Beacon technology was supposed to revolutionize the way that businesses interacted with their customers, but so far it hasn't lived up to the hype.
That's not to say that Apple's iBeacon standard, Google's competing open source beacon technology Eddystone and Bluetooth Low Energy (LE) beacon technology have been failures. As with other new technologies, enterprises simply seem unsure of how best to use transmitter beacons, which can exchange signals with beacon-enabled mobile apps running on potential customers' mobile devices
One way they can be used is to detect when a customer comes in or passes close by your business or retail premises. When that happens, a beacon can immediately send out a discount coupon or notification of a special offer to try to encourage that customer to make a purchase.
Yet there's a drawback with this rather crude marketing approach, according to Simon Hathaway, global head of retail experience at Cheil Worldwide, an international marketing company. Most shoppers are on a mission, and what they want is "clarity not clutter," he said.
Here's the problem: "People are already inundated with spam, so it's horrible if they are being bombarded with coupons on their mobile phone," explained Hathaway. "Generally the best use of beacons is not to overtly communicate with customers, but to enhance their experience."
Better Uses of Beacons
Hathaway provides an example. Since beacons can pinpoint the location of any of your customers running your mobile app, they can work with that app to guide your customers to the products they want. (They can also guide customers to cash desks or even restrooms.)
Using location information they can also help identify which products your customers are browsing, allowing your app to call up detailed information such as ratings and reviews. This can be an important weapon against "showrooming:" the practice of checking out products in a retail store before ultimately purchasing them online.
Since beacons can track customers as they move through your retail store, you also can get insights into how the store layout might be improved to make it easier for them to find things and to promote maximum spend.
Analyzing Beacon Data
Doing this requires storing and later analyzing information about customers, and this is the first clue to how beacons can be used more effectively. Rather than using them to broadcast messages to anyone who is running your app, it is better to combine beacon functionality with customer data, Hathaway said.
To optimize the layout of your store, you can use aggregated data about customers' movements. But if you combine data about individual customers - probably stored in a CRM system - with beacon technology, beacons can become the foundation of a highly effective marketing and sales promotion tool.
A basic example of this could be the use of beacons to detect and identify an individual customer as they enter or pass by your store, and then send them a targeted discount voucher or special offer based on their previous purchase history or other information from your CRM system.
"Personalized messages are far more successful than broadcast messages because they have increased relevance," Hathaway said. They are also less likely to annoy customers and prompt them to delete your app from their mobile device, he added.
Connecting Beacons to CRM
You can also use beacons to collect data about customers. This data can flow straight in to your CRM system and then be used in future contacts with customers through a different channel.
For example, if a beacon establishes that one of your customers spends some time in your store browsing baking products but doesn't make a purchase in the next few days, you could email the customer a discount voucher or special offer relating to baking products.
A challenge with beacon technology is customers must install an app on their mobile device which they know will collect and pass on information about them to beacons.
But that is not necessarily a problem, Hathaway said. To persuade them to do so, the mobile app needs to offer them something in return. This could be the prospect of special offers and discounts, or it could be a far more comprehensive app that includes automated payments, a loyalty scheme or anything else a customer may like.
"People will always trade some level of data about themselves if it makes their life more convenient," he said. "And combining personal data with beacons certainly makes apps more effective."
If an app doesn't offer any value that is readily perceived, people likely won't install it; even if it is, there's a high risk that the app will be deleted quickly. (Apps that aren't used are the ones that get deleted, and app usage can be over 16 times greater for users who receive a beacon message compared to those who do not, according to inMarket, a mobile shopper marketing platform vendor.)
Developing Beacon-enabled Apps
When it comes to creating apps, there are a number of ways to go. Larger companies can create their own mobile apps and integrate them with beacons and CRM, or add beacon functionality to existing apps. Companies like Kontakt.io and Estimote provide hardware, software development kits (SDKs) and APIs for in-house developers.
It's also possible to build a solution yourself by integrating different services. For example, companies like Collect Rewards offer apps that integrate with your customer data sources and allow you to send offers to your customers. These can be linked with offerings from other vendors that sell beacon systems, so the messages are sent to customers when particular beacons are triggered.
Another option is using a beacon platform that includes a white-label beacon-enabled app to which you can add your own branding. These are available from many vendors, including Levelup, Bleesk and Beepsquare.
Paul Rubens has been covering enterprise technology for over 20 years. In that time he has written for leading UK and international publications including The Economist, The Times, Financial Times, the BBC, Computing and ServerWatch.