Geofencing Marketing 101: Definition, Tools, and How-To Use it

Let’s think about Geofencing Marketing. Suppose, you received a notification on your phone when you were walking into a specific store. Or you receive popped up ad on your phone screen and you were near a particular location. That might be possible due to geofencing marketing tactics.

This article will break down what geofencing marketing is all about. We will explore the tools involved and how it actually works. Also, we’ll look it detail to know how businesses are using it and a small businesses can get in on the action.

What is Geofencing in Marketing?

Suppose, drawing a virtual fence around a real-world location. May be, this fence could be around a store, a business, an event venue, or even a whole neighborhood in your area. That virtual fence is a geofence.

Geofencing marketing uses this virtual boundary to trigger actions when a mobile device enters or leaves the area. These actions can be:

• Sends push notifications to users’ smartphones.
• Display targeted ads on apps and websites.
• Deliver SMS messages.

This location-based marketing precisely and timely delivers to its target medium. It allows businesses to connect with customers at the right place and the right moment.

Common Geofencing Marketing Tools:

In today world, businesses use various tools to set up and run geofencing campaigns. These tools help in creating the geofences, targeting users, and analyzing the results. Here are some common types of geofencing marketing tools:

• Mobile Marketing Platforms:

These platforms often have built-in geofencing capabilities. They allow you to create campaigns, define geofences, and manage your messages. Examples include:

• • Braze
  • Iterable
  • Localytics

• Ads Platforms:

To use a geofencing technique, top advertising platforms like Google Ads and social media advertising platforms (like Facebook Ads) offers location-based targeting options in their campaign setups.

• Specialized Geofencing Platforms:

Some platforms focus solely on location-based marketing strategy and offer advanced geofencing features to its users.

For Example:

• • Adsquare
  • PlotProjects
  • GeoMoby
  • Geoplugin

These tools usually provide features like:

• Fence Creation:

Drawing the virtual boundaries on a map.

• Audience Segmentation:

Targeting specific groups of users within or entering the geofence.

• Campaign Management:

Setting up the messages and when they should be triggered.

• Analytics:

Tracking the performance of your geofencing campaigns.

How Does Geofencing Work?

It’s not a difficult task to understand the workings of geofencing because it relates to the technology and location services of smartphones. Here’s a simplified look at how it works:

1. User Permission: For geofencing to work, users usually need to have location services enabled on their devices and have given permission to the app in question to access their location.
2. Geofence Setup: The marketer uses a geofencing tool to define the virtual boundary around a specific location. This is often done by drawing a shape (like a circle or polygon) on a map.
3. Location Monitoring: The geofencing platform constantly monitors the location of users who have the relevant app installed and have been granted location permissions.
4. Triggering Actions: When a user’s device enters or leaves the defined geofence, the platform detects this movement. Based on the campaign setup, this triggers a predefined action, such as sending a push notification or displaying an ad.

Think of it like a digital tripwire. When a relevant device crosses the virtual line, it sets off a pre-programmed response.

How a Successful Geofencing Marketing Strategy Works?

A successful geofencing marketing strategy involves more than just setting up a fence and sending messages. Here are some key elements to consider:

• Define Your Goals: What do you want to achieve with geofencing? Increase foot traffic? Boost sales? Drive app engagement? Your goals will shape your strategy.
• Identify Your Target Audience: Who are you trying to reach? Understanding their behavior and where they are likely to be is crucial.
• Choose the Right Locations: Where should your geofences be? Think about places relevant to your business and your target audience. This could be your store, competitor locations, events your audience attends, etc.
• Craft Relevant Messages: Your messages should be valuable and contextually relevant to the user’s location. Generic messages are less likely to be effective.
• Consider the Timing: When should your messages be triggered? Immediately upon entering the geofence? After a certain amount of time spent there?
• Measure and Optimize: Track the performance of your campaigns. See what’s working and what’s not, and make adjustments accordingly.

A well-thought-out strategy ensures that your geofencing efforts are effective and provide a positive experience for your audience.

Key Benefits of Geofencing Marketing:

Why are businesses using geofencing marketing? It offers several key benefits:

• Increased Relevance: By targeting users based on their location, you can deliver more relevant and timely messages. This can lead to higher engagement rates.
• Improved Personalization: Location data allows for a more personalized marketing experience. You can tailor your messages based on where someone is.
• Boosted Foot Traffic: Retail businesses can use geofencing to encourage nearby customers to visit their physical stores.
• Competitive Advantage: You can target customers near your competitors, potentially swaying them to choose your business instead.
• Enhanced Data Collection: Geofencing campaigns can provide valuable insights into customer behaviour and movement patterns.

