Ever passed by a store or thought of getting a cup of coffee, and you immediately received a notification from a nearby store or coffee shop?
Even better, purchased a smartphone, and you immediately received a coupon code to buy a smartphone case?
All these incidences are relatable. Serendipity, you’ll say.
But that’s not the case – you’ve just been geofenced.
So, What’s Geofence?
Geofence is a location-based marketing tool that can be integrated with an app to create a virtual geographical boundary that uses GPS technology to send push messages or notifications to users that enter or exit a particular geographical location.
Users receive notifications in real-time with relevant information based on their physical location.
Geofencing is the practice of using a geofence tool to achieve a specific purpose (like monitoring the devices within a specified virtual perimeter).
How Geofencing Works?
When you decide to use geofencing technology, that means you’re specifically targeting an audience within a particular geographical location.
The boundary is set using GPS and is completely invisible to the user.
It’s like drawing a fence on a GPS map and targeting the customers that step inside that fence.
How Geofencing Targets a Specific Audience?
Geofencing works well when you’re targeting smartphone users.
It starts with you setting up a virtual perimeter or boundary around your business premise.
That way, any qualifying customer who sets foot inside this boundary will be served with relevant ads or receive a notification about an offer they might be interested in, convenient to them in terms of location.
The ads sent could come in the form of text messages, push notifications, or PPC ads.
The Difference Between Geofencing and Geotargeting
Geofencing isn’t the same as geotargeting, even though some people use them interchangeably.
While geotargeting focuses on delivering content or ads to users or visitors based on their physical location, geofencing sets up boundaries that trigger certain ads or messages to be sent to users who cross or set foot inside the fenced area.
So, while geotargeting is more concerned about the area, geofencing is more focused on movement.
Also, while geotargeting is limited to bottom-of-the-funnel campaigns, geofencing employs a range of programmatic capabilities that also allow for retargeting, targeted prospecting, and overall allow you to address every part of the buyer’s journey.
How Much Does It Cost to Run a Geofencing Campaign?
Running an effective geofencing campaign costs several thousand dollars.
On average, the cost of running a geofencing ad costs between $1000 to $3000 per month. In addition to that, you might be required to spend another $250 to $1500 per month as service charges or the cost of managing the campaign.
Also, some platforms charge a fee for running a geofencing ad. A prime example is Snapchat, which charges $5 for 20, 000 sq. ft of geofencing.
6 Locations to Geofence
Geofencing isn’t just limited to targeting your location. You can also use it to target other locations, as well.
Here are six locations you can also target with geofencing:
- Your location
- Your Competitor’s location
- Trade shows and events
- Households through addressable geofencing
- Nearby stores and streets
Of course, you’re not just limited to targeting these six locations. But this should help you discover more locations or places to target.
5 Key Benefits of Geofencing
So, how’s your business bound to benefit from geofencing?
1# Makes It Easier for You to Reach Your Target Customers
Geofencing makes it easier for you to reach your target customers at the right time and place.
Geofencing operates with a virtual barrier or map. As soon as a potential customer sets foot in this barrier, they’ll be hit with a push message or notification or alert.
To you, that may mean a potential customer just happens to be near your business. It’s now upon you to figure out how to convince them to come to your shop or store.
So, how about you offer them a discount they can’t resist.
Mind you, the promotions are sent directly through their mobile devices. That means, your products or services’ promotions will be placed right into your customers’ hands.
2# Boosts Local Sales
Geofencing works even better with local marketing campaigns.
It can make a good conversion strategy and a great way to grow your business.
It’s an excellent stepping stone to getting more leads to your store or shop.
It’s simple: Let’s say you’re planning to offer a 30% discount to anyone who sets foot into your store. You can create a geofence to alert or notify anyone within your local vicinity about this offer and get them to come to your store and make a purchase.
This will see to it that you’re able to get even more people to come to your store and purchase your products or services.
