Geofencing Marketing

Planning to expand your business among target customers based on their geographic locations? We bring you geofencing marketing that’ll help you do just that.

Danny Mahoney

Danny Mahoney — 14 minute read.

Online shopping and digital marketing have taken the world by storm over the past decade.

And geofencing marketing has proven to be a valuable digital marketing strategy. But before you implement geofencing marketing for business expansion, it’s best to get your basics clear about the concept.

More or less, everyone uses a smartphone in recent times. So, geofencing marketing is a location-based marketing strategy that helps target customers based on their smartphone locations.

Geofencing Marketing

You can track the location data of the target customers and attract them to your business via geofencing marketing. Customers can access your services based on their locations with a simple touch on their smartphones.

But, how does geofencing marketing work? We’re here to talk about geofencing marketing campaigns and how they can help expand your businesses in today’s digital world.

So, without any more jibber-jabber, let’s get going!

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What Is Geofencing Marketing?

Geofencing marketing is a location-based marketing strategy businesses use to attract new customers. The smartphones send relevant messages to users entering a predetermined boundary or geographic area.

Geofencing Infographic

Most people spend their time scrolling through their smartphones. Hence, tracking the smartphone location of target customers has become an excellent strategy, which is why geofencing marketing has become an essential advertising tool.

Remember the nearby Mcdonald’s ad that you came across while scrolling through Facebook? That was no coincidence because geofencing marketing allows businesses to use the Global Positioning System (GPS) and radio frequency identifiers to track down their real-world location. So, any company, including McDonald’s, can track down customers within a particular geographical radius and attract them using geofencing marketing.

The abundance of smartphones has resulted in the boom of geofencing marketing over the past few years. Everything you need to know is readily available at a button by leveraging geofencing marketing, whether you’re looking for a grocery store or a medical clinic.

It’s easy, hassle-free, and an excellent strategy to expand any business in a local market among the target customers to a brick and mortar store.

How Does Geofencing Marketing Work?

Using GPS signals, geofencing technology determines when a customer enters a boundary. They can be set up virtually anywhere, as long as they are within the boundaries of the businesses' physical locations.

Knowing the basics isn’t enough to implement a geofencing marketing strategy for expanding your business. You need to dig deep and understand how geofencing works to attract target customers. It’s a three-step process, and we’re here to discuss all the steps. So, let’s take a look!

Process Geofencing

1. Set Up Your Real-World Business Location

First and foremost, set up the virtual geofencing radius of your business location around an actual geographical area. Geofencing marketing allows you to track the nearby base using the geographic location. Avoid setting up a vast geographical area because it’ll make tracking and targeting customers much harder, negatively impacting your marketing efforts.

Once you identify a suitable real-world location, you need to set up the geofence or virtual barrier around that area to target and attract potential customers. It’s always best to keep the geofence radius small to enhance the efficiency of this digital marketing strategy.

2. Deliver Customised Notifications To Customers

After setting up the virtual geofence barrier, it’s time to target customers through ad scheduling. You can send custom notifications and location-based ads about your business to several customers based on their location through geofencing marketing.

Let’s say a customer wants to order some snacks; the geofencing marketing strategy of a nearby fast food joint can help gain the customer’s attention towards its services.

Once you start delivering notifications and ads to nearby customers, they’ll become aware of your services, automatically enhancing business visibility. If customers are within the geofencing radius of your business, sending notifications or geofencing ads on their mobile devices can help to attract them to your services. Hence, it can be very effective in making your business known to the local customers.

3. Track Location Data Of Target Customers

When it comes to geofencing advertising, you need to constantly update your target customers’ location. Through this powerful marketing tool, you essentially track the particular location of customers to check whether they are in the vicinity of your business.

Hence, you can gather the data regarding the locations of potential customers and keep on updating it to send them customised ads, notifications, or newsletters about your business.

You can also identify which customer has been within the geofence range of your business by tracking the data of the customer’s location. It’s an effective way to target customers and keep a close tab on their current locations to provide your business services efficiently.

Beaconing Vs. Geofencing

Geo Targeting Geofencing Beaconing

Beacon technology is a location-based marketing strategy similar to geofencing but has specific differences. While the former targets customers’ mobile devices based on their locations, the latter sets up a unique virtual marketing boundary to send targeted messages to any device. Thus, geofencing is not limited to the mobile device location of a customer, like beaconing.

