What is Geofencing Marketing?
Geofencing marketing allows businesses to send unique ad campaigns to customers within a defined area. It allows you to use the demographic of customers in an area to send them specified in-app messaging and push notifications. When a mobile device enters the location, it will trigger notifications such as promotions, exclusive offers, or discounts to the mobile device.
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How does Geofencing Advertising Work?
Geofencing works by detecting customers within a virtual boundary through their smartphones or tablets to attract customers to your business. To implement geofencing advertising, you must create a geofence in a designated area and design an ad campaign to deliver to people who enter the area. When a customer enters your geofence, they are added to your audience and receive content through in-app ads or search or display ads.
A geofence is virtual lines drawn around the physical boundary of the location you want to target customers. A combination of technologies are used to create geofences including:
- Radio Frequency Identifiers
Geofences can be created anywhere, including around your business, your competitor’s location, events, colleges, airports, and more. The ads connected to geofences should be contain a promotion or other invitation to your business to encourage customers to visit immediately. Geofencing advertising works best when geofences are small and compact, so it is convenient for customers to visit your business when they receive the ads.
There is no hardware required to install a geo-fence and can be done from within your service provider’s web console. To work, you require a mobile app on the smartphone and an SDK from a service provider, such as Optimove, integrated into the mobile app. The smartphone user also has to grant you permission to track location (foreground as a minimum as well as background ideally) and particularly for Apple phone users then explicitly grant permission to send push notifications.
Once the geo-fences are in place when someone enters, leaves, or lingers in a geo-fence you can decide exactly what actions should happen.
- Send a Notification (now or after a time delay) like “Enjoyed your visit? Rate us on TripAdvisor”
- Send an SMS or Email – Giving them important information about a location
- Send an In-App Message – With rich media content to drive engagement
- Add them to a remarketing list to then tell them about a future event at the same location.
To get the best from the technology, there are a few things you need to know about geo-fences. Location tracking on a phone can put a heavy load on the smartphone battery. Anyone who has used Google Maps on a long journey will testify to that. So to manage this, the operating systems of the phone enforce certain rules, such as only sharing the location update every once in a while (15 – 20 seconds for example), or only while the app is in use. Also, it won’t repeatedly send location updates where the person hasn’t moved far from the last update. Typically, a significant change is over 500 meters. So to get the most out of geo-fences you have to follow some important best practices, and understand these limitations. They will apply to ANY service provider you use. We will dive into this in more detail a little later.
Once this is enabled the geo-fence will have all the necessary tools to automate the sending of the campaigns you create.
How do Businesses Use Geofencing Marketing?
Businesses use geofencing marketing to engage their customers such that they will come to your location immediately. Here are some of the most common geofencing use cases:
- Add geofences in points of interest – airports, hotels, and other tourist locations can create urgency for customers to visit your location
- Survey customers when they leave your geofences – feedback from customers allows you to understand how customers view your business and use that information to improve your in-store experience
- Understand consumer behavior at competitor’s locations – send customers a better offer when they visit your store to influence their behavior and create a segment of customers based on how often they visit competitor’s locations
Benefits of Geofencing Marketing
Geofencing marketing integrates location and behavioral data customer data to target customers boosting local sales, increasing analytics information, personalized content, and increasing customer loyalty. Here are its main benefits:
Enhance Local Sales
Many businesses want to rank high in local searches, and geofencing marketing is a good tool to improve engagement of local customers. Geofencing allows companies to target local customers in a defined area and adjust the content to the demographic and behavior of those customers. It also allows you to send promotions when they occur, ensuring customers receive ads at the right time.
Increase Tools for Analysis
It can be difficult for businesses to measure local sales and survey each customer that enters your store. Geofencing advertising allows you to measure if customers are coming to your business based on geofencing promotions. You can also survey customers about their experience with your business when they leave your geofence. Businesses can use this data to adjust their in-store experience and change future marketing campaigns.
Provide Personalization for Customers
Geofencing allows businesses to collect data to personalize offers to each customer. Based on demographics and preferences of local customers, businesses can alter their promotions. Geofencing marketing allows you to precisely target content to customers, so they receive content that relates to the customer segment of the location.
Expand Customer Loyalty
Customer loyalty is important because it is less expensive to retain an existing customer than engage a new customer. Geofencing advertising allows businesses to personalize content to individual customers, which increases customer loyalty. If you reward customers who visit your store often with exclusive promotions, you will start to build a relationship with that customer, and they will be more likely to keep coming back.
The Difference Between Geofencing Marketing and Proximity Marketing
Geofencing and proximity marketing are both location-based marketing tools that allow businesses to engage customers in specific locations. Geofencing targets a larger area, or geofence; when a customer enters the geofence, they become a relevant target of a company’s marketing campaign. Proximity marketing sends customers notifications when they go near beacons, small devices that detect smart phones or tablets.