3# Boost Engagement
Geofencing increases engagement. When you send an offer directly to your target audience at the place and time of their convenience, the odds are they’ll reach back to your business and find out more about your offer.
Customers are only curious to check out an offer if it’s relevant to their needs and interests. The fact that you would have tailored your offer at their most convenient time and place, means the customer will be more compelled to check you out and find out more.
4# Personalizes Your Customers’ Experiences
It bears repeating that your customers are only interested in offers that are relevant to them. Personalization is one of the few ways you can make your offer relevant to your customers.
The same audience you’re targeting is being targeted by dozens of other businesses, each with their own ads and offers. The only way to catch your customers’ attention is by making your offer exciting and memorable.
Geofencing is a marketing strategy that focuses on helping you understand your customers better. It allows you to collect critical data on the audience you’re targeting, particularly demographics.
You can also track your campaign and see which offers or messages generate the best engagement and interest.
You can thereafter combine all these elements to understand your audience better and to come up with offers that draw more customers to your business door.
5# Increases Brand Awareness
Geofencing is also great for increasing brand awareness.
It allows you to place your brand in front of your target audience. The more they see your notifications and push messages, the more they’ll be thinking about your brand.
You can also use it to remind your customers to choose your brand over your competitors by giving them an offer they can’t resist.
6# Beat Your Competition
Regardless of what industry you are in, there will always be another business you’ll be competing against. They want a bigger share of the customers you’re eyeing, and they have a few tricks up their sleeves on how to lure them their way.
Now back to you, “what’s your ace in the hole?”
Well, if you haven’t figured out something already, then consider throwing in geofencing.
That’s right – geofencing can be a great strategy for gaining an edge over your competitors. Every time someone sets foot inside your fence you can immediately send them a message on your offer.
You’re simply enticing them to consider shopping with you, and not with any of your competitors. It’s more like telling them this is the best offer they can find and that they shouldn’t look elsewhere.
Geofencing Ads You Can Use to Target Your Audience
Geotargeting is an excellent strategy for targeting a specific audience. It allows you to send targeted ads of your products or services to a prospective customer that sets foot inside your geofence or boundary.
However, you want to note that you’re not limited to just sending one form of ad.
The ads you send can take the form of text messages, push notifications, or PPC ads, delivered right through your customer’s mobile device or web browser.
Geofencing with Push Notifications
This is the most common geofencing ads marketers use.
Imagine running a boutique and have a shopping app to accompany it. When a user downloads the app and it happens that you’re running a geofencing campaign, you can set it such that they’ll be receiving a push notification every time they step into your area.
A push notification refers to the messages that appear on your smartphone screen or web browser, usually send via an app or website.
To find out more about push notifications, here’re two articles to read:
Bear in mind that the message will still be sent even if the user hasn’t opened the app or isn’t going through your website.
For example, if you’re selling women tank tops, and it just so happens a customer with your app installed on their mobile device passes near your shop, a push notification will be automatically sent to them reminding them of your great offer or promotion.
Geofencing with Text Messages
To geofence prospective customer with text messages, you first have to figure out how you’re going to obtain their contact details, especially their phone number.
That way, you can start sending them automated messages whenever they set foot inside your geofence location.
You can use the text to inform them about your new stock, a sale you’re making or an offer you have. Or you could send them a message reminding them that they’re near your store and that you’ll appreciate it more if they stopped by.
Geofencing with PP Ads
Geofencing also works great with PPC Ads.
Some marketing tools such as Google Ads offer location targeting, which is quite similar to geofencing –but without virtual boundaries.
PPC ads work almost the same as geofencing. If a potential customer steps into your geofence, the ads become visible.
For example, let’s imagine you own a Chinese food restaurant. A couple walking a few blocks from your restaurant happen to be searching for the best Chinese restaurant.
Of course, there are other Chinese restaurants around. And for that very reason, you’ve decided to target the keyword “the best Chinese restaurant.”
