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How Can Geofencing Marketing Work for Your Business?

Over the years, I have created marketing plans with a media mix of the usual suspects in traditional advertising (i.e., print, radio, outdoor) and digital (i.e., banner ads, interstitials, pay-per-click, content). Throughout those years, the technology for digital advertising that was hyper-targeted was developing at a reasonable pace. The terminology was even still in its infancy. I distinctly remember having a debate at one my agency jobs regardinig the connotations of referring to what is now commonly referred to as "tracking code" (a small snippet of code that is usually implemented as JavaScript in the HTML source code of a website) as a "web bug" or "tracking snippet." The former seemed to represent some parasite created for nefarious reasons: the radical concept of tracking web users' behaviors, site visits, geographic location, click paths, etc.

Fast forward to today when we have technology that is much more advanced and accepted (or ignored) for delivering, targeting, and tracking. Enter: geofencing. A technology that has emerged as a powerful tool for businesses. But what exactly is geofencing and how does it work?

What is geofencing?

What is geofencing? It may sound like a fancy term, but it's actually quite simple. Geofencing is a location-based marketing strategy that allows businesses to target specific areas or geographical boundaries with their advertisements and promotions. By creating virtual "fences" around desired locations, such as stores, events, or even entire cities, businesses can send targeted messages to users who enter or exit these predefined areas.

Geofencing has become increasingly popular due to its ability to reach consumers at precisely the right moment—when they are near your business or in proximity to your competitors. Whether you want to promote a sale at your retail store during lunch hour or advertise exclusive deals at an event venue where prospective customers are gathering, geofencing allows you to make a direct impact where it matters most: in real-time and in-person.

How does geofencing marketing work?

First, businesses set up virtual boundaries, or "geofences," around specific locations using GPS or RFID technology. These geofences can be as small as a single store or as large as an entire city. Geofences can even be addressable, established by using a list of addresses in a particular locale as a data point along with other criteria, such as household income, occupation, age, etc.


The Case of Bob's Roofing Company

For instance, I recently had a flyer for a local roofing company, let's call it Bob's Roofing Company, placed in the door handle of of my house. The company had people canvassing my neighborhood placing these at houses up and down my street throughout my neighborhood. This scattershot approach wastes time, paper, and manpower.

With geofencing, a campaign could be developed that would be based on a list of addresses in my neighborhood along with targeting data of the homes that were built in 1950 or earlier (i.e. older homes that would likely be in need of a new roof). A mobile ad could be pushed to these people, which would be much more accurate method that would yield a much better conversion rate—and more qualified leads.


With this precise form of marketing, messages can be delivered through various channels such as push notifications (through any of 600K+ apps on users' mobile devices), text messages, or even social media ads.

But here's where it gets really interesting – geofencing marketing isn't just limited to targeting people within a certain area. It also allows businesses to gather valuable data about consumer behavior and preferences.

By analyzing the data collected from individuals within the geofenced area, businesses can gain insights into customer demographics, shopping patterns, and even competitor activity. This information can then be used to refine marketing strategies and tailor future campaigns for maximum impact.


Geo-Conquesting: A competitive application of geofencing

Naturally, when one realizes the power and ability of geofencing technology, the concept of targeting your potential customers while they are in the vicinity of your competitors, which I mentioned briefly earlier. This is referred to as "Geo-conquesting." This terminology sounds like a collaboration between Alexander Von Humboldt and William Wallace (i.e. Braveheart), but there are some complexities beyond the immediate connotations it may elicit. I'll cover this in a separate article that will be posted in the coming weeks.


The benefits of geofencing marketing

The benefits of geofencing marketing are numerous and can have a significant impact on the success of your business. One major benefit is the ability to target specific locations with precision. By setting up virtual boundaries, or "geofences," around certain areas, you can ensure that your marketing messages reach only those individuals who are within that designated area. In some cases, if relevant, it can even be as granular as fencing specific section of a building. Three major benefits are:

Personalization and Relevance

This level of targeting allows for highly personalized and relevant advertising. For example, if you own a coffee shop and set up a geofence around nearby office buildings during morning rush hour, you can send targeted ads offering discounts on breakfast items or promoting your new specialty brew to people who are likely in need of a caffeine fix.

Ability to Drive Foot Traffic

Another benefit of geofencing marketing is its ability to drive foot traffic to brick-and-mortar stores. By sending timely and enticing offers directly to potential customers' mobile devices when they are near your store, you increase the likelihood that they will visit and make a purchase.

Data Insights

Geofencing also offers valuable data insights. With this technology, you can track customer behavior patterns such as how often they visit certain locations or their dwell time in specific areas. This information allows you to better understand your target audience and tailor future marketing campaigns accordingly.

Improved Customer Engagement

In addition, implementing geofencing marketing strategies can help improve customer engagement and loyalty. Sending personalized messages based on location not only captures attention but also makes customers feel valued by providing them with exclusive promotions or rewards for visiting certain locations.

By leveraging this technology effectively, businesses can increase brand awareness, drive customer engagement, boost sales conversions, and ultimately achieve greater success in today's competitive market landscape.

How to get started with geofencing marketing

As a business owner, it would be cost-effective for you to hire a competent, reputable marketing firm to create, launch, manage, monitor, and optimize your geofencing campaign. The marketing firm you hire will be able to do the following:

1. Define your target audience: Before diving into geofencing marketing, it's important to have a clear understanding of who your ideal customers are and where they are located. Identify the geographic areas that align with your business goals and will yield the highest ROI.

2. Set up your virtual boundaries: Once you've selected a platform, you'll need to set up virtual boundaries known as "geofences." These can be as broad or specific as you want them to be – from an entire city to just a few meters around your store.

3. Craft compelling messages: The success of any marketing campaign lies in its messaging. Create personalized and relevant content that will resonate with your target audience within the specified geofenced area. Tailor offers or promotions specifically for those within proximity of your business.

4. Monitor performance and optimize: Keep track of key metrics such as engagement rates, click-throughs, conversions, and ROI regularly. Use this data-driven feedback loop to make adjustments and optimize future campaigns for better results.

Remember that effective geofencing requires continuous monitoring and refinement based on customer behavior patterns and market trends. This is a task that the marketing firm can handle.

How much does a geofencing campaign cost?

How much would it cost to take advantage of this advanced technology? It may sound like a "salesy" thing to say, but ultimately it's better to focus on value rather than cost. In any case, a reasonably priced test campaign can be implemented to demonstrate the effectiveness of this marketing technology and how it can complement existing marketing campaigns, such as cost-per-click or social media marketing.

Final Thought

For those of us who have witnessed the evolution of digital marketing from the days when ad banners were king, it is mind-blowing how we have arrived at the application of geofencing technology—a wonderful confluence of technologies that creates a world of exciting marketing possibilities, one that deserves serious consideration.

Book a Discovery Session to discuss if Geofencing Marketing is a fit for your company's marketing goals.

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