4 Ways Businesses Are Changing Customer Behavior Through Technology

Written by: Stephen Gould, CogoBuzz

In today’s world fraught with unexpected global crises and continued technological and digital advances, change takes place rapidly and consumer behavior is no exception. Consumer spending, which makes up two-thirds of the U.S. economy, has held strong through April even with soaring inflation, according to the Washington Post. But there are growing signs the spending streak could be ending. With news of a potential recession splashed across headlines, customers are beginning to rethink their spending habits and the first to go are travel, hospitality and spending on services, such as restaurants.

Services within the tourism and restaurant categories which were growing by more than 30% have now slowed to half that pace (Barclays survey). As businesses search for revenue drivers amid rapidly changing consumer behavior and a volatile economy, the future isn’t doom and gloom – quite the contrary but businesses must be agile and quickly adapt to the new consumer behaviors. With modern innovation and technology, consumer behavior is more malleable than ever. One solution businesses are increasingly looking to, particularly those within the hospitality, tourism, restaurant, retail and franchise space, is integrated WiFi marketing.

Using a restaurant as an example, imagine if the establishment could:

• Drive a regular happy hour customer to stay for dinner

• Motivate a customer that regularly comes in once a month to visit weekly instead

• Bring back a customer who hasn’t visited in over 60 days

• Inspire a customer to share their visit on social media, creating broader awareness

These scenarios can all be accomplished through WiFi marketing.

What is WiFi marketing?

Simply put, WiFi marketing leverages on-site guest WiFi to run highly targeted campaigns through an integrated set of technologies, including social media, SMS and digital signage. In return for free WiFi access, the customer, on the first connection only, provides contact information or logs onto social media and that data is utilized to send messaging and offers that are desirable and aligned with the customer’s preferences and behaviors.

In continuation of the restaurant example, if a restaurant has difficulty filling seats on Wednesdays, they can send a “Wine Wednesday” flash deal to customers offering a BOGO Deal, “Buy One Glass of House Wine, Get One Free. Today Only!”. It’s a win-win since 96% of customers prefer businesses with free WiFi and customers are normally obliged to provide their data in return for access—especially when it ensures a better experience. Perhaps that’s why the number of WiFi hotspots among businesses is expected to grow from 169 million to 628 million by 2023 (Cisco).

Four ways WiFi marketing drive revenue

When it comes to revenue correlations, WiFi marketing changes customer behavior and drives revenue in these four key ways:

1. Owning your own data lays the groundwork for customer behavior changes

It’s impossible to change customer behavior without first obtaining valuable information about the customer’s demographics and visits, since the ability to segment and target is the key to success.

Understanding who the customer is and what the behaviors are provides a highly customized and personal approach and ensures offers will be relevant and desirable. For example, a business wouldn’t send the same message and offer to a college-going Gen Z who enjoys a late-night beer on a budget as a more affluent retiree looking for an early dinner. Knowing those two distinct behaviors, by a customer, allows each customer to be presented with an offer that has unique value to them. Owned data is the most important outcome of WiFi marketing for this reason. In fact, a majority of consumers value personalization from interactions with businesses (Epsilon and GBH Insights).

2. Customer retention increases profit

Repeat customers spend more money. In fact, they spend 67% more since they purchase more over time than a new customer. Acquiring a new customer is five times more expensive than retaining an existing customer, (Invesp survey). Plus, increasing customer retention rates by 5% increases profits by 25-95%. Retaining a customer is difficult to do without communication, and WiFi marketing provides segmentation and triggers that speak to a customer's individual behavior and motivates them to stay loyal, return, and therefore drives revenue from repeat business. Furthermore, once the customer is in a database, ongoing messaging can be provided to build loyalty and turn the customer into an brand ambassador.

3. Loyal customers spend more

Customers typically spend more when they belong to a loyalty program. Customers participating in a loyalty program will spend more than non-loyalty members and 66% will adjust the amount they spend to maximize benefits from a loyalty program (Bond Loyalty Report). WiFi marketing is effective for building a loyalty program since basic triggers can be set for milestones like anniversaries, number of visits or birthdays, but the innovators are building engagement on customer behaviors like “Taco Tuesday”, or late night dinners, or the “Thursday regulars”. Combine this with exclusive, member-only deals and it ensures customers feel appreciated which results in increased spending and a better bottom line.

4. Customers purchase from brands they follow on social media

Social media is a critical aspect of the marketing sales funnels from awareness to conversions. But most importantly, following a business on social media has a direct correlation to sales. 77% of consumers are more likely to purchase from a brand they follow on social media as opposed to one they do not (Sprout Social). WiFi marketing drives organic social media followers and engagement when customers log on to WiFi via their social accounts – or they can be delivered social media content via SMS. Offers can also be provided that encourage a customer to follow the business on social media. The key is to remove the tedious steps the customer faces to engaging a business on social media. WiFi Marketing, with SMS, can make the customer’s effort be as simple as a single click, no search, no location filtering, just a single click to instantly be viewing the customer’s social media presence.

Growing a lucrative business with high-value customers during times when consumer behavior is ever-changing poses a challenge. It behooves businesses to leverage innovative technologies and utilize it to connect and segment customers for a better customer experience that ultimately generates great revenue.

Stephen Gould, Brainz Magazine

Stephen Gould is an entrepreneur with a successful history providing guest-engagement software solutions for the hospitality industry and he is the founder and CEO of NConnections. He holds a bachelor’s degree in computer science from the University of Central Florida. Before transitioning to technologies within the hospitality industry, Steve worked in government contracting and internet security for 18 years. He led research programs, authored development methodologies, and built and delivered software products across the globe.

In 2014, Steve returned to his software development roots to build and launched the CogoBuzz and MyConcierge initiatives. Steve’s vision of a fully integrated solution of everyday communications technologies to include WiFi, text, email, digital displays, CRM and social media using an Open Architecture, enables his customers to employ a highly customizable and personal engagement platform around the guest’s individual behaviors. And, with the innovative use of an Open Architecture, CogoBuzz can integrate with any existing modern application the customer may have already put into use.

With over five million customer connections to their networks and thousands more every day, Steve and his team understand the evolving challenges of providing great connectivity and value to any venue and recognize that communication to the end customer is key for future success in the connected world.