Data Use Cases

What Is Geofencing? - A Primer to Geofence Marketing

What Is Geofencing? - A Primer to Geofence Marketing

What is geofencing?

Geofencing is a technology that uses GPS, RFID (Radio Frequency Identification), Wi-Fi, or cellular data signals to form a virtual boundary around a geographic location. This location is usually a point of interest, like your store or that of a competitor. The virtual boundary is called a “geofence”, and it serves to define the area around the location, establishing a clear inside and outside.


Geofences work using location data to send signals to devices. When a device moves either inside or outside the boundary of the geofence, a signal is sent which then triggers an action in the device, for example the sending of push notifications, emails, targeted advertisements or delivering location-based marketing data. In marketing, companies can use geofencing to target customers with timely, relevant messages about a product to encourage a purchase.

How does geofencing work?

To start using geofencing, you must first pinpoint your point of interest and then draw your virtual boundary around it. The boundary can be of any shape or size, and you can imagine this simply and quickly by using a mapping tool, like Google Maps, before then sketching it out using a proper geofencing tool. Once your geofence is drawn, you can now decide what the geofence’s signal will trigger (like a push notification or an email) and how it can be triggered, such as when a device crosses the boundary or spends a certain amount of time within or outside of it.

Your geofence can be active or passive, and it’s possible to have more than one of each type of geofence outlining the same area, targeting different groups.


Active geofences use live GPS or RFID signals and only work when an end user opts in to location services and has an application open on their device. This a highly effective way to directly reach and deliver ads to customers as it is showing the content you want directly to a willing audience at a time when they are engaged with your product, However, the downsides are the reliance on the customer opting-in, frequent inaccuracies and bugs, and how quickly it drains the battery. Though it should be noted that new techniques like caching relevant POIs based on estimated arrival time can help with minimising battery drain by only collecting location data at required times.


Passive geofences are always in the background, as they do not require any user permissions or engagement. They make use of Wi-Fi signals and cellular data. This means that they are unobtrusive and are great at collecting granular customer data. However, the main downside is that due to the lack of permissions required, you cannot directly send customers advertisements and therefore have little to no direct influence on their actions.

How does geofencing marketing work?

In marketing, geofencing can be used to improve the cost-efficiency and effectiveness of your overall campaign. It does this by helping you target interested consumers at times when they’re likely to buy.


With over 3.5 billion people carrying a smartphone around these days, we’re more accessible than ever. Implementing geofencing into your marketing strategy will enable you to reach people on the go, especially if they pass your store, and notify them about your product or service via their mobile phone. Geofencing can also be used inside your store to prompt lingering customers into taking action.


Even if the notification doesn’t lead directly to a purchase,you will at least gain a better idea of customer movement patterns, knowing where and when they received the message, which may help to refine future communications based on what was successful.

The common uses of geofencing in marketing are:

Personally reach out to customers near your store

In a recent survey, over 40% of smartphone users claimed that they are more likely to use apps that personalize in-app content by location. If a customer has opted-in to receive notifications, you can easily reach out to them with a personalized message and offer if they pass your store, making it more likely for them to make an immediate purchase or shop online later on.

Entice customers who have been away for a while

By monitoring the frequency at which a customer visits your store, you can entice back distancing customers with offers and interesting updates.

Geo Conquesting: Lure customers away from competitors

Set up a geofence around a competing store to send reminders to customers of your own store with offers and discounts, tempting them away from the competition. Just make sure that you don’t fall foul of any unfair competition laws that may be in effect in your country.


Deploy offers based on local events or holidays

Good marketing is omnipresent but not forceful, and a great way to ensure both of these qualities is by integrating your brand into a local event or holiday. Create seasonal or event-specific adverts and social media filters to capitalize on people’s attention to local events.

This Is How It’s Done

There are plenty of examples of companies making effective use of geofencing to ground or expand their business.

Snapchat

Ever since the introduction of “Snapchat filters”, Snapchat has capitalized on location data to send out geographically specific filters related to key monuments, businesses, and local events. Companies can boost their brand awareness by getting their own interesting filter or using Snapchat’s model as inspiration.


Uber

The car hiring service, Uber, is grounded in geofencing technology. Customers can see available drivers within a set distance around them. Drivers will have a geofence with a specific range within which they will accept pick-up requests. The company even made clever use of geofencing in its marketing by notifying people arriving at airports, like LAX, that an Uber ride to wherever they need to go is only a minute away.

Walmart

Capitalizing on the potential benefits of geofencing, Walmart created a store mode on their app which can be used by customers in store so they can be sent coupons and e-receipts.

Uses Cases Go Beyond Just Marketing

Smart Home Technologies

Not only companies can make use of geofencing: end users can also set up and use geofences with the help of smart home technologies and mobile apps. These apps can be programmed to trigger a specific alert or push notification when you reach a certain location or cross a certain threshold. For example, you might have your lights set to switch on when you’re 5 feet from your house. Or you might have a notification set to pop up on a specific day of the week when you arrive home to “Remember to go grocery shopping”.


Human Resources

Geofencing can simplify the tracking of employees’ location, movements, and work hours by monitoring how long the employee was in an area and what they did.


Fleet & Drone Management

Rental car companies track the whereabouts of their vehicles using geofences. They also monitor if the car has been used outside of domestic boundaries.
In a similar way, drones can detect “no-fly zones” established around airports and large sporting events, which can help protect the drone and those involved in the event.


Asset Management

Track company assets, like a company laptop, and receive notifications if the device is taken outside of company property.

Traffic Restrictions

Setting up a geofence is a quick and easy way to help organize both human and vehicle  traffic during large events by establishing pedestrian-only and one-way traffic zones.

What else should you know?

The benefits of implementing geofencing in your business are clear. However, there are a few things you need to be aware of in order to operate as legally and effectively as possible.

Be sure to follow data privacy laws

As geofencing requires the use of personal private data, like location data, it is vital that your collection and use of the data conforms to laws like GDPA in Europe and CCPA in California. This does mean that some people will simply opt-out of location services and not be reachable by your geofence, but it prevents messy legal situations.


Be careful not to overwhelm your customers with notifications

No one likes to feel forced into a purchase, so try not to be too pushy with the frequency of your alerts. Also be aware of how your notifications work in combination with those from other companies with overlapping geofences, so as to not overload customers. To get around this, carefully plan your geofences and be careful not to spam customers.


Large-scale geofencing can require a lot of maintenance.

This is especially true in the case of app-based geofencing, where it can be hard to stay on top of things like constant updates and bug fixes, not to mention updating all your businesses’ notifications to ensure effective targeting. However, when managed on an effective scale that doesn’t overreach your business’s capacities, the benefits to geofencing far outweigh the costs.


However good geofencing is, it does not work alone.

A geofence will not get everyone. People will opt-out, turn off their Wi-Fi/mobile data, and simply not use your app. Geofencing should be used as one part of a broader marketing campaign and when used as such it will be able to both facilitate other strategies and shine in its own right.

The Future of Geofencing

With technology becoming ever more integrated into our lives, it’s easy to predict that geofencing will become even more widely used than it is today. With top players like Uber and Walmart leading the way, more marketers will feel secure in adopting  geofencing as part of their overall strategy, and the potential uses of geofences will continue to expand.

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