With geofencing, you can map a three-block radius from your restaurant for your PPC ads to be served to patrons searching for a Chinese restaurant within this region.
Is Geofencing Accurate?
The accuracy of geofencing, for the most part, depends on the technology you’re using.
To increase its level of accuracy, you must try to combine it with cellular, Wi-Fi, and GPS data.
If you’re operating from an environment where Wi-Fi routers and cellphone data are everywhere, then the accuracy of geofencing can stretch up to 200 sq. meters.
However, if there isn’t a cell phone tower nearly or many Wi-Fi router around, then their accuracy can extend to cover a few hundred meters.
Note that geofencing tends to work best when you have activated your GPS settings and enabled your smartphone Wi-Fi.
Does Your Business Really Need Geofencing?
Geofencing is a great marketing strategy for a local business, especially if you heavily rely on store visits for sale.
Here are a few things geofencing can help your business with:
- Help you engage with local customers
- Help you attract a prospective customer
- Snag your competitors’ customers
- Increase brand awareness
Different Categories of Geofencing
There are so many categories of geofencing. But it all depends on how you choose to segment it.
Speaking of which, geofencing can be broken down based on component, technology, vertical, and deployment.
- Mobile Geofencing
- Fixed Geofencing
- Cellular Network
- On cloud
- Transportation and Logistics
6 Common Applications of Geofencing
The benefits of geofencing stretch far and wide. But to get a better idea of how your organization might benefit from its implementation, then you might want to take a closer look at some of its applications:
1# Blast Zones:
Ever set foot in a major mining area?
If so, then you’ve probably seen or heard of their potential hazards.
Now, when it’s time to blast the ground to loosen up some iron ore, the first thing miners do is make sure no one is around the blast area.
For this, they use a geofence to alert the people around of any incoming blast.
2# Yard and Site
Geofencing is common on yard sites.
If your job involves having workers transport supplies and equipment from a yard or home base to a worksite, a geofence can help you log how many times the worker moved back and forth.
For example, you may use it to find out how many trips a truck made to the yard to fill up before dropping its load at the site.
Geofencing doesn’t just track who’s entering or leaving a specified zone area. It can also be used to keep people who are already occupying a certain area.
You can use geofencing to keep people within the specified area. That way, you’ll be notified immediately in case any person tries to leave.
For example, if your organization operates with region-specific employees — for example, a taxi service. You can use geofencing to ensure your staff stays where they’re supposed to be.
In case of critical situations, geofencing can be a great way to set up emergency zones for evacuation and warning.
For example, in the case of fire, geofencing can be used to cover the specified danger zone for evacuation.
Once this area has been mapped out, you can use geofencing to find out which user is still in the red alert zone and even send them a message to warn them of any incoming danger.
5# No-go Zones
No-go zones are quite similar to emergency and blast geofences, only that it’s for areas that people aren’t allowed to go.
It doesn’t necessarily have to be for safety reasons. Environment protected or security-sensitive areas are two good examples of no-go zones that could work with geofencing.
6# Speed Limiting
Heavy industry facilities such as mining sites tend to have certain areas where you’re not supposed to go beyond a certain speed limit.
You can use a speed-limiting geofence to track any cases of over-speeding and send warning messages if necessary.
You can even set different speed limits throughout the day. In other words, you have so many speed-limiting options to work with.
And every time someone is recorded as speeding, it automatically gets stored on their event log, thus allowing managers and supervisors to sniff out serial offenders.
Technologies Used in Geofencing
Geofencing doesn’t happen in a vacuum. It’s enabled by four mobile technologies, used to identify the location and to implement the algorithm used on boundaries.
Here are the four technologies that facilitate geofencing:
All smartphone devices have an integrated Wi-Fi feature.
This gives it a good potential reach. It’s even better when it’s an open network. That means customers won’t even have to opt into your campaign to receive your messages.
The only downside is that it requires the customers to keep their Wi-Fi on, which most people don’t do because of the strain it puts on their battery.
