Everyone carries their phone with them everywhere, making mobile phones a crucial and effective platform for geofencing.

97% of people in the US own a mobile phone, and 85% use a smartphone. Why is that significant? Location data drives this type of marketing campaign with geofencing tech that are powered by phones.

In this article, we’ll dive into how to utilize the power of location-based marketing.

How Geofencing Works?

Geofencing works by defining the virtual perimeter around your business’ specific physical location. Then, it uses technology to detect when a device crosses or exits this said boundary.

Let’s do a simple walkthrough of how it works:

1. First, you need to define your geofence. Most of the time, you will use mapping software to set up the virtual boundary of your geographical location. The shape of the boundary could be circular, rectangular, or even custom-shaped.

2. Next, you will set up the technology used for detection. The most common are GPS, cellular data, Wi-Fi, and RFID. GPS (Global Positioning System) gives a device location from using satellite signals. Meanwhile, cellular data does so by pings of cell tower signals. Tags are detected by RFID through radio waves, while proximity to Wi-Fi hotspots is used by Wi-Fi.

3. Of course, you would then need to monitor and track the location of the devices continuously. Some choose to perform the tracking in real-time while others do it at set intervals.

4. Finally, here’s the most important part: triggering the action. You have to set a predefined action that would be triggered when a device crosses your geofence boundary. What actions? They could vary. But most common are push notifications and alerts.

5. After gathering your data for analysis, continuously update and adjust your strategy.

5 Benefits of Geofencing

1. Increased Relevance and Timeliness

The number one benefit of geofencing is targeted marketing. You can personalize the offers you give to customers based on where they are with contextual information. For example, a restaurant mobile app can give suggestions for nearby dining options. If they have access to real-time data, they can even update the customer with the waiting times, which is helpful to the customer. 

In terms of timeliness, the alerts occur in real-time when a user enters or exits the area. Businesses often use this to offer time-limited offers. 

2. Improved Customer Engagement

The personalization that geofencing can offer is amazing. It helps businesses tailor their marketing messages per individual. For example, you can offer specific offers and discounts for the customer who frequently visits compared to those who visit less. Or you may also give exclusive offers to first-time visitors. 

You can also be more creative and interactive with your location-based marketing. For example, in 2018, Burger King offered special deals when customers visited McDonald’s. How would that drive traffic to BK? Well, you’ll forget your Big Mac run when you receive a notification that you can get a Whopper for a penny instead, right? This #WhopperDetour shot the Burger King app into number one in Apple’s App Store under the food and drinks category at the time.

3. Increased Foot Traffic

With targeted advertising, customers are more likely to get their attention captured when they are in the specified area using proximity alerts. If the customer is in the vicinity, you can prompt them to stop by your store to use the offer. Since they are limited and only available for a short period of time, they create a feeling of urgency for customers to come in and incentivize their visit as well.

Another good way to utilize geofencing is through event notifications. If you have an upcoming event, activity, or sale, you can use it to notify or remind the customers when they visit or pass by. Some businesses also maximize using geofencing with in-store experiences like interactive displays and special in-store events.

4. Competitive Advantage

While geofencing is already popular in marketing, still, not all businesses employ it. The market nowadays can be crowded. You would need to stand out from the crowd by offering better services and prices. Targeted location-based marketing strategies can help you attract more customers and grow your business or brand presence. 

You can set yourself apart from the competition by offering more personalized and targeted campaigns. Like mentioned above, you can drive foot traffic to your business with real-time, time-limited promos. Another option is to automate loyalty rewards to encourage your customers to visit more often. You can also offer competitive prices that you can adjust in real-time. All of these tie together to better, more personalized strategies tailored for customers individually.

5. Valuable Data Collection

Geofencing technology also allows you to collect information about customers. For one, you can gain data about patterns of their foot traffic. You can even analyze their engagement rates. 

How is this important? Customer behavior.

If you have a good understanding of your customers’ behaviors, you can tailor and refine your strategies accordingly. 

But that’s not all. 

