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Location, location, location! That phrase has morphed over the years. “Location-based” marketing strategies have focused on physical location, newspaper ad placement, billboard location, postcards or mailers sent to targeted zip codes, and even SEO. The main drawback of those strategies is that they require a lengthy analysis period and can be costly. Even SEO, which was thought to be a lower-cost alternative to traditional marketing media, can accrue expenses quickly based on ad category and click-through rates. In addition, all of those methods utilize passive marketing campaigns. Yes, even SEO marketing is passive, despite being digital, because the end-user must enter a search term and scroll to where a credit union is listed in the results.

Today, location, location, location has a bit of a different marketing angle than days gone by:

1. Location - the geographic area that the credit union has used for their campaign,
2. Location - the transaction history of where a member has made purchases, and
3. THE location - when the member crosses the threshold of a geofenced area or enters a store included in the location-based campaign

Now comes the zinger associated with today’s location-based marketing. The offer (or reminder of an existing offer) is delivered in real-time. The traditional “location, location, location” strategy is replaced with “the right place, at the right time.” Consider sending a home equity preapproval offer mailer or email to a member based on the available equity in their house. Maybe they have viewed the offer and will remember it in a particular circumstance. Maybe. Still passive. Now consider that the same member is walking into a home improvement store, and their credit union’s location-based campaign includes home improvement stores as a marketing offer trigger. When the member enters the store, a text is sent informing (or reminding) the member that they have been pre-approved for a home equity loan with the credit union. Right place, right time.

There are plenty of age and income profile providers available. Traditionally these providers have created consumer target profiles like “Dual Income, No Kids” or “Retired Investor.” These profiles may have been valuable in the past, but people just don’t fit those types of molds anymore. Life is too fluid, and profiles based on age, income, financial products used, or family status don’t work effectively as criteria for marketing campaigns. A Dual Income, No Kids profile cannot predict family plans, and a potential second home for members considered a “Retired Investor” cannot be predicted by the savings instruments they use.

Purchase behavior or areas a consumer repeatedly visits can be more accurate predictors of their next major life event. In the case of Dual Income, No Kids members, transactions at baby furniture and home improvement stores over a short period of time are likely a predictor of a new addition to the family. That data can be used to set up a location-based campaign for a bonus credit card points reward campaign or immediate credit line increase. Once that campaign is launched in the credit union’s channel(s) of choice, the trigger reminding the member of the offer can be presented whenever they walk into either of these types of stores. This location-based strategy is both an offensive and a defensive play. Offensively, the member will increase balances. Defensively, the member does not fall prey to a competitor’s offer presented at the point of sale offering “bonus bucks.” Your card reward points are much more flexible across all purchases. In contrast, bonus bucks are limited to a particular retailer or chain.

Now let’s turn our attention to the “Retired Investor.” How can location-based marketing be used? Think about this scenario: Review of a member’s transaction history may reveal the onset of outlier spending activity at coffee shops or restaurants clustered together outside of the member’s normal retail spending patterns. Perhaps they’re house hunting in that new area. If there is a balance on their first mortgage, a mortgage refi campaign may be a smart play. Once the campaign is launched, the credit union could create a geofence (think about drawing a circle around a geographic area), including the areas where the restaurants and coffee shops are located. When the member enters the geofence, a mortgage refi offer or reminder is sent to the member’s cellphone.

This is both an offensive and a defensive strategy. Suppose the member wants to sell their current home and purchase a new one. In that case, the refi offer is defensive because it presents a financing option with your credit union, where they already have a mortgage relationship, and the credit union can retain that loan relationship. The offer is offensive because if the member is looking to purchase a second home, the refi offer reminds them that the credit union can offer a mortgage for the second home OR the member can use cash from the refinance of their first mortgage for a down payment on the second home. In either scenario, the reminder is presented at the right place and the right time to a mortgage prospect who would never have been identified using traditional age and income categories.

At Connect, we realize that a member’s mobile phone is more than a digital banking channel. And your competitors (other financial institutions, fintechs, and finance companies) realize that too. But you have something those other competitors don’t have—transaction data. In this age of one-to-one marketing, the offer better be relevant and fulfill an actual need. Location-based marketing campaigns designed around member transactions present a relevant product offer and trigger that offer when the member is engaged in the defined purchase behavior. Fintech payments companies may have general purchase behavior, but they don’t have the product arsenal or trust associated with traditional financial institutions. So maybe location is everything after all!

Connect’s location-based marketing partners enable a member’s cell phone to be a cost-effective channel for creating one-to-one marketing campaigns. To learn more about location-based marketing services, please reach out to your Connect Account Manager or email sales@connectfss.com.