Beacons allow you to detect a person’s exact location and are good to use inside stores. They allow you to send specific messages based on the department a customer is in inside the store or as they are walking past your store. Geofences are not as precise and often cannot send messages when a person is inside a store or building. However, geofences cover a larger area and are easier to use when you want to implement location-based marketing in many areas.
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Best Practice for Geo-Fencing campaigns
There are some key considerations to take into account when implementing geo-fencing for your brand, which will help you make the most from your customer led journerys and firmly establish a successful geo-fencing campaign.
Position and size
Carefully consider the position and size of your geo-fence to capture the maximum number of users. Don’t make them so large (hundreds of miles wide) that they aren’t nearby or so small (10 meters) that you hardly message anyone.
Method of Travel Through Geo-Fences
Consider how people will be traveling through the geo-fence, be it by car or walking, for example. The speed that they travel is a factor in how large a geo-fence should be, to stand the maximum chance of them triggering the message.
Give Enough Time to Send
Mobile phones only send location updates every 15 – 20 seconds and only when the person’s location has changed significantly from the last update being sent. So, you have to consider this when deciding the size of your geo-fences. So, don’t make the geo-fence too small where people are traveling quickly and could make it through the fence before the phone has a chance to send location data.
Is a Geo-Fence the Right Option?
Don’t try to use geo-fences where GPS location data could be poor, inside buildings or tightly drawing geo-fences around the building perimeter. Use Beacon technology if you can in these situations or target open spaces where people will be entering the building.
Limit the number of times someone will receive a message using our customer insights and AI optimization. The best way to encourage someone to uninstall your app is to send them repeated (and possibly irrelevant) messages.
Time of day
Think about the relevance of the message and the time of day. Don’t promote your breakfast specials at 2 pm. Either switch off messaging in your geo-fence when it’s not relevant, or, better still, have it set up to send different messages from the same geo-fence at different times of the day.
Make your message REALLY relevant. Don’t just trigger a general message for every one of your users unless that makes sense of course. Send messages that are highly relevant to the user based on your customer insights and what you know works for that user.
Know Your Users
Prime the message based on their past customer behaviors. If you know they have looked at a particular product but haven’t purchased it yet, then if it’s on sale and they are near your store – tell them about it.
Combine Geo-Targeting Features
Consider using geo-fences in conjunction with Beacon technology. If you have a store, put geo-fences around your location (and if you want around your nearby competitors) and then use beacons for when they are close (100 meters or so) to bring them to your door. Also, consider using beacons inside your venue to provide hyper-local information.
Use location information to remarket to the user at a later date. Knowing that someone has been near your location, in the past, is valuable information. So store it and use it for later outreach marketing campaigns. “Hey the next time you are near, come in and see us for the latest special offers”.
For some businesses, customer endorsements are really important. So you can use the fact that someone has been to your place to then ask them to rate you on TripAdvisor, or similar. Set the geo-fence system to trigger, say, 24 hours after their visit with a link to your page, for their endorsement.
Frequently Asked Questions
How can you implement geofencing?
Geofencing allows you to send location-specified, in-app messages and push notifications. This can be helpful because it encourages customers to take immediate action after seeing these notifications. Moreover, there are many ways to implement geofencing, but here are a few:
- Sending offers when customers enter the geofenced area: if there are other stores close-by, this could give you an advantage against competitors.
- Surveying customers when they leave the geofence: it is helpful to know what customers thought of their experience.
- Adding geofences to popular locations, or points of interest: this can include airports, hotels, and tourist locations.
Is geofencing marketing worth it?
Let’s weigh the pros and cons of geofencing marketing.
- Targeted Advertising: Geofencing allows you to target specific areas and ensure that your messages reach the right audience. This approach can increase the relevance of your ads and improve engagement.
- Increased Foot Traffic: Geofencing can drive foot traffic by targeting users in the vicinity of your store or event. By offering incentives like this, you can encourage customers to visit your location immediately.
- Data and Insights: Geofencing provides valuable data and insights about user behavior, such as foot traffic patterns, engagement rates, and conversion metrics. This data can help you refine your marketing strategies, optimize campaigns, and make data-driven decisions.
- Technical Limitations: Users who do not have their device’s location services enabled will not see the notifications.
- Cost: The costs associated with geofencing campaigns involve technology, data management, creative development, and advertising.
- Saturation and Ad Fatigue: Continuous exposure to geofencing ads can lead to decreased effectiveness and privacy concerns.
Leveraging Geofencing Marketing with Optimove
Optimove’s advanced mobile marketing platform allows marketers to trigger more relevant messages for customers. The technology uses customers’ behavior and preferences to create a highly personalized marketing campaign.
Contact us today or request a Web demo to learn how you can use Optimove to enhance your customer relationships with geofencing marketing.
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