What Is Geofencing Marketing?
Geofencing marketing is specific location-based ads which allow marketing experts to more precisely target their advertising and content delivery based on the targeted area. A “geofence” is the physical boundaries of a target location. It could be a specific city, a zip code, a county, or a mileage range around a physical store location. It is also possible to configure multiple geofenced marketing channels for businesses with multiple locations. With geofencing marketing, marketers can