This is one of the easiest and most accurate location tracking features you’ll ever come across. It’s easy and doesn’t require any extra effort from the customer.
It’s also battery-friendly.
The only downside is that it’s investment heavy.
GPS is a cost-effective location tracking technology.
The technology works better with outdoor tracking. It’s also a perfect complement to other location-based technologies, such as Wi-FI.
The only limitation is the heavy battery drainage. It’s also not that accurate when used indoors.
4# Bluetooth Beacons
Bluetooth beacons are a popular way to identify device location. The technology relies on Bluetooth.
They can identify all devices within a signal radius of your Bluetooth device.
However, you’ll have to install the beacon devices in all the areas that you wish to track, which makes them quite hard to implement on large scale.
Geofence Marketing KPIs
So, how do you track your geofence marketing campaign to see if your strategy is working? How do you measure your success?
Simple, here are the KPIs to keep an eye on:
Click-through Rate: Click-through rate refers to the percentage number of times customers clicked o your ad or message after viewing it.
CTR helps you determine if your ad was served to the right audience or at the right time. If the CTR is too low, then the odds are good you’re targeting the wrong audience or at the wrong time.
It could also mean that you’re using a creative that isn’t that interesting or engaging.
Total Visit Rate: Total Visit Rate refers to the percentage number of people who saw your ad and came to your store or physical location.
For example, let’s assume the ad was served to 100K people, out of which 1000 visited your store, then the calculated TVR would be (1000/100000) *100 = 1%.
In which case, a higher TVR may mean your campaign is well-optimized at delivering on your marketing or ad spend.
Cost Per Conversion: How much must you spend just to get one person to take action? Cost Per Conversion is derived by dividing your campaign cost by the number of conversions you got.
A lower CPC may be interpreted to mean you did a good job of optimizing your geofencing campaign.
7 Key Things to Observe While Setting Up a Geofencing Marketing Campaign
Don’t assume. Before running any geofencing campaign, we suggest you take a few steps back and account for a few things.
These are things that might creep back to haunt you sometimes in the future if not hamper your success.
Before running a geofencing campaign, it would help to inform your app users that you’ll be tapping into their demographic or geographic data.
Be sure to inform them that you’ll only be using this data to send them promotional messages and deals and that you’re not planning to share it out with anyone else or a third party.
2# Battery Drainage
GPS relies on the four technologies we mentioned above. Some of these technologies are power-intensive, enough to drain the user’s battery.
So, given the options to choose between two technologies, you want to choose the one that’s a bit lenient on the customer’s battery life.
3# GPS Accuracy
You want your GPS tracker to be as accurate as possible.
To run a successful geofencing campaign, it helps to optimize your location’s accuracy and make sure there’s no interference.
You have to make sure there’s harmony between the fine location and course location coming from the user’s device.
Other than that, it’s important to ensure your target users have enabled location on their device.
4# The Three Types of Data to Collect
When collecting the data to optimize your geofencing campaign, it’s important to make sure the collected data displays the user’s prior visit history, foot traffic, and dwell time.
5# Actionable CTA
When setting up a geofencing campaign, you have to check all the triggered notifications and make sure they all have a concise, direct, and actionable CTA.
For a well-performing campaign, it would be helpful to also track and analyze everything.
Be sure to analyze the data you collect, as well as all the relevant user activities, and use them to make an informed decision.
6# Choose a Geofencing System with a Well-defined Dashboard
Make sure the geofencing system you use has a distinct and well-defined dashboard with all the bells and whistles that make it easy for you to manage your geofencing campaign from one central place.
7# Create an App
You need an app to run an effective geofencing campaign.
You need this app to send push notifications. So, in a way, it complements your geofencing campaign.
Keep in mind that it’s almost impossible to run a geofencing campaign san an app.
Some tools provide a geofencing SDK that can be integrated with any app to run an effective geofencing campaign. A prime example of such a tool is Beaconstac.
