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Customer engagement – are beacons really worth the hype?

By / / In Insight /
Despite all the buzz around beacon technology as the new and exciting frontier of customer engagement, are marketing messages and promotions sent as part of a pre-existing transactional conversation still more effective and less intrusive?
customer engagement life events

It’s at this time of year where marketers put forward their thoughts and predictions for the months ahead and in the various 2017 digital marketing predictions pieces I have read, one technology for customer engagement in particular keeps cropping up – beacons.

It’s not hard to see why. Beacon technology has the potential to dramatically enhance an individual’s shopping experience, making it quicker and easier for them to access the goods and services they want. Brands can also push targeted special offers or discounts to their loyal shoppers’ smartphones, using the data they hold on their customer’s shopping habits, as well as delivering advertising campaigns that are directly relevant to a specific customer. By treating them as individuals, brands are able to better build strong relationships with their customers – meeting their wants, needs and desires – in a world where loyalty is increasing becoming obsolete.

Barriers to adoption

In theory, the benefits on offer are hugely rewarding but, in reality, for the implementation of beacon technology to be successful, retailers have a significant hurdle to overcome – they need customers to voluntarily download and install an app onto their smartphones for it to work. And not enough people are downloading these apps to make them commercially viable marketing tools in their own right. While supermarkets that chose to install tablets in trolleys may benefit from sending in-store location based messages, this requires a significantly greater outlay on hardware and, for all but those with the deepest pockets, may end up being cost-prohibitive.

So, despite all the talk and hype surrounding beacons, we could argue that, with the exception of some very narrow use cases, they haven’t worked as well as we all hoped for proximity marketing. While there is still value in using beacons for post campaign analysis, consumers still feel like they’re a bit intrusive and are often unwilling to share their location with apps they need to download onto their smart device to enable the interaction.

So what’s the alternative for customer engagement?

Firstly, marketers should look to include marketing messages and promotions as part of a pre-existing transactional conversation – be it through SMS or email, for example – between the customer and organisation. This method of customer engagement is not only a less intrusive alternative to location based marketing, but research has shown that these messages have a far higher open rate than unsolicited broadcast messages. Given that these messages are based on a pre-existing relationship, they are much more likely to be better received by customers.

Secondly, marketers would do well to take note of the rise and evolution of private social networks and messaging apps when it comes to their customer engagement strategies. WhatsApp, for example, now has more than a billion users and 900 million people use Facebook Messenger. In fact, this trend of moving away from public social media to more private messaging apps has grown so much that it is reported the combined use of the top four messaging apps now exceeds that of the top four social media apps. With apps like Messenger now a pervasive component of everyday consumers’ lives, it is becoming increasingly important for business to take seriously their potential for engaging with customers.

But what we are seeing now is that chat apps are lining up to build additional features behind their core service of private messaging between individuals. For example, apps such as WeChat (pictured) now enable users to share music thanks to an API that links the app with iTunes and Apple Music.customer engagement

This evolution of chat-apps is opening up exciting new opportunities for businesses wishing to engage with customers and prospects. With three times the number of OTT messages sent every day compared to SMS, the number of instances where they become the most appropriate form of engagement is constantly growing. SMS, with its industry leading high open rates, still has a place in the communications waterfall, but 2017 will be the time for businesses to develop innovative engagement campaigns that rely on an increasingly ubiquitous communications channel.

Rise of the robots

Lastly, when Facebook opened up its Messenger platform to chatbots in April last year, the use of artificial intelligence (AI), and the process of machine learning to enable ‘bots’ to assume a customer engagement function, was pushed into the mainstream. And this technology opens up enormous opportunity to improve customer engagement. AI essentially helps businesses recognise patterns, learn from them and enable better decision making in ways, faster than we have ever known. Thanks to improvements in big data technology that enable real time decision making, it will become increasingly difficult for even the most discerning consumer to identify whether or not they are in communication with a real person, or a machine.

As more money is invested into AI, the days of marketers manually segmenting lists to target categories of customers will be long gone. Marketers will instead rely on cloud-based customer engagement solutions to select the most appropriate communication channel and message to reach their customers in more targeted ways than ever before. Over the next 12 months, consumer experiences with brands could be transformed, as organisations and marketers use this technology to better understand their customer’s preferences, engage in deeper interactions and communicate to them in more contextually relevant ways.

It’s an exciting time to be in marketing, especially with so many advancements in technology offering new ways for brands to engage with their customers. With this in mind, the benefits offered by beacon technology to push targeted messaging to customers are undeniably hard to ignore. However, to invest solely in this technology is limiting. It will be those companies that look more broadly beyond beacons – to chat apps and adopting AI technology – that will find themselves in a much more advantageous position, as they improve the overall customer experience with their brand at every single touch point.

Read also: 

Data personalisation tips: how to be ultra-relevant

Customer loyalty: have brands lost sight of what loyal customers crave?

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Author: Xavier Legrand

Product manager at Engage Hub.

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