the partner app is active or not, because it’s always on and constantly transmitting a signal.

Other advantages include:

  • It’s less expensive, on average, than traditional Bluetooth or RFIDs — around 60-80 percent, to be exact.
  • It’s more energy efficient than Wi-Fi, GPS, traditional Bluetooth, or NFC.
  • It doesn’t require pairing.
  • It works accurately indoors, eliminating the need for supplemental LBS devices.

3. They offer a variety of insights.

Among other things, beacons can monitor temperature, humidity, weight, traffic, and interactions.

They are literally information sponges.

With the right analytics in place, you can gather solid user-generated data and insight.

For example, you can measure the number of beacon hits over a certain period of time.

You can also create heat maps to measure foot traffic and length of time spent in a specific beacon’s general area.

These are just basic examples of how you as a marketer can use beacons to gather targeted and very specific information about foot traffic.

The possibilities, however, are endless.

It really all just boils down to creativity and application.

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Step 4: Embrace the more advanced benefits of beacons

Now that you understand the foundational benefits of beacons, it’s time to dive into a few of the more advanced benefits.

Beacons promote effortless engagement and data transmission.

Once the mobile app is downloaded, you can push messages to your audience without having to jump through hurdles.

This translates into less work for you and less work for the consumer.

Many people have voiced their concern about the possible downside of a mandatory app download.

And it is a legitimate concern since it could very well be argued that the average consumer places a higher value on their mobile device than they do on the benefits they receive from a retail mobile app.

To try and combat this, you’ll need to have a well-planned content strategy that includes engaging multimedia to create an invaluable experience that people will want to be a part of.

Hudson’s Bay Company (HBC) decided to use a SnipSnap coupon app to promote offers and messages to customers in-store.

At first, it may seem a bit odd to use a third-party app.

But in reality, it’s quite genius.

Here’s why:

  • It was cheaper than developing their own app and marketing it.
  • SnipSnap was established and widely used. Consumers were more likely to already have it installed on their mobile devices.
  • Their decision helped them acquire new customers via the in-store beacon program. It was targeted toward consumers who already had the app installed but weren’t existing customers.

So, as you’re evaluating your options, keep in mind that it may be better to use an established third-party app as opposed to creating one on your own.

By doing this, you’ll side-step unnecessary hurdles and improve your conversion rates.

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Beacons are dynamic, highly personalized, and can lead to better engagement.  

When you can track where a customer is, you can promote specific products and information at just the right time, which can boost engagement significantly.

This increases the effectiveness of your marketing efforts and takes “personalized” to a whole new level.

For example, let’s say you have a customer approaching a jewelry counter at a local department store.

With beacon technology, relevant content about certain items for sale can instantly be sent to their smartphone via the mobile device app, which can help to generate more leads and drive sales.

Beacons give marketers an opportunity to adapt to the “new” buyer.

Perhaps one of the most difficult hurdles many marketers face is figuring out the “mobile shop-and-compare strategy.”

With endless information available at their fingertips, consumers are savvier than ever with their purchasing decisions.

I’m not saying that this is a bad thing, however.

Quite the contrary — it’s great for a number of reasons.

Not only does it protect consumers by keeping them well-informed, but it also facilitates healthy competition.

In doing so, it simultaneously drives quality while shaping savvier marketers who bring more dynamic strategies and tactics to the table.

So to help you brainstorm ways in which you can use beacons, I’ve listed a handful of examples of how other businesses are using them successfully to drive engagement and sales.

Step 5: Study some of the more creative ways businesses are using beacons

Organizations ranging from Major League Baseball to Hillshire Farms are all taking advantage of the amazing power of beacons.

Promotions in the form of offers, deals, and giveaways are the most readily available examples of use that come to mind when thinking of beacon technology.

But it doesn’t end there.

One company that yielded pretty amazing results using a different strategy was NOMI.

They measured new customers acquired through a music festival sponsorship by tracking check-ins via beacons.

With the help of beacon insights, they were able to track 1,300 new customers based on the data provided.

Prism is another great example of how beacons can be used.

They were able to track which areas of a store customers gravitated toward by using heat maps generated by beacons.

As a result, they reassessed merchandising strategies and placed slower moving products in higher traffic areas to generate more sales.

When Hillshire Brands decided to use beacon technology for the release of American Craft link sausages, the response was over-the-top.

