No, it’s not some fancy new version of a sport with thin swords.
It’s a fantastic technology that allows businesses to entice local traffic into their space for increasing sales.
When a device like a smartphone or tablet enters a pre-selected digital boundary, businesses can trigger actions like coupons, notifications, or other engagement tools so potential customers are aware of that business’s location and offers.
For example, a hungry couple is driving near your restaurant looking for parking, and their proximity triggers a push notification from your establishment for a 10% discount on an entrée, plus parking validation. The passenger directs the driver to the nearest parking spot, and they enjoy their first meal at your restaurant. If they were on the fence about where to eat, you’ve answered that need for them in a smart, business savvy way they’ll likely remember the next time they’re driving by.
Why Consider Geofencing in Your Marketing?
But that sounds difficult, you say. That’s really technical, you say. “I’m not sure I can set something like that up,” you say. Here are some reasons not to write geofencing off as a marketing strategy:
- Mobile phone searches for local information is the starting point for 60% of consumers
- 70% of smartphone users are willing to share their location with you in exchange for savings and offers.
- Location based ads are twice as effective as non-location based ads.
If that doesn’t convince you, think about it this way:
SEO rankings are improved by broadcasting your geographical location, and proximity means people are more likely to pay attention to your ad than the one from the restaurant in the adjacent town.
Local sales statistically improve with geo-location based ads.
Second, local customers are harder to get data on. You can’t ask a bunch of questions about a customer’s demographic while you’re ringing up their purchases. They’ll find it a little creepy if you want their age, shopping habits, and other pretty personal information.
But with geofencing, you can connect customers to the promotions that attracted them when they come in to redeem them. You can measure how long they were in your store, how often they’re in your neighborhood, and how frequently they stop in when they’re nearby. If they like the coffee shop around the corner, you can offer them a discount at your bookstore to pick something up to read while they sip their latte. Your metrics and data gathering improve.
You can also personalize.
You’ll learn better the demographics of your most immediate local population, including what kinds of offers they’ll spend their energy on. With repeat customers, you can learn what specific products they prefer, and you can specifically promote to them. If Sally who works down the street likes your pecan pie cupcakes with cream cheese frosting, you can put her on the list of people who receive a notification the day that flavor is available in your café.
Now, the Rules
I know, no one likes a bunch of rules, but these will help you avoid making mistakes and learning the hard way.
First, geofencing pretty much requires mobile advertising. Most people aren’t hauling around a laptop while they’re walking past your establishment. Your notification needs to be convenient to them.
That means email, text, or push notifications they’ll easily access. But don’t entirely forget about laptops and tablets either, particularly if your business is located in a busy retail area or business park. If you have a fantastic lunch service in your restaurant, catering to nearby workers who know they can be in and out during their lunch hour is wise. Once you learn a bit about who’s nearby, you can segment your advertising to reach those workers, or time it accordingly, so during the day you send out email offers, but at night, you concentrate more on text-based notifications.
Second, people have to be in an area around your location where they can look at their device. Your push notification isn’t going to get noticed if it pings people driving by on the interstate next to your business. For that, you’re better off with a billboard. But the park across the street is a fantastic location to ensure is within your geofence.
Third, users often must be within an app or on a mobile browser to see your notification. If they’re on the phone, they’re not in the right environment to be receiving your ad or offer. But if they’re browsing social media, your targeted ads should pop right up. Better yet, if your business offers a mobile app, such as Target’s Cartwheel or a restaurant rewards program app, so much the better. You can get their agreement in your terms of service to allow you to send them banner notifications when they’re within range of your store, so they’re more likely to see it even if they’re not specifically in your app at that moment.
Consider your boundary wisely.
You don’t want to blend too much into another business’s boundary or onto a road where your notifications could cause distraction. If you’ve got a lot of businesses in your location competing for the same customer’s attention, their phone is going to buzz and chime to the point of distraction, and they may just get frustrated and turn it off entirely.
So if you’re a store in a mall, for example, and you’re competing for attention with the entire food court, you can geofence the food court outside your boundary so you’re not going to compete with those offers until the customer is through that gauntlet and will actually see your notification in all the noise.
How to Plan Your Geofencing Marketing Strategy
It starts with customer insights. Know your audience. Are you marketing for college students when you’re located next to a retirement community? You’re probably not going to get a lot of engagement. You want people to use what you’re offering.
Keep it proximal. Stick to a 4-5 minute rule. If it’s a lot of foot traffic you’re enticing, keep it to a 4-5 minute walk from your front door. If it’s a drive, consider the most typical transport distance.
Use urgency to your advantage. Notifying them of offers that’ll expire soon will make people want to come in immediately to take advantage. Be clear about what you want them to do and when.
Respect their privacy. Tell people up front, particularly if you offer a mobile app, which specific information of theirs you’re using. Some people are skittish about giving away their location. If you assure them you don’t track them all over town, just when they enter and exit your geofence, you’ll establish trust. It matters.
Context is key. If it’s 5 p.m., don’t offer a lunch special. If it’s summer, don’t put up a sale on winter clothing. It’s pretty simple. Do what makes sense for your business at that time.
Think Outside the Box
North Face, one of the outdoor apparel giants, uses geofencing to let people know the weather in the moment. If it’s about to rain, they’ll offer a discount on umbrellas or waterproof outdoor gear. After adopting this strategy, the company has seen a 79% increase in store visits from those receiving the alerts, and 65% of those people buy something while they’re there.
One of our biggest assets is our car, and BMW knows this. They’ve incorporated geofencing in a new way because they know a push notification isn’t going to trigger someone to come buy a new car on a whim. Instead, they set the geofence to the car, not their dealership. If a BMW owner’s car gets moved outside of a designated geofence without the use of its keys, the tracking services they have set up in the car (similar to OnStar) will notify BMW, who will then contact the owner.
Uber targeted big travel locations, such as airports, which will ping newly arrived potential passengers to let them know just how many Uber drivers are available to take them to their next stop on their trip. They’re anticipating these travelers’ needs and filling in the gap before that customer has the chance to think about using someone else. It’s the digital version of the taxi queue.
Geofencing doesn’t have to be too technical, or too complex to be effective. But done right, you can reward loyal customers who enter your geofence boundary as well as entice new customers who may not have known about you before. In fact, considering geofencing in conjunction with experiential marketing strategies, you may just become impossible for local customers to ignore.