Top Reasons to Perform Geospatial Analysis Immediately - 10

How Does Location Based Service Work And Why You Need It

  • October 24, 2023
  • Guides
  • Author: Volodymyr Ovramenko
  • Reading time: 9 minuntes

It’s hard to believe, but our daily lives are tightly connected with location-based services. From simple navigation apps to sophisticated tools that give personalized recommendations, LBS are practically everywhere. The global location based services market is projected to reach $402.4 billion by 2031. Our smartphones have GPS, and these services rely on it to determine the precise location. 

Location Based Services market

In this article, we will explore what a location based service is, the technology behind it, and its benefits. So read on, and you will find out how companies dealing with location services transform today’s digital landscape.

What is a Location Based Service?

A location-based service (LBS) is a technology that uses the location of users to provide personalized information and services. It operates through devices capable of tracking user locations. LBS has three integral components: localization, service provision, and communication. 

what is LBS

LBS can be beneficial for business owners as it enables them to reach potential customers in specific geographic areas. It allows companies to offer location-based promotions, advertise to nearby users, and engage with their target audience. By utilizing location services, businesses can enhance their marketing strategies and create better experiences for their customers based on their location.

Types of Location-Based Services

There are various types of services that provide location data that cater to different needs and industries. We can categorize them into four main types:

  • Maps and navigation: These services offer interactive maps, GPS-based navigation, and route guidance to help users find their way to specific destinations. 
  • Tracking services: They focus on tracking the real-time location of assets, vehicles, and individuals. These services are commonly used in logistics and fleet management. 
  • Information services: People can use them to get location-specific information based on their current or designated location. 
  • Location-based applications: This category encompasses a wide range of applications that leverage location data to deliver relevant experiences to users. 

Each of these types caters to different needs and user preferences. They enable users to find the quickest route, discover nearby attractions, or engage with users. A reliable location-based service plays a significant role in enhancing convenience, efficiency, and overall user experience. 

How Does Location-Based Technology Work?

Location-based technology relies on a smartphone’s GPS to track the user’s precise location. By communicating with satellites, cell towers, and other devices, it creates a comprehensive map that serves as a foundation for location-based apps. This technology uses the following tracking methods: GPS, Wi-Fi, cell tower triangulation, QR codes, Bluetooth, and Radio Frequency Identification. Users have control over their privacy, granting or denying app access to their location data. 

To streamline the development process, companies providing location services often turn to Map APIs. It provides coding templates and ready-to-use location data from expertly curated databases. This ensures a seamless and error-free app experience, enhancing accessibility and user satisfaction with location services.

Why Your Business Needs Location-Based Services

Companies dealing with location services enjoy numerous advantages thanks to implementing this technology. Let’s explore the top reasons to use services offering location data:

Enhanced Marketing Efforts

With location-based service, businesses target their marketing efforts based on users’ location. Personalized and relevant messages maximize the impact of their marketing campaigns and increase engagement.

Improved Customer Engagement

Location-based services enable businesses to engage with customers in real-time. Customer location helps them capture attention and drive traffic to their stores.

Valuable Customer Insights

Location-based service provides analytics about customer behavior and preference. It gives businesses a deeper understanding of their target audience to improve their products or services.

Competitive Advantage

The power of location-based technology can give your business a competitive edge. Location based service companies get more attention from customers as they provide them with tailored solutions. 

Easy Adoption

To use the location based service, you don’t have a separate app. Specialists can easily integrate it into existing programs. 

Drawback of Location Based Services

Despite numerous benefits, we should be cautious with providers of location services. Here are important drawbacks to consider:

Security Risks

Location companies share real-time location information. If the data falls into the wrong hands, users can be vulnerable to malicious activities.

Privacy Concerns

The service based on location requires access to users’ location data, raising privacy concerns. Their data can be used for targeted advertising or other purposes without their consent.

Accuracy Issues

Companies based on location services may not always provide precise location data, especially in areas with poor GPS or Wi-Fi signals. 

Battery Drain

Location services are often battery-intensive, as they constantly use GPS to track the user’s location. 

Examples of Location-Based Service Apps

The variety of location service apps is impressive. Here’s a list of the most popular of them:

  • Google Maps
  • Lyft
  • Uber
  • Waze
  • WhatsApp 
  • Airbnb
  • GasBuddy
  • Foursquare
  • Dark Sky
  • Pokémon Go
  • Curbside
  • Target

Location-Based Service Industries

Services based on providing location data have found applications in various industries. Let’s look at some of the key sectors where companies offering location services have made a significant impact:

  • Retail: Retailers use these services for targeted advertising, geofencing, and proximity marketing. They can send personalized offers and promotions to customers based on their location, driving foot traffic and increasing sales.
  • Transportation: the transportation industry uses the location based service for real-time tracking of vehicles, optimizing route planning, and providing navigation assistance to drivers. 
  • Hospitality and tourism: The hospitality industry uses location services to offer location-specific recommendations, wayfinding, and personalized services to guests.
  • Healthcare: The healthcare industry uses them for patient tracking and asset management within medical facilities. They can also help patients and visitors navigate large hospitals and find specific departments or services easily.
  • Logistics and supply chain: These companies help track the movement of goods, optimize delivery routes, and provide real-time updates.
  • Real estate: Services providing location data aid the real estate industry in providing property listings and nearby amenities to potential buyers. 
  • Urban planning: City planners use the location-based service for traffic management, public safety, and urban development. 
  • Advertising and marketing: Companies engaged in location services enable targeted advertising based on users’ physical locations. 
  • Environmental monitoring: With location-based services, people get efficient environmental monitoring and disaster management. 