Their agency did an analysis of the event and found that purchase intent increased twenty-fold, and the number of in-store engagements hit 6,000 in the first 48 hours alone.

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The travel and hospitality industries are embracing the power of beacons as well.

Virgin Atlantic uses beacons to remind passengers to have their boarding passes ready when approaching security checkpoints and to notify them of entertainment specials before boarding.

They even use data transmitted from beacons to monitor cabin temperatures and alert staff to pass out blankets when it gets too cold.

Concierges at Starwood Hotels & Resorts use beacons so that they can greet guests by name upon arrival.

They are also used to notify housekeeping when guests are in their rooms.

Starwood even lets guests skip the check-in process and gain keyless entry via smartphone to their rooms, which is possible because of beacons.

All a guest has to do is download a partner app and open the door by “tapping or gesturing with their device once they arrive at the door.”

Another business that has made creative use of beacons is dating app Mingleton. The company uses the technology to share dating profiles with other users when within a certain radius via a “See Who’s Nearby” feature.

The possibilities truly are endless and extend far beyond traditional push marketing strategies.

Savvy marketers are coming up with innovative and functional ways to use beacons.

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This can help with branding and better engage a specific customer base.

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Step 5: Be proactive and formulate a plan of action

There’s no better time than now to start strategizing how you can use beacons to market your business.

While the technology may not be catching on quite as quickly as initially planned, the truth of the matter remains that it is catching on.

Now, more than ever, people have a strong preference for dynamic and highly personalized content.

In fact, the 2016 Content Preferences Survey Report found that a whopping 84 percent of consumers confirmed this preference for “interactive/visual content that can be accessible on demand.”

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So be proactive, stay on top of the beacon technology trend, and take advantage of the many ways in which you can make it work for you.

To start, develop a well-thought-out strategy.

Much like marketing in general, you can tackle this task in one of two ways.

You can wing it.

For many, winging it seems exponentially easier and a much more effective use of time.

After all, time is money, right?

The reality is that when you simply “wing it,” you’ll end up disorganized and scattered.

The end result?

You’ll waste valuable time and energy trying to tie everything together.

Or you can be prepared.

Savvy digital marketers are much like savvy writers.

They understand that planning is the key to a fruitful and effective strategy.

While planning takes time and energy that could initially be spent on action, the end result is measurable, calculated, and completely within your control.

If you take the time to plan out your steps to a T, you’ll wind up with effective results that deliver serious ROI.

Here are a few things to keep in mind when it comes to implementing beacon marketing strategies:

  1. Think long-term. Beacons can be invaluable tools for gathering information, analytics, and outreach.

Don’t just jump toward your end goal. Take time to strategize and plan for both short-term and long-term gain.

  1. Think contextually. Placement is perhaps the single most important factor when it comes to beacon technology.

Strategic placement and well-planned messaging mean an increase in relevancy, timeliness, and effectiveness.

So be sure to get all of your ducks in a row and think in terms of context when it comes to your marketing strategy.

  1. Think like your target demographic. Put yourself in their shoes. What content would you want to receive? What messaging would you find useful and effective?

Stay away from aggressive and overzealous tactics.

Otherwise, you’ll come across as spammy.

Give people useful and engaging information instead.

Check out this video where I discuss some quick and effective strategies that will help any marketer generate a solid marketing plan.

Conclusion

There’s no doubt that beacon technology has the ability to revolutionize business and marketing.

And based on the positive returns businesses like Hillshire Farms and Starwood Hotels & Resorts are already seeing, I think it’s safe to say that beacons aren’t going anywhere anytime soon.

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I’ve done my part and given you a step-by-step guide to get you all caught up on the beacon technology trend.

Let’s review:

Step 1:  You’ve caught up on all the hype.

Step 2:  You know the basics.

Step 3:  You understand the benefits.

Step 4:  You understand the more advanced benefits.

Step 5:  You’re up-to-speed with creative ways other businesses are using beacons.

Step 6:  You’re going to be proactive and create a strategy.

So, the question then remains — are you going to take action?

The ability to diversify and adapt to an ever-evolving climate is essential to your success as a digital marketer in the business world.

By learning how you can harness this trend to fit the needs of your unique situation, you can remain one step ahead of the game — which means you’ll stay one step ahead of your competition.

Are you currently using beacons in your marketing efforts?  If so, what’s working for you? What’s not?

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