Geofencing is a location-based marketing strategy that uses various technologies to send personalized content to customers within an established geographic area.
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.
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.
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.
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.