With a quick download of a free smartphone application, residents of Lake Forest, Ill., can get a free hot dog or slice of pizza—among other perks.
The app is “Live, Work, Play,” which was created to help revitalize the upscale Chicago suburb’s downtown business district. Lake Forest is among the many towns and cities across the U.S. tapping into the rapid growth of mobile marketing through smartphone applications.
The apps vary from town to town, but the focus of each is similar: to give businesses an opportunity to reach locals through discounts and loyalty cards, and a fighting chance against larger chain stores outside of town.
“A small local store may never be able to completely out run a larger brand like Whole Foods, but there has been a major trend toward local buying and supporting local trends,” said Syagnik Banerjee, assistant professor of mobile and interactive marketing at University of Michigan-Flint. “Local communities may turn out to be stronger by using this edge.”
While it is too early to gauge the success of this form of marketing, Mike Ragsdale, founder of TownWizard, a company that built a basic platform for towns to fill in with their own content, said he believes this is the future of marketing. TownWizard, which was founded in 2010, currently reaches more 150 locations in eight countries and four continents.
“We are just in the embryonic stage of it,” Mr. Ragsdale said.
Michael Becker, North America managing director of Mobile Marking Association, said, “If a marketer within any industry is looking to have success, they will need to have mobile as part of their strategic plan.”
Mr. Ragsdale predicts that eventually communities across the globe will have their own apps.
That’s good news for John Pritzlaff, a resident of Charlottesville, Va., who started using Cardagin, an application that focuses on customer loyalty programs, when his favorite local coffee shop, Café Cubano, began to use the app. Mr. Pritzlaff said he now uses the app at least five times a week at different local businesses.
“I’m more inclined to go to Café Cubano than to a Starbucks because it is local, and I feel like I’m connected to the actual product,” Mr. Pritzlaff said.
Mr. Pritzlaff said he was drawn to the app because it was free and intuitive. “The app itself is so easy to use and I really love how it works.”
He added, “I love that it is all on my phone.”
REACHING THE LOCALS
To create these smartphone applications for towns and cities, business improvement districts, downtown associations and city governments have partnered with various app-developing companies. Lake Forest, Ill., partnered with livelocal.ly, which is based in Chicago.
Susan Kelsey, economic development coordinator for Lake Forest, said the app allows residents to have access to “Lake Forest at their fingertips.” The app, which was funded by the city, offers users discounts, loyalty cards, a business directory and live updates through push notifications. Also, local events can be added directly to the phone’s calendar.
For example, a customer at Foodstuffs, which features gourmet food and catering, can receive a 15% discount off all deli items after 3 p.m. (up to 50 times). Each time a customer uses this perk, he or she scans a QR (Quick Response) code with a smartphone, which allows the application to track these purchases.
Lane Pasquesi, owner of Left Bank, a family-owned restaurant, says offering perks such as buy-one-get-one-free deals through the application has brought new customers into his restaurant.
“The more fingers you have in the application world, the better for you because that’s all these people use these days,” Mr. Pasquesi said. “People are prone to downloading applications because it’s so easy. People are trying to save money all over the place, so why wouldn’t you download an app where you can save a couple bucks? This is an inexpensive way to capture an audience that I don’t think you would get through traditional media.”
The app, which was released six months ago, has been downloaded more than 1,200 times, but Ms. Kelsey hopes to increase that number to 3,000.
“We are working with local business districts and the local college to increase the marketing of the app,” Ms. Kelsey said. “Our long-term vision is to prepare our local businesses to work within mobile technology and accept commerce on a mobile platform.”
Dr. Banerjee, the marketing professor in Michigan, said these applications are most useful when integrated within a larger marketing effort and not as a standalone technique. Without a broader plan, he said, the apps are unlikely to allow small businesses to successfully compete against larger corporations with bigger marketing budgets.
“The app is just a way to communicate with the customer, which is important but just one of the many things,” he said.
CONNECTING WITH TOURISTS
Brandy Wheeler is trying to connect to new customers by using mobile marketing to bring awareness to Traverse City, Mich. Ms. Wheeler owns an independent marketing and touring service called “Meal Tickets and Unusual Ideas,” which is based in the Northern Michigan town.
Close to Sleeping Bear Dunes National Lakeshore, a popular tourist destination, Traverse City attracts millions of visitors each year. Ms. Wheeler teamed up with GoLocalApps, an app developing company from Sacramento, Calif., to create “Traverse Traveler” to introduce visitors to the area. Ms. Wheeler realized the app not only appealed to travelers but also residents and businesses. Locals gained immediate access to their favorite places, and businesses could reach their customers in a new way.
Ms. Wheeler now markets her app to businesses in the community. They can pay a small fee and be included in the listing of the app, which helps them network on social media, promote events and offer specials. In addition, businesses can list contact information, post images, give a description of their businesses and link to their website. Businesses have the option of paying $10 per month or $99 for one year.
“Traverse Traveler” has been downloaded more than 8,500 times on the iPhone since its launch in December 2010, which has surpassed Ms. Wheeler’s expectations, and she said she hopes the number will double soon, as a beta version recently launched for Android phones.
With developers optimistic about this new trend, companies such as Livelocal.ly, TownWizard and Cardagin are trying to find the best way to design them.
“We spend a lot of time on the Internet,” said Austin Asamoa-Tutu, CEO and co-founder of livelocal.ly. “Now smartphones allow us to do so on the go. It makes sense to connect willing eyeballs to content that they want and thus mobile marketing continues to grow.”