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Where Does Location Tech Fit in CX Roadmap?

6 minute read
Jennifer Torres avatar
Can location tech carve a path to great digital customer experiences?

On the road to mapping the perfect customer journey, CX leaders are constantly seeking to improve digital customer experiences.

In a new Forrester Consulting survey commissioned by Radar, a geofencing platform provider, the most significant CX challenges are ensuring consistent customer experiences across channels (57%) and personalizing customer experiences (54%). Further, the most significant CX priorities over the next 12 months include both creating more personalized customer experiences (83%) and creating in-store experiences that span both digital and physical channels (75%).

Naturally, Radar touts location technology in the report. But, like most paths toward creating digital customer experiences, there are a few potholes for which CX leaders should be aware.

Stacy Sherman, VP of marketing, agent and customer experience for Liveops, and founder of Doing CX Right, said the key is making location tech something consumers want — and even something they need.

“Perfect examples of this are Uber and Lyft,” Sherman said. “People not only enjoy timely alerts based on location data, but now expect to know the time of arrival for other delivery services.”

What Is Location Technology?

When you receive a digital prompt asking for permission to access to your location, it’s all due to location technology. For example, on a walk downtown, your iPhone chimes, and a prompt appears from a nearby beauty shop encouraging you to stop in for a quick makeover. Or you get an alert about the Starbucks down the street is about to start happy hour prices. Location-based technology allows retailers to meet customers where they are — whether they’re strolling around town or searching the Internet for a nearby Thai restaurant.

But to get these prompts, consumers have to give their permission to receive them, and that’s been a struggle with 68% of respondents in the Forrester survey acknowledging that "customers failing to opt into location sharing" represents a real challenge.

In order for location tech to reach its full potential, customers have to use it — which means they must trust it, and many aren’t comfortable enough to immediately accept a prompt without more information. 

Related Article: 3 Ways Businesses Can Level-Up Their Physical Experiences

Location Technology’s Permission Problem

After reviewing its telemetry data, Google found that most permission prompts (85%) are ignored or dismissed, and about 9% are blocked — leaving just under 7% of people who give permission.

Why? Maybe because they’re annoying.

In addition to prompts to sign up for newsletters, share your email address, phone number, consent to cookies, etc. dealing with another prompt that asks a user to make an immediate decision to share location can be overwhelming. The apparent urgency is off-putting, Google officials have noted.

Given this, in February 2022, Google announced a new design to improve experience and avoid unnecessary requests. The goal was to “get out of the way of users who choose not to make a decision, letting them do so without any interaction.”

It uses an animated chip, an icon and a label to explain the permission being requested. When the permission is considered “non-essential,” an immediate decision isn’t required. Instead, the prompt can be ignored until the user has enough information to decide. And if the user doesn’t interact with the prompt, the request chip collapses to a blocked icon that’s eventually dismissed.

As a best practice, Google advises sites provide the appropriate context for users and only request a permission “at the appropriate and expected moment.”

Asif Khan, founder and president of the Location Based Marketing Association (LBMA) in Toronto and founder and CEO of GroundLevel Insights Inc., said getting customers to give access to permission prompts is still an ongoing education problem.

“It comes down to the app or company wanting the data to be very clear in articulating to the consumer why they want it and what they are going to do with it,” Kahn said. “Is there a benefit to the consumer? Nobody argues about Uber or weather apps because it’s clear to us the value we get in return for sharing our location.”

Learning Opportunities

What About Indoor Location Tech?

Don Dodge, a developer advocate at Google, said that 10 years ago, indoor location technology looked very promising and had much potential — but today, there are very few revenue-producing applications.

“It is a solution looking for a problem that people will pay to have solved. The obvious consumer applications make sense but don't have a viable revenue model,” Dodge said. “From an investment perspective, I invested in five Indoor Location companies and all of them were acquired, pre-revenue, by large technology companies to enhance existing products.”

Among his investments: WifiSLAM acquired by Apple, Trusted Positioning acquired by Invensense, ByteLight acquired by Acuity and Iotera acquired by Ring. Dodge said just one, NavVis, is still private and doing extremely well focused on insurance and maintenance of commercial real estate.

Khan said all of the technologies Dodge mentions had promise, but indoor location is much harder because it requires the installation of physical hardware in stores, etc.

“Most retailers are reluctant to do that and also worry about the impact the physical equipment will have on their existing Wi-Fi and payments networks, let alone the share capital cost of the investment," he said. "Whereas outdoor location is much easier to leverage when pulling data from mobile apps and cellular networks that are already in place. That being said we are projecting indoor location tech to grow from a $62.3B market in 2022 to a $92.4B market by 2031 globally. Overall, it’s getting cheaper, and the sensors are coming pre-installed in lighting, shelving, tables, doorways and more — so if it’s there why not use it.”

Related Article: When It Comes to Customer Experience, the Days of Targeted Advertising Are Numbered

Location Tech: Privacy, Personalization and Challenges

In the past, simply knowing a customer’s name was considered “personalization.” Today, it means shaping each step of the customer journey — and by incorporating customer location ranges, retailers can provide prompts in coordination with real-time physical location.

Still, more than half of Forrester survey respondents said personalizing customer experiences is one of their most significant challenges because while consumers yearn for them (and have come to expect them). They are also extremely protective of their own privacy.

Khan said given the privacy climate, many retailers today are moving away from direct one-to-one personalization. “Instead," he said, "they are focusing on targeting cohorts of individuals that exhibit common behaviors in the physical world. For example, give me a list of all the people who are female, between 30-50 that have been to Starbucks at least once this week and have also visited Home Depot.”

When it’s when its used right — Sherman said location tech can be a CX game changer. But there is a caveat­.

“As long as there's full transparency on how consumer data will be used upfront and not buried within the fine print,” Sherman said. “Likewise, people need to be given a choice to opt-in or out at any time. Otherwise, location technology will backfire and create buyer frustration, which is the reverse of what's intended.”

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