3 Examples of Companies that Use Geofencing
Here are three examples of well-known companies that use geofencing:
1# Dunking Donuts
Dunking Donuts partnered with Snapchat on World Donut day to use a geo-filter to get users to buy doughnuts.
The only way to unlock this feature was to visit a Dunkin Donuts outlet. Once this filter had been unlocked, the user would receive a free doughnut for every purchased cup of coffee.
2# Burger King
As we said, you’re not restricted to creating a geofence around your location only. You can also create a geofence around your competitor, to snag their customers.
It’s still healthy competition.
Burger King pulled this same strategy on McDonald’s but in a good way, through their “Whopper Detour” campaign.
They created a 600-feet geofence around McDonald’s restaurant. While they did encourage customers to go to McDonald’s, they used this opportunity to get more people to install their Burger King App. All they did was offer a one-cent Whopper burger that required the customer to install the app to unlock.
Walgreen is a pharmacy giant.
Not long ago they decided to revise their loyalty and reward program by restructuring it around geofencing.
Using in-store beacons, they would capture their app users’ attention and direct them to their loyalty and reward program status.
They would use this campaign to highlight the user’s current reward point balance, reward money balance, and milestone journey.
They did this to encourage users to collect more loyalty points, cash in their balance, and initiate them to progress further into their reward journey.
5 Key Statistics that Corroborate the Fact That Geofencing is Important for Your Business
Every business out there can benefit from geofencing, and here are 5 statistical facts to corroborate this statement:’
- You’d expect that a majority of your prospective customers search for information while at home or their place of work. But as it turns out, 40% of customers search for this information while moving around (source).
- 70% of customers don’t mind sharing their location provided there’s something they’re gaining. You need a quid pro quo offer to get them to consider sharing their location (source).
- Users are more likely to visit a store after seeing their advert twice (source).
- 60% of consumers use their mobile phones when searching for local information (source).
- 30% of the population use location-based marketing
Geofencing Marketing Tools, Apps, and Software
Here’s a selection of apps, tools, and software solutions that can help you set up and manage your geofencing campaign.
- XAD: Eliminates guess from your campaign by serving your ads or marketing messages based on your users’ location. It does this by creating maps or boundaries around some of the places that your users commonly visit – for example, a shopping mall or restaurant.
- Koupon Media: Koupon Media prompts a targeted offer to shoppers whenever they’re near your store.
It can study the behavioural attribute of buyers inside a geofence and present a personalised offer that they can’t turn their backs on.
- NinthDecimal: NinthDecimal is another great tool for targeting users that are near your store or your competitor’s store. It also allows you to send targeted media ads through phone calls, couponing, and appointment requests.
6 Geofencing Strategies You Should Know
Looking to set up a geofencing marketing campaign? Here are 6 strategies to help you make the most out of the campaign you run:
Build Loyalty: You need to figure out how to convert your current customers into loyal customers of your brand. Figure out how to always stay on top of their minds.
One way to go about it is to tag them whenever they show up in your store while delivering ads that encourage them to make repeat purchases or come back to your store.
Start Attracting Customers that Pass Near Your Store: You can begin by setting up a geofence around your store. That way, any customer who walks nearby will be targeted with ads or marketing messages that encourage them to check you out.
There’s no Harm in Targeting Your Competitors’ Customers: You can target your competitors’ locations and serve your ads to their customers.
You can pluck a page from Burger King’s book. You don’t have to discourage them from visiting your competitor’s store or business. Instead, just place your ad in front of them and let them decide on where to go.
Advertise at Local Events: Use location and time targeting to advertise to prospective customers attending local events.
Build Brand Awareness: Target customers that are on the way to doing business with a company such as yourself. For example, an auto accident lawyer can auto-fence urgent care or an auto-body shop.
Pair Geofencing Ads with Direct Mail: If you’re running both direct mail and geofencing marketing campaign, then you can pair the two. Meaning, customers will get to view your messages both online and in print.