You can get even more granular with your data analysis. Here are some examples:

1. Aside from tracking a device’s entry and exit points, also track how long they stay in the area.

2. How often do they visit? 

3. The interactions and app usage that occurred during their visit—clicks and responses.

4. Look into the demographics of your customers—age, gender, interests, and preferences.

5. Identify foot traffic patterns. Information you can get from it are peak times and days of the week.

Challenges to note

Geofencing, while powerful, faces several challenges that businesses must navigate carefully. 

The most common concern is privacy, and understandably so. Customers can be wary when they know you are tracking their location and find it intrusive. To navigate this, you should be transparent about collecting their location information. Make it easy to opt in and opt out of this option to avoid leading to distrust.

Battery drain is another significant issue. The constant tracking of the technology, mostly using GPS, consumes a lot of power. Even when the app is not in use, the geofencing app may still run in the background and processing data. This can be mitigated by optimizing tracking frequency and using complementary technologies like Wi-Fi or Bluetooth beacons. 

Technical limitations affecting accuracy pose another hurdle but can be overcome by employing multiple location technologies and implementing machine learning algorithms to improve precision over time. 

Lastly, the risk of over-notification can lead to user frustration and disengagement. To combat this, businesses should set reasonable limits on notification frequency and use AI-powered tools like SpeedyBrand.io to craft personalized, relevant content for each notification. 

By addressing these challenges head-on, companies can harness geofencing's full potential while maintaining user trust and engagement. 

The key lies in providing value to the user – when implemented correctly, geofencing can significantly enhance the customer experience. The result? Increased loyalty and business growth.

5 Best Practices for Geofencing

1. Define Geofences Strategically

To be able to define your geofences, you must first identify your objective. What, specifically, do you want to achieve? Is it to increase foot traffic? Do you want to boost customer engagement?

From here, you can design your geofence to align your goal accordingly.

2. Personalize Messages

Importantly, you should know your customers. The most basic and important way to do so is by segmenting. Segment your customers based on demographics, interests, and behaviors accordingly.

With contextual data from the user’s location, you can personalize your business messaging even more. For example, offer suggestions for nearby services and promo.

3. Ensure Compliance

Local laws can differ from location to location. Make sure to look into privacy laws and regulations in your area. It’s GDPR (General Data Protection Regulation) in the EU. In California, it’s CCPA or California Consumer Privacy Act.

Next, you must always get consent explicitly. Apps often do this through a pop-up after the first sign-in to the app. 

4. Integrate Geofencing with Other Marketing Channels

Combining geofencing with email marketing or SMS campaigns can strengthen messages and maintain brand recognition with customers. A cross-channel strategy with email, SMS, and social media is used for a unified customer journey. With this, you still need to maintain your messaging’s voice and tone stay consistent.

Educational institutions and career counseling services can use geofencing to reach out to individuals seeking short, high-paying careers. Institutions can attract more students to their programs by sending targeted messages about short careers that pay well and certifications through geofences set up around high schools, career fairs, and community centers.

5. Continuously Monitor and Optimize

Regularly analyze campaign performance metrics and user feedback to optimize and enhance future geofencing efforts. Tracking important metrics like engagement and conversion rates allows for the identification of areas that need improvement.

SpeedyBrand.io is a thorough SEO tool powered by AI, ideal for companies aiming to enhance their complete digital marketing strategy, such as utilizing geofencing. It offers features for strategy development, content creation, and analytics, which can help businesses create engaging content that ranks well and drives organic traffic. This tool can be particularly useful for integrating geofencing insights with broader SEO strategies.

Conclusion

Geofencing presents a valuable opportunity for businesses, big or small, to connect with customers personally in real-time based on their location. 

This is where SpeedyBrand.io can help. The AI-powered platform offers everything you need to create engaging, SEO-optimized content that complements your geofencing efforts and boosts your overall digital marketing performance.

Start your 3-day free trial of SpeedyBrand.io today and see how their advanced AI can transform your content strategy!