Offers, deals and coupons are an inherent part of location-based marketing. One of the most common methods retailers and restaurants use to draw customers into their stores is to offer customers coupons for their visits.  The industry average for coupon redemptions is right around 1%.  Yes, that’s right.  Only 1% of coupons received by consumers are actually used and redeemed.

Why is this redemption rate so low?  Here’s the biggest reason

Lack of timeliness and context

Lack of timeliness and context occurs when I receive an offer when I’m not ready to redeem act upon it.  If I receive a coupon to save $5 on my next haircut, but I just had my hair trimmed, I’m likely to forget about the offer.  Timing, and context, are everything.

Retailers and brands can leverage location to eliminate this problem. That is, retailers can leverage location-based marketing to deliver the right offers to customers at the right time and place.

For example, if I opt-in to receive offers and deals from a a clothing retailer, I’m going to be much more likely to redeem an offer when I’m in a shopping mindset.  What type of location would signify that I’m in a shopping mindset? My checking into a mall would be a great signal that I’m shopping.  So would checking into a store like Target or another major retailer.

Brands and retailers that know when their customers are in the right mindset to buy their products are able to deliver the most effective offers at the right time.  When brands do this, coupon redemption rates can increase ten-fold, enabling marketers to increase their ROI on marketing spend and their overall revenue.

What else?  What other ways can retailers leverage location-based marketing to increase coupon redemption?

Read more: How Single-Use Coupons Can Drive Greater Engagement