Working the Local Angle: Benefits of Location-Based Technology

By Tammy Mastroberte, Contributing Editor | March 06, 2015

With the rapid adoption of smartphones in the United States, marrying marketing with technology and location can bring in more sales and satisfied customers for restaurant and hotel operators. As of last year, two-thirds of Americans owned a smartphone, according to The Nielsen Co.,
and location-based technologies, including beacons and geo-fences, are giving hotels and restaurants access to customers in a whole new way.

“Hotels with several restaurants in them can push offers to customers as they walk by a restaurant, such as ‘come in for a three-for-one dinner,’ using beacons running on Bluetooth or Wi-Fi,” says Asif Khan, president of The Location Based Marketing Association (www.thelbma.com). “They could also push a review of a restaurant or a video of the spa as the person walks by it.”

Already popular in the retail environment, some companies are utilizing apps to connect with customers in this way, and many are tying push notifications in with loyalty programs to know when loyal customers enter their location, as well as point-of-sale (POS) systems for payment, and customer relationship management systems, Khan notes. This also allows businesses to capture information about a customer to offer more personalized service.

“The beacon technology allows us to understand who is in the building and to respond,” he explains. “It can recognize a platinum member letting staff know they should go out of their way to service them. So it’s not just about marketing, but also about offering better service.”

In July 2014, Marriott International (www.marriott.com) debuted its LocalPerks push-messaging program using beacon technology and the company’s Marriot Guest Services app — different from the company’s enterprise app — working with Swirl (www.swirl.com). The technology, which is only available on Apple iPhones, allows Marriott to provide geo-targeted offers to guests during their stay as they move about the property, including food, beverage, spa and golf information. After piloting the program at three properties, Marriott expanded it to 12 more at the end of last year. The system also pushes out a welcome message when a guest arrives on the property.

“I would like to be able to update guests every day with a push notification about activities on the property,” said Brian Garavuso, executive vice president and CIO at Diamond Resorts International (www.diamondresorts.com). “If I know you have children, I’ll tell you about the cool activities going on for them. If I know you don’t have children, I’ll tell you about the water aerobics or horseback riding available. It’s about keeping them engaged with activities, which is what people want in a resort environment.”

Garavuso is currently researching companies that can meet the needs of his company. Ideally he would like a solution to include a face recognition piece so employees could greet guests when they arrive at the resort based on name and image.

“It’s definitely something I want to pursue,” he says. “I want to recognize them as they arrive on property. If I only know Mr. Smith is within five feet, but the lobby is busy and full of 20 people, how do I know who he is? But with an image or picture, I would be able to greet him by name.”

Lemon Tree Hotels (www.lemontreehotels.com) in New Delhi has implemented Face Recognition Solution (FRS) from NEC (www.nec.com) which has the capability to address that very issue.  Initially installed to screen for potential security threats, the solution is deployed with NEC’s partner Target Vision, and intelligently matches faces appearing on the hotel surveillance cameras to a database list. Additionally, however, the technology enables managers to offer customized service to VIP guests.

For location-based programs to work, guests must opt-in and have their location services and Bluetooth activated on their smartphones. Privacy is always a concern, so giving guests the option to opt-in or out of a program is key, says Khan.

“It’s really important, whether you are going to use the technology to communicate with customers or are tracking them in any way, to enable them to opt out,” he notes, citing Nordstrom as an example. The chain launched a Wi-Fi-based tracking system to collect data about customer movements in the store, but didn’t tell anyone. “It created a media firestorm when people found out.”

Payment integration streamlines service
As more restaurants move to tabletop units and mobile tablets for ordering and payment, the use of beacons can allow customers to use smartphones to pay for meals, or to open and close a tab at the bar.

“We have seen beacons in a bar setting where there are people trying to place orders and settle bills, and this can allow people to place an order or pay for a bill through a mobile app,” Khan says.

At Paulaner NYC (www.paulanernyc.com), customers can start a tab and pay through their phone when they are ready to leave using Dash (www.paywithdash.com), a mobile app that allows customers to pay for their bills at any participating restaurant. At Paulaner, the app syncs with the restaurant’s POS system, and when a customer enters the restaurant, he or she can “check-in” through the app to alert the staff they are there and ready for service.

“When they check-in, their name and face pop up on an iPad supplied to us by Dash and it will notify the server someone checked in. Once they are checked in, the tab stays open, and they can pay and close it out without alerting or waiting for a server to bring a check to them,” says John Mutovic, general manager.

“If 20 people come in and order 20 beers and 20 orders of French fries, they may want to pay with 20 different credit cards, and processing this can be time consuming,” he says. Pay With Dash eliminates time employees would spend taking payment, he notes, and allows the guest to pay and leave when they are ready without a wait.

“The real benefit I see is that hospitality is about service. This allows more one-on-one time with the guest, and better service rather than having to leave a guest to enter an order or payment,” he explains.

Localization through social media
Another way to utilize location-based marketing and technology is to create individual Facebook pages for company locations, especially those companies that are national chains. MomentFeed (www.momentfeed.com) offers a technology for operators to target consumers who live in and around a one-mile radius of a specified store location using “Facebook Local Awareness Ads.”

Osf International, operating The Old Spaghetti Factory
(www.osf.com), headquartered in Portland, Ore., uses MomentFeed to manage its restaurants’ 43 Facebook pages, including its flagship brand page, and enables the company to track Instagram, Foursquare, Google Plus and Facebook to interact with customers in each market.

“It allows us to send certain messages and information to specific locations, which helps us be relevant to the unique customers in each market,” says Ryan Durrett, director of marketing for the chain. “We can have one voice and one tone because we do it all from headquarters, but customize it to each community.”

While beacons and geo-fencing are still somewhat new to the hospitality space, it is technology that can help attract customers and provide them with exceptional service. It also arms them with additional data to better understand their needs and wants, and cater to them.

“The ultimate benefit is data — collecting it and using it to glean insights about your customer,” says Khan. “Understanding the movements of people in the context of what they are doing and how you can better service them, like capturing customers who come into your coffee shop but then go to the bagel place across the street. If you were smart and saw this trend, you would start selling bagels.”    

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