The Cost of a Beacon Project

November 8, 2015
Romet Kallas
Account Executive

Before starting a proximity campaign there are a lot of questions to ask and variables to consider. Besides data ownership and privacy, one of the most frequently asked questions is the cost of a beacon project. So, what are the variables that define the cost structure of a proximity marketing campaign?

Before you can start to think about the cost, you need to set an objective for the campaign. At this point I would like to state the obvious; that starting a beacon project, needs to provide additional value to your customers. Bombarding your customers with excess noise without insight and context, will most likely give you poor results.

A beacon project should not be an isolated venture, but rather a part of the bigger marketing strategy, where beacons are used to improve and personalize the customer experience.

So when you have decided to start a beacon project, what is the additional value? Is it to send push notifications to customers? Build gamified loyalty programs? Offer coupons and discounts? Do you want to increase customer engagement? Is it to provide smart signage? To provide indoor navigation? To provide mobile proximity payments? Is it to have customer analytics inside your location? Is it to display average queue times? Or is it to bring your customers back to the store? To help you decide on a desired solution, you can start by learning from some of the existing global proximity projects showcased in Proxbook.

Let’s start with the app

First of all, the #1 factor defining the cost of a beacon project is the mobile app. A mobile app is vital in a beacon project to get your customers engaged, but the question is whether to develop your own app or use a 3rd party app instead? Developing an app can be a costly and a time consuming process, but it also has it’s advantages. When using a 3rd party app, you are never entirely in control of the conversation with the customer and you have limited options to customize the experience. And then there is the question of data ownership. On the other hand using 3rd party apps will save you the cost and time of the developing process and possibly give you a large audience base, that would take a lot of effort to build organically.

Skipping the app

It is also possible not to use an app at all, saving you the cost of the entire process. Using the Eddystone-URL beacon format, also known as The Physical Web, you can engage the customers without an app. It mainly works on a pull method, and when a consumer walks into the range of a beacon, they will be able to interact with the website (URL) that is transmitted by the beacon. But skipping an app means that you currently can only engage with the Chrome browser. Meaning that you limit yourself from providing extra features and you rely only on the fact that whether the customer clicks on the broadcasted link or not. I’m not saying that choosing to skip the app is wrong, there are use cases like smart signage for example, where the URL alone can successfully enhance the customer experience.

But when it comes to greeting your customers with a beacon or being able to provide extra features and across all operating systems, an app is a necessity.

So the question you need to answer is what kind of an app strategy are you going for?

Then there is the cost of hardware

The price of a single BLE beacon can vary approximately from 5$ to 50$. It really depends on the type of the beacon; is it a standalone beacon or is it connected to a power supply. Some standalone beacons have a lifespan of only few months, while other beacons can run as long as 5 years. Another factor is the signal range of the beacon, that it is able to transmit. Regular beacons have usually a range up to 70m, while long range beacons can reach up to 450m. The price also depends if you want the piece of hardware to be weatherproof or equipped with extra features like motion and temperature sensors. When choosing beacon hardware, it is also important to understand the cost of deployment and maintenance. Leading hardware providers will usually give you access to an API, which will enable you to manage the beacons and monitor battery life, temperature, traffic, configuration tools and so forth.

Managing the hardware

As mentioned above, providing extra value to the customer should be the fundamentals of every successful beacon project. This is where the beacon platforms come in, that provide a wide set of features like indoor navigation, proximity payments, smart signage, displaying average queue times, campaign management, customer analytics and so forth. To enable these features in your app an SDK is provided. And a content management system is usually provided as a standalone dashboard or as an API to connect with your existing CMS.

The cost of a beacon platform can be based on per interaction, per user, per beacon or a fixed SaaS fee.

Maximizing the value from proximity data

Proximity data has proven to be valuable when it comes to ROI of an instore marketing campaign. But in most cases the data is not leveraged completely. A beacon project can also help you to bring your customers back to the store or any other location. That is where online retargeting comes in. We at Unacast recently partnered with Opera Mediaworks. Which gives us access to over 800 million internet users, ready to be targeted by hyper contextual ads complemented with proximity data. We operate on a SaaS fee and integrate our API with the beacon platform, so you can retarget your own customers later online. Serving an ad based on the interaction with beacons in the physical space, has proven to be a successful marketing strategy, bringing your customers back to the store.

So, what about the cost?

Unfortunately, there is no singular answer to the cost of a beacon project. It is as difficult to answer how much a car or a house costs - the price depends on the purpose it has to serve. When you have set the objective and understand all the options and variables we have discussed in this post, you are a step closer to starting your own beacon project. To execute your desired campaign, you can find a suitable Proximity Solution Provider from Proxbook, where it is possible to search the right partner by country, by technology specification or by industry. Only then do you have everything you need to perform the actual price calculation for a beacon project.

Best of luck!

(And remember to send info on your successful deployment to us, so that we can showcase it on Proxbook)