Proximity marketing: Best practices for QSR companies

Proximity marketing is a powerful but complicated process for new and established quick service restaurants alike.

This ever-advancing technology uses consumers’ mobile devices, specifically apps, combined with message-delivering beacons, to push notifications to consumers when they’re close to a location. It can also be used to introduce new and curious consumers to a QSR when managed through a third-party mobile app. Following proximity marketing best practices will ensure that your campaign will make the most impact while minimizing the time and financial investments required.

QSR companies are challenged by the limited window in which they have to gain a consumer’s attention, which is why mobile proximity marketing is an ideal strategy for them to implement. Via proximity marketing, they can reach potential customers in those valuable moments before they make a decision about where and what to eat. However, there’s still some room for error on this platform. A poorly executed proximity marketing campaign may do more harm than good. When rolling out a new campaign based on proximity marketing, there are three best practices that all brands should follow, as outlined below.

Proximity Marketing Best Practices #1: Establish Campaign Success Metrics

Prior to launching a proximity marketing campaign at your restaurant, you must clearly define the metrics you will use to determine success. Mobile app-based marketing allows QSRs to receive data in real time which can be used to measure and determine the effectiveness of a campaign—but, clear goals must first be set. This will allow you to recalibrate as needed to ensure that your proximity marketing campaign is targeting the right consumers in the right moments.

Some common QSR company goals for proximity marketing campaigns include:best practices for proximity marketing in QSR

  • Increasing QSR location traffic: For this, the key metric would be how many incremental consumers entered your restaurant, either at the counter or via the drive-thru. In addition, you’d want to consider the average basket size for those visitors.
  • Profitably introducing a new menu item: This is a notification metric which can be measured at each visit by pushing the notification of the new menu item and then calculating how many said pushes resulted in how many sales.
  • Retargeting restaurant visits to increase average order size: Consumers may have come in for one item on your menu, but through the permissive use of their data, you’re able to entice them to purchase additional items from the menu. For example, their interest in your brand’s coffee could also indicate an interest in a new breakfast item. An example of this retargeting in action can be seen through Rite Aid. Rite Aid installed approximately 4,500 beacons in stores for this purpose, as well as to create better, more personalized services. By working with a third-party mobile app partner, the company gained access to a wide range of app users they wouldn’t have been able to communicate with otherwise. While the store did not release its numbers from the campaign, it’s been noted that the use of beacon technology can increase operating profit by up to 9%, much of which comes from retargeting customers.

Knowing what your goals for the campaign are will help make your proximity marketing campaign as effective as possible. Whether your goal is to create a better user experience or build awareness for a new menu item, the use of beacons can allow you to do so while providing you with real-time results. However, as with any campaign, your message should be tempered with prudent use, as we will see in the second proximity marketing best practice described below.

Proximity Marketing Best Practices #2: Make Moderation Part of Your Strategy

Proximity marketing allows beacons to send messages to a consumer’s device if the compatible app is downloaded and installed. Consumers don’t have to be in the app, or even using their phone, to receive them, though. While this is often considered a benefit of any form of mobile advertising, it also comes with a drawback: companies can, and have, been guilty of sending too many notifications too closely together. In fact, in one study it was noted that generating more than one beacon push per location can cause a 300% drop in app usage.

While a customer probably won’t uninstall an app if they get two messages per store visit, once they feel like the app is pestering them, they will begin to ignore it. If receiving too many messages becomes a common occurrence, they may even take to the internet to complain about it. As a result, choose one or two push opportunities per QSR location visit. Even better, you can instead create an opportunity in-store for customers to interact with a proximity marketing campaign by installing a clearly visible beacon and inviting customers to interact with it at their own convenience.

Typically, when a QSR takes this mobile advertising approach, a simple display is set up inside the entryway of the restaurant which notifies the customer of the beacon and invites them to connect with it via their smartphone. This limits the risk that the customer will find notifications intrusive as they’ll be in control of their experience with your campaign. This can gain a customer’s trust for your company’s rewards app by creating a positive and engaging user experience.

Proximity Marketing Best Practices #3: Don’t Rely on a Branded Loyalty App Alone

While many QSR companies choose to use an in-house, branded app when running a proximity marketing program, this isn’t always the best, or only, choice. After all, customers who have your app installed are likely already loyal consumers of your offerings. If your goal is to gain new customers, however, you should look towards partnering with a third-party mobile app.

When McDonald’s wanted to test out a new product in Istanbul, they did so with the assistance of a popular third-party shopping app. Consumers using the app were invited to try a new line of flavored coffees the company was test marketing while they were near a participating location. By the end of the campaign, McDonald’s saw an overall 20% conversion rate based on notifications sent to the app users compared to beverages ordered. Most significantly, 30% of those users purchased the beverage more than once.

By leveraging the pre-existing audience of a third-party app, McDonald’s was able to take advantage of an engaged customer base to gain valuable insights and feedback on a new menu offering. Overall, they saw an excellent ROI on the campaign and received valuable data on how well those beverages would be received in a broader market.

Third-party mobile apps are an important aspect of a beacon-based proximity marketing campaign as they must target not only those who already consider themselves customers of the QSR but those who are potential new users as well. With a third-party partner, QSRs are able to reach out to a new audience, gain their attention, and create a new connection, potentially increasing brand awareness and market share via the app. It’s important to go into these campaigns with a goal-oriented mindset and use them sparingly, but with the support of an engaging third-party app partner, any QSR proximity campaign is sure to convert.

Shopkick uses beacon technology to help our partners leverage proximity marketing and convert casual and potential users to loyal customers. To see what our platform can do for your business, contact our team today.

Image courtesy Tupungato