How to design a winning geofencing strategy for your business

Put location-based marketing and advertising to work for your business

Geofencing is a location-based technology that uses virtual boundaries or geographical parameters to trigger specific actions or notifications when a mobile device enters or exits a designated area. The term is a combination of “geo,” which refers to geography or location, and “fencing,” which indicates the creation of a digital boundary.

At its core, geofencing relies on global positioning system (GPS), wi-fi, cellular data, or a combination of these technologies to define and monitor the boundaries of a predefined geographic area. This can range from a small radius around a point of interest, such as a store or a landmark, to larger, more complex shapes encompassing neighborhoods, cities, and even entire nations.

The primary purpose of geofencing is to enable location-specific interactions, which provides businesses, marketers, and developers with a powerful tool that allows them to engage with users based on their real-time location. Geofencing can be employed in various settings, including retail, marketing, security, and logistics.

In retail and marketing, businesses can leverage geofencing to send targeted and personalized notifications, promotions, or advertisements to users’ mobile devices when they enter a predefined area. This proximity-based marketing strategy can enhance customer engagement and even drive foot traffic to physical locations.

The implementation of geofencing has grown along with the proliferation of smartphones and location-aware devices. However, it also raises privacy concerns, as the technology involves tracking the movements of individuals. This means that the responsible and transparent use of geofencing is essential to address privacy considerations and maintain user trust.

What businesses can use geofencing?

Geofencing can help a wide range of businesses. Here are some examples of businesses that can effectively leverage geofencing:

• Retailers and local businesses: Retailers can use geofencing to send targeted promotions, discounts, or special offers to potential customers when they enter a specific radius around their stores. Local businesses such as restaurants or cafes can also use geofencing to attract foot traffic and increase customer engagement.
• Marketing and advertising agencies: Marketing professionals can use geofencing to deliver highly targeted and location-specific advertisements. This is particularly effective for events, product launches, or promotional campaigns where reaching a specific audience in a particular area is crucial.
• Real estate: Real estate agents and property developers can use geofencing to target potential buyers or renters in specific neighborhoods. They can send notifications about available properties, open houses, or relevant information to individuals within the geofenced areas.
• Event managers: Geofencing is valuable for event planners to enhance attendee experiences. They can send event details, schedules, and promotions to attendees in a venue or nearby areas.

• Restaurants and food delivery services: Restaurants and food delivery services can use geofencing to send targeted promotions or discounts to customers in the vicinity. Additionally, they can track delivery routes and estimate delivery times more accurately.
• Healthcare providers: Healthcare facilities can use geofencing for improved patient engagement. For instance, they can send appointment reminders, health tips, or relevant information to patients when they are near the healthcare facility.
• Transportation and logistics companies: Geofencing is crucial for logistics and transportation companies to optimize route planning, monitor deliveries, and enhance overall fleet management. It helps in ensuring timely and efficient transportation of goods.
• Financial institutions: Banks and financial institutions can use geofencing to enhance security measures. They can send alerts to customers when their credit cards are used in specific locations, which can help to detect and prevent fraudulent activities.
• Education institutions: Universities and schools can use geofencing to improve campus security and communication. They can send alerts to students and staff about important announcements or safety information when they are within the geofenced campus area.
• Tourism and hospitality: Geofencing can be employed by hotels, tourist attractions, and travel agencies to send location-specific promotions, recommendations, or information to tourists and travelers.

You can target your competitors using geofencing. While this can be a strategic marketing approach, it’s important to employ this practice ethically and legally. Here are some tips to get you started:

• Define geofenced areas: Identify the physical locations of your competitors, such as their stores, offices, or event locations. Set up geofences around these areas to create virtual boundaries.
• Understand local regulations: This is important! Make sure you understand privacy laws and regulations regarding geofencing in the specific locations where you plan to use it. Ensure that your strategy complies with all legal requirements to avoid any potential issues.
• Offer value: Provide real value to users within the geofenced areas. Instead of directly targeting competitors, focus on delivering relevant and helpful information, promotions, or incentives. This approach is more likely to engage potential customers positively.
• Craft compelling messages: Develop compelling and targeted messages that highlight your business’ strengths and what sets you apart from the others.
• Be personal: Personalize your messages based on user behavior and preferences. This can enhance the effectiveness of your geofencing campaign by tailoring content to the specific needs and interests of your target audience.
• Monitor and analyze data: Use analytics tools to monitor the performance of your geofencing campaign. Track metrics such as user engagement, click-through rates, and conversions. Analyzing data will help you refine your strategy and improve its effectiveness over time.
• Always respect privacy: Prioritize user privacy and obtain explicit consent when required. Be transparent about the data you collect and how they will be used. Avoid overly intrusive or frequent notifications that may lead to negative user experiences.
• Use timing wisely: Consider the timing of your messages. Sending notifications during peak business hours or when competitors are running specific promotions may be more effective. Be mindful of when your target audience is likely to be receptive to your messages. No one likes a late-night message!
• Test and optimize: Use A/B testing to assess different messaging strategies and optimize your geofencing campaign accordingly. Experiment with various creative elements, including images, copy, and calls to action, to determine what resonates best with your audience.
• Evaluate the results: Regularly evaluate the results of your geofencing efforts. Assess the return on investment (ROI) and make data-driven decisions to refine your approach. If certain geofenced areas or messages are not performing well, adjust your strategy accordingly.

How can malls use geofencing?

Geofencing can be a powerful tool for malls, which can use this strategy to enhance the shopping experience, engage customers, and drive foot traffic. Here are several ways malls can leverage geofencing:

• Promos: Set up geofences around the mall premises or specific stores within the mall. When shoppers enter these areas, send them targeted promotions, discounts, or special offers to encourage immediate purchases. This can help boost sales and attract customers to specific stores.
• Event promotion: Malls can use geofencing to promote events, sales, or special occasions happening within the mall. Send notifications to shoppers in the vicinity, informing them about upcoming events, product launches, or exclusive discounts during specific times.
• In-mall navigation: Implement geofencing to provide indoor navigation assistance to shoppers. You could offer a mall map, store directories, and real-time promotions based on the shopper’s location within the mall. This can enhance the overall shopping experience and help visitors discover new stores.
• Personalized recommendations: Malls can use geofencing to understand customer preferences based on their location and shopping history within the mall. You can send personalized recommendations for products, services, or restaurants nearby, which will enhance the relevance of marketing messages.
• Customer loyalty programs: Geofencing makes it easy to integrate geofencing with loyalty programs. When loyal customers enter the mall or specific stores, send them exclusive rewards, points, or personalized offers as a way to acknowledge and appreciate their loyalty.
• Feedback and surveys: You can use geofencing to encourage shoppers to provide feedback or participate in surveys when they exit the mall. You can also use it to trigger survey requests and offer incentives, such as discounts or entry into contests, to boost participation.
• Parking assistance: Geofencing can even be used in the mall’s parking areas. Send notifications about available parking spaces, promotions related to parking services, or reminders about the parking location.
• Flash sales and limited-time offers: Malls can create a sense of urgency by using geofencing to announce flash sales or limited-time offers when shoppers are close to specific stores. This can drive immediate action and increase impulse purchases.
• Social media engagement: Malls can encourage social media engagement by integrating geofencing with social platforms. You can prompt users to check in, share their location-based experiences, or participate in social media contests while they are within the mall.
• Safety and emergency notifications: Last (and hopefully least), malls can use geofencing for emergency alerts and safety notifications. In case of an emergency or urgent situation, malls can use geofencing to send timely information and instructions to shoppers within the mall.