Also, in geofencing, you get to set a virtual geographical boundary to target potential customers once they enter that boundary. In contrast, there’s no marketing boundary in beaconing. Instead, any mobile users near the beaconing device’s vicinity gets the targeted message. So, you don’t get to choose your marketing location in this method.

Geotargeting Vs. Geofencing

Geotargeting works on a larger geographical scale than geofencing. It tracks down the geographical location of the desktop of target customers to send them targeted messages or notifications about a business. You don’t get to set a virtual perimeter for geotargeting, and it’s only limited to desktops.

As geofencing covers a restricted geographical radius, it offers more accurate data about your target customers’ location than geotargeting. Thus, geofencing is a better marketing strategy for interacting with nearby customers and offering them customised services.

But, if you want to target a more extensive customer base in the global market, geotargeting might be more effective.

What Technologies Does Geofencing Marketing Use?

A few decades ago, it was an impossible dream for business owners to track the location of target customers for marketing and advertising. But, with the tremendous development of technology over the years, that dream has become a plausible reality.

Geofencing marketing is one of the most prominent examples of location-based marketing, and it relies on several location-based technologies, such as GPS, WiFi, Bluetooth, and radio-frequency identification (RFID). With geofencing technology, it’s possible to reach your target audience by tracking their location within the geofence radius and enlarging your business’s customer base.

Using these technologies mentioned above, you can accurately track the customers’ location to 1000 square feet. Thus, geofence marketing advertises to users close to your actual business location using some top-class location-based technologies.

Why Do Businesses Need Geofencing Marketing?

In Geofencing Marketing, users are detected within a fence based on their presence. Customers who are in a specific area are attracted by this method. They may receive a mobile notification when they are at least 50 meters away from the location. Making geofencing exceptionally powerful for local business ads.

1. Enhance Customer Loyalty

If you want to survive in today’s world, gaining customer loyalty is non-negotiable. Earning new customers isn’t enough to achieve a competitive advantage. It would be best if you also worked on retaining old customers and building a loyal customer base.

But, how can geofencing marketing help in enhancing customer loyalty? Geofencing marketing works to offer customised mobile ads and push notifications to customers based on their physical location.

By implementing a successful geofencing marketing campaign, you interact with local customers and offer them customised services without spamming or irrelevant promotions. So, when you’re delivering high-quality customised services to customers without any unnecessary promotional ads, they’ll automatically be more attracted to your business. Thus, you can gain customer loyalty and enhance your local sales through geofencing mobile marketing.

Cost Customer Acquision Statistic

2. Optimise Data

One of the core parts of geofencing is data analytics, as the entire advertising strategy runs on data. You gather real-time data to keep your marketing campaign relevant and profitable. It’s best to continuously optimise the collected data by monitoring ad views and customer visits to your business location.

Not only that, but by optimising data, you can also keep on updating your geofencing marketing campaign. Say you’re not getting good customer responses to your business promotions; data optimisation will help identify the drawback. You might be targeting the wrong customer section or the wrong location, which you can resolve through geofencing digital advertising.

3. Improve Customer Engagement

Optimising gathered data and constantly upgrading the marketing campaigns improves customer engagement. Once you identify what works for the target customers and what doesn’t, you can refine the marketing strategies to gain better results.

For instance, you can send two mobile ads to the target customers, one about gift vouchers and the other highlighting available service discounts. Then, you can track customers’ response rates to these two geofencing ads. By analysing which ad generates better leads, you can boost your marketing campaign and improve customer engagement.

Customer Engagement Graphic Aquireio

4. Gain Competitive Advantage

Another significant benefit of implementing geofence marketing is to gain a competitive advantage by intercepting target customers at the competitor’s location. You can add geofences to the competitors’ location and influence customers’ purchase behaviour by offering better business deals. You can influence the customers to visit your store instead of choosing the business rivals.

This marketing tactic can also help determine which customers prefer to visit your competitors’ businesses. So, you can set the geofence radius of the business accordingly to intercept more local customers and attract them to your services. In that way, you gain a significant competitive edge over your business rivals.

Common Locations To Target Via Geofencing

If you are implementing geofences for the first time, it’s natural to feel confused about which locations to target. Your business visibility and customer base will significantly depend on your targeted area. So, it’s always best to consider familiar places where you can get several customers while setting up the geofencing radius for your business.

Below, we’ve highlighted some common places that you can consider for your geofencing campaign:

  • Your business location
  • Competitors locations
  • Popular local events
  • Trade shows
  • Residential areas
  • Colleges
  • Nearby stores and streets

You can always include other geographic areas within the geofence radius. But, this list of locations will help you get a preliminary idea about the foot traffic within your geofence radius. Try to choose a well-populated geographic area that can bring you enough customers to run a profitable business venture.

