Geofencing 101: Why your business needs to get on board?

Geofencing has quickly become one of the most popular technologies used to improve and refine marketing and advertising efforts in the modern age of location-based advertising.

In fact, a recent report by the LBMA (Location Based Marketing Association) found that 95% of businesses are currently already investing in location-based services. What is more interesting is that the majority of those who were not were planning to increase budgets and investments for the technology by the end of the year.

Interested in not getting left behind in the dust?

This article will help better acquaint you to the subject of geofencing, and how it can be applied to refine marketing strategies and drive business goals through location-based advertising efforts.

What is a geofencing?

When you think about it, the term “geofence” is pretty much kind of self-explanatory. The term “geo” stems from the Greek word gē meaning ‘earth’. This is why we see it in the use of words such as geography – the study of physical attributes of the earth, or geology – the science dealing with the physical structure, makeup, and history of the earth.

Geofencing, in a similar respect, references geographical, physical boundaries. A geofence is a virtual perimeter for a physical, geographic area. This perimeter can be in the form of a radius around a specific location on a map, or can be set up as a predefined set of boundaries.

Geofencing is a software solution which is pretty much dependent on cellular and Wi-Fi technology. It operates on a fixed, static radius relative to which location is chosen. Geofencing is typically used for ranges of anywhere from 50 to 50,000 meters and as a result, it is the best option for large areas (as opposed to in-store beacons for example, which operate at ranges of about 1 to 30 meters).

What is geofencing used for?

Geofencing is primarily used in conjunction with a location-based advertising or marketing strategy. For example, you could set up a geofence around a particular brick-and-mortar location which then pings various marketing alerts to consumers when they enter within the predefined range you’ve selected (for example, within 5 miles of your store). These alerts can include anything from in-app notifications to text messages and even social media ads.

Benefits of geofencing

There are numerous benefits to be had by leveraging geofencing in your location-based marketing efforts. This is primarily due to the fact that the vast majority of consumers pretty much live and breathe for their smart devices.

I mean, think about it – when was the last time you went a solid day without using your mobile phone? Furthermore, gone are the days when these devices are simply used for texting and calling. The advent of the social media age has ushered in a new era of mobile phone use.

Recent research has shown that there are over 294.15 million smartphone users in the United States alone. That’s a massive market to be missing out on. And today’s consumers not only connect socially through their mobile devices, but are also engaging in online content at record high levels.

In fact, a February 2021 survey found that the average U.S. consumer spends around 5-6 hours per day on their mobile devices. As a result, being able to leverage this valuable technology in order to improve mobile engagement with your consumers is crucial.

Data collection

One of the primary benefits of geofencing is that once it’s set up – you are able to glean valuable hyper-local insights into your consumers and track key metrics to help drive business goals. This is especially the case when they are used in conjunction with beacons.

For example, with geofencing, you have the ability to track, and as a result, better understand population movements over periods of time. This information can then be leveraged in order to understand key behaviors such as what times of day or days of the week individuals visit a particular area or location. With the use of heatmaps, you can also further understand the concentration of populations at an individual location.

Targeting

The various insights gleaned from this type of data collection can then be effectively translated into improved marketing and targeting efforts. Location-based technology such as geofencing gives you the ability to hyper-target not only your consumers, but prospects as well with location-based advertising messages.  

Why is this important? Because, at the end of the day, it’s not just about reaching  consumers; it’s about reaching them at the most opportune moment and being able to deliver engaging marketing messages seamlessly in a relevant and timely manner.

Personalization

Better data and better targeting give you the ability to craft even more personalized content for your customers and prospects. With geofencing, you have the ability to better understand the behavioral aspects of consumers within a certain geographic region. This means that you are able to better tailor your marketing pushes to fit the unique needs and characteristics of this population.

Brand engagement and recognition

Another great benefit of geofencing is the positive impact that it has on engagement levels. With richer sets of data at a more granular level, you’re able to effectively hyper target your audiences in a more unique and personalized manner.

This ultimately results in higher engagement levels from customers and prospects. For instance, did you know that the click-through-rate of your mobile ads have the potential to more than double if used in conjunction with geofencing?

Also, a recent study conducted by the LBMA cited that businesses found some of the most beneficial uses for location-based technologies to be, among other things, driving foot traffic to brick-and-mortar locations, and increasing POS sales and brand recall.

Competitiveness

Leveraging geofencing for your location-based advertising efforts is also an effective way to increase your competitive advantage in the market.

The LBMA releases an annual Global Location Trends Report on the state of location-based marketing industry which is always chock full of amazingly interesting insights.

One of particular note was that as of 2020, a whopping 62% of business survey respondents stated that they “have invested significantly or moderately” in location-based marketing.

Furthermore, 46% of businesses surveyed were specifically “engaging in local targeting via location services”.

Examples of companies successfully leveraging geofencing

So, we’ve spent a great deal of time expounding upon the various benefits and of geofencing and location-based technology. But, we also thought it would be nice to provide you with a few real-world examples of businesses who are doing it right.

Walmart geofencing

Walmart is a great example of a store that uses geofencing in a straightforward and direct way. The company’s app has a “Store Mode” that they use in order to boost in-store spending by delivering coupons and e-receipts to their customers.

Uber’s geofencing strategy

We’re not sure if you’ve heard about Uber’s long-term struggles with “The Man”, but this company definitely does anything in its power to fight against detrimental regulations and legislation. For example, at LAX, private hire cars don’t have the authorization to pick up passengers at the airport.

So, ever so clever Uber decided to set up geofencing just outside of the pickup area where drivers are able to wait for their fares. The company will also use this tactic in conjunction with the use of beacons so that when a passenger lands, they are immediately served with a marketing push offering driver services.

Sephora geofencing with beacons

Sephora is another company which utilizes geofencing in conjunction with beacon technology to send location-targeted messages and daily content on mobile devices. They also have an in-store companion feature which provides their customers with access to account information such as previous purchases, as well as reviews and recommendations for products.

Burger King trolls McDonalds with geofencing

And of course we can’t forget our favorite example on the list. Burger King used geofencing to create a perimeter around competitor McDonald locations so they could literally just troll the company. This “Whopper Detour” cleverly pinged customers when they entered within a predefined range of a McDonalds with one-cent Whopper deals. The result? Burger King’s app was downloaded over 1,000,000 times and got a hefty boost from the ninth spot in Apple’s App Store to first place in the food and drink category.

Conclusion

At the end of the day, it takes a robust location-based marketing and advertising strategy in order to be truly successful with geofencing.  Also, based on your unique business needs, you may find that geofencing is best used in conjunction with other technologies, such as beacons, in order for it to truly provide you with the level of granular insights you need to be successful.

If you’re interested in learning more about location-based services, then VisioneerIT is here to help. Not only can we assist you with implementing these services, but we can additionally help to provide you with valuable knowledge and advice to give you the peace of mind that your investment is trully going to be worthwhile.

‍Contact us today to learn more.

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