These are just a few examples of industries using services that provide location data. They improve efficiency, engage customers, and provide valuable experiences.

How Does Indoor Location Differ From Outdoor Location?

Indoor and outdoor location services differ significantly due to the challenges posed by the different environments. Key differences between the two concern infrastructure, signal penetration, precision, technology, mapping, user experience, use cases, deployment complexity, etc. Let’s look at each of them in detail. 

The first difference concerns technology. GPS dominates outdoor location, while indoor location relies on a variety of technologies, including Wi-Fi, Bluetooth, Ultra-wideband (UWB), magnetic fields, etc. The next thing to consider is infrastructure: outdoor locations rely on GPS, while indoor location services providing location data require different technologies for accurate positioning. Signal penetration is another important factor, since thick walls or tall buildings can block or weaken GPS signals. Indoor location technologies need to deal with signal obstructions and reflections. The latter can affect the accuracy of location data. 

Precision matters a lot because GPS provides relatively precise outdoor location accuracy. On the other hand, indoor location systems cannot achieve the same level of precision. Outdoor mapping is based on satellite imagery and geographic information systems. It provides comprehensive maps for navigation. Indoor mapping requires specific building maps with details about individual floors, rooms, and hallways. They must be created and maintained separately. 

indoor vs outdoor location based service


What are some common types of location-based apps?

You know many popular location-based applications, such as Uber, Google Maps, WhatsApp, Snapchat, etc. But what are the main categories of all these apps? Let’s take a look at the types of apps providing location services. They include navigation apps, GIS apps, weather apps, local discovery apps, travel and tourism apps, real estate apps, dating apps, fitness and health apps, ride-hailing apps, emergency services apps, social media apps, and AR games. As you can see, the range of location-based applications is diverse, and location-based services are widely used in various industries. 

How accurate is location based service?

The accuracy of these services can vary depending on several factors. These include the type of technology, the environment, and the quality of the GPS signal. This service can generally provide accurate results, especially in open areas with a clear view of the sky. However, in urban environments or areas with signal obstructions, the accuracy may be lower. 

How to develop location based service?

Developing services providing location data involves these steps:

  1. Define the purpose and goals of your service;
  2. Identify the data sources you need;
  3. Choose a platform (mobile or web);
  4. Design an easy-to-use interface;
  5. Integrate location services into your app;
  6. Manage location data securely;
  7. Test, optimize, and gather user feedback;
  8. Prioritize user privacy and obtain consent;
  9. Release and maintain your service;
  10. Improving the service based on user feedback and market trends.

Consider collaborating with experienced developers and designers to ensure the successful development and deployment of your location-based service.

What are the privacy concerns with location based services?

Privacy concerns with location-based services include worries about continuous location tracking. Users often worry about data security and retention, user consent and control, third-party sharing, and location profiling. Location companies should be transparent, obtain consent, and ensure data security. They have to offer clear privacy options and address these concerns to protect user privacy.

How do location-based services help geomarketing?

Location-based services greatly support geomarketing by enabling targeted advertising, geofencing, proximity marketing, location analytics, store performance analysis, competitor analysis, and personalized recommendations. Collaboration with location based service companies leverages location data to deliver tailored marketing messages. Besides, geo marketers can analyze customer behavior, optimize campaigns, and enhance the overall effectiveness of marketing strategies.


Having a location based service is a necessity today, as it offers personalized information and services based on the user’s location. The technology has numerous benefits, but you should also consider some drawbacks. Despite these challenges, location-based services have found applications in various industries. Indoor location technology presents additional challenges compared to outdoor location technology, but it continues to evolve. Overall, these companies have transformed the digital landscape. They play a significant role in shaping our interactions and experiences.

Location-Based Services with Mappitall

Mappitall is one of the leading companies delivering high-quality location-based services. We offer top-notch indoor and outdoor location services. Our experts have sufficient expertise to meet every client’s needs and provide custom mapping solutions. Professional developers can create cutting-edge location software based on your industry’s requirements. With our location based service, your business will get precise location data. Do not wait to fill out an order form and enjoy seamless project development. We are one of the top location service providers in the market, so don’t wait to grow your business with accurate location data. 

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    mapping background image Volodymyr Ovramenko author image

    CEO and Founder at Mappitall

    An entrepreneur and business leader, Volodymyr began his career in the late 1990s at the Laboratory of Geoinformation Systems of the Kharkiv National University of Radioelectronics.

    In 2007 Volodymyr created Mappitall, and grew the company from a small agency providing GIS solutions to one of the industry leaders in Ukraine, a reliable technology partner for many international enterprises and top-level organizations around the world.

    As CEO, Volodymyr is the driving force behind the company’s strategy and business development, actively working on the development of Mappitall’s business model, attracting more and more talented people who share his vision and mission.