For example, a coffee shop could geofence a nearby office building and send a lunchtime promotion to people working there. This message is highly relevant to their location and time of day.

Real-Life Examples of Geofencing Marketing:

Many businesses, big and small, are leveraging geofencing marketing effectively. Here are a few examples with some facts and stats where available:

• Starbucks: The Starbucks app uses geofencing to send push notifications to users when they are near a Starbucks location, reminding them to order ahead or promoting special offers. This aims to drive foot traffic and app usage.
• Sephora: Sephora uses geofencing to enhance the in-store experience. When customers with the Sephora app enter a store, they might receive personalized recommendations or information about nearby beauty services.
• Burger King: Burger King has run campaigns targeting customers near McDonald’s locations, offering them deals to come to Burger King instead. This is a direct competitive use of geofencing.
  • One campaign offered a Whopper for just $0.01 to users who were within 600 feet of a McDonald’s. To redeem the offer, users had to order through the Burger King app. This cleverly drove app downloads and in-store traffic.

• Retailers at Malls: Many shopping malls use geofencing to welcome visitors and provide information about stores, events, and deals within the mall premises. This can improve the overall shopping experience and drive traffic to specific retailers.

Facts and Stats about using the Geofencing Approach:

• A study by Location Based Marketing Association found that location-based mobile advertising can lead to higher click-through rates compared to traditional mobile ads.
• GeoMarketing reports that proximity marketing, which includes geofencing, can influence purchasing decisions.

These examples show the diverse ways geofencing can be used to achieve different marketing goals.

How to Use Geofencing for Small Business?

Geofencing isn’t just for big corporations. Small businesses can also benefit from its targeted approach. Here’s how a small business can use geofencing:

• Drive Local Foot Traffic:

If you have a brick-and-mortar store, geofence the area around your business to attract nearby customers with special offers or reminders.

• • Example: A local bookstore could geofence a 5-block radius and send a notification about a weekend sale to people in the area.

• Target Competitor Locations:

If you have a competitive edge, geofence your competitors’ locations to try and win over their customers.

• • Example: A new coffee shop could geofence a nearby established cafe and offer a discount to first-time visitors.
• Enhance Events:

If you’re hosting a local event, geofence the venue to provide attendees with schedules, special promotions, or information.

• • Example: A small craft fair could geofence the event location to send reminders and vendor highlights to people who have RSVP’d or are nearby.

• Reward Loyal Customers:

Geofence your own store and trigger special offers for customers who frequently visit.

• • Example: A local bakery could send a “thank you” discount to customers who enter their geofenced area for the third time in a week.

To get started, a small business can:

1. Choose a Geofencing Platform: Look for user-friendly platforms that fit your budget and needs. Some mobile marketing platforms offer entry-level options.
2. Define Your Geofence: Start with a small, relevant area around your business or a target location.
3. Create Your Message: Keep it concise, compelling, and relevant to the location.
4. Set Your Triggers: Decide if you want to target people entering or leaving the geofence (or both).
5. Track Your Results: Monitor how your campaigns are performing to make improvements.

Geofencing offers a powerful way for small businesses to connect with their local community and drive business.

Common FAQs About Geofencing Marketing:

Let’s address some common questions about geofencing marketing:

1. Is geofencing intrusive?

It can be if not done thoughtfully. Relevance and user consent are key. If the messages are valuable and users have opted in (by allowing location permissions for an app), it’s less likely to be seen as intrusive.

2. Does geofencing drain the phone battery?

Modern geofencing technology is designed to be energy-efficient. However, constant background location tracking by many apps can impact battery life. Well-optimized geofencing by a single app usually has a minimal impact.

3. What’s the difference between geofencing and geotargeting?

Geotargeting is broader and often uses zip codes or cities to target ads. Geofencing is much more precise, using custom-drawn virtual boundaries.

4. Do users need a specific app for geofencing to work?

Yes, typically. The user needs to have an app installed that has geofencing capabilities and has been granted permission to access their location.

5. How accurate is geofencing?

Accuracy can vary depending on the technology used (GPS, Wi-Fi, cellular data) and environmental factors. GPS generally offers higher accuracy outdoors.

Final Thoughts:

Geofencing marketing offers a unique opportunity to connect with customers based on their real-world location. By understanding what it is, the tools involved, and how to use it strategically, businesses of all sizes can leverage its power to drive engagement, increase foot traffic, and ultimately boost their bottom line. So, are you ready to draw your first virtual fence? Contact Izla Technologies for the right marketing strategy for your business.