Tips For Implementing Geofencing Marketing

If you’re not well-acquainted with geofencing, one question can haunt you for days- how to set up geofencing? So, in this section, we’ll discuss some easy tips that can help you implement successful geofencing marketing campaigns for your business.

Geo Targeting Effectiveness

1. Keep Your Geofence Small

The first thing you must remember while setting up geofencing is to keep the virtual perimeter small. Companies often get carried away and set up large perimeters for their geofencing, failing to create positive results. A customer won’t make a 30-minute drive to visit your store. Hence, keeping the geofencing radius small and compact is suitable for your business.

As a rule of thumb, it’s best to keep the targeted area at a four to five-minute walking distance from your actual store location for geofencing advertising. You might also increase the perimeter to a four to five-minute driving distance.

Remember that you want to make it convenient for the target users to reach you. By keeping the perimeter small and compact, you can encourage more customers to visit your store.

2. Focus On Your Target Audience

Know your audience - it’s a common principle in marketing and advertising. Once you understand the needs and demands of your target audience, it becomes easier to choose a target location that will generate promising results. You can also develop interactive mobile ads to engage customers and encourage them to hire your services.

Plus, you can work on targeting a new customer segment to enlarge your customer base by utilising all the gathered data on the target audience. If you have an active business page on social media platforms, you can interact with customers directly and gather their feedback regarding your business, products, or services.

3. Take Immediate Action

Developing interactive mobile ads is a crucial part of geofencing advertising. It would be best to create actionable ads, bring in positive customer responses, and generate promising leads. Remember that advertisements that are to-the-point and specific are more effective in attracting customers than spammy and irrelevant ads.

Try to create ads that naturally guide your customers through the buying funnel instead of forcing their purchase decisions. For instance, if you’re launching a new product, invite users for free trials of the product instead of asking them to buy it. In that way, customers will be naturally more attracted to the product.

Typical Sales Funnel Chart

Hence, create interactive geofencing ads that can take immediate action to target users and drive positive results.

4. Review Data Regularly

Implementing a geofencing marketing campaign isn’t worth anything if it cannot produce positive results. That’s why you need to regularly monitor the results from geofencing to optimise its success rate. If data analytics is not your forte, you can always collaborate with any geofence advertising company.

You can also use any geofencing marketing software to review your return on investment from geofencing. Hence, it’s crucial to regularly check your geofencing marketing data to stay top of the game. Plus, make the necessary modifications to your geofencing advertising strategy to optimise its success.

5. Use Different Targeting Techniques

When it comes to geofencing marketing, there are several targeting techniques that you can implement. For instance, content targeting can be an effective tool for targeted keyword searches. If your business website features SEO-friendly content, geofencing advertising will help you attract and bring in more customers.

Context targeting is also an effective marketing tool to help advertise your business content among customers. Through context targeting, you can feature your business ad beside relevant website content to bring in interested customers. Thus, applying different targeting techniques can help enhance the success rate of your geofencing advertising strategy.

6. Respect Privacy

With great power comes great responsibility, so when you have the power to track customers’ location, it’s also your responsibility to respect their privacy. Make sure that no third party can access the location data of your target customers.

Also, let your customers know that you have information about their locations to maintain absolute transparency. In that way, customers can trust your services and are more likely to return in the future.

Online Marketing Tools: Geofencing

When attracting target customers, geofencing marketing is an excellent digital marketing tool. It can inform your marketing team when the target audience is most active and which is the best location to promote your business endeavours.

However, if you’re new to the digital marketing world, you might require professional assistance to set up geofencing. If you need any assistance setting up geofencing marketing or location services, don’t hesitate to contact the team at sitecentre®. We can also help you collect data, identify your target market, and manage mobile advertisements. Let us know how we can help!

After going through our guide and geofencing marketing tips, we hope you have a better perspective of how geofencing works and what are its significant benefits.

This marketing tactic can enhance your customer engagement and witness better profit margins. Just avoid any breach of privacy and maintain absolute transparency with your customers.

And on that note, we bid you farewell. See you next time!

Danny Mahoney

Danny Mahoney

Danny is head of web design at sitecentre® and uses user-behaviour metrics to improve UX/UI and accelerate conversions. Using his unique combination of skills, Danny can deliver award-winning websites to SMBs quicker whilst delivering better results.

Find them on their website: sitecentre®, Facebook and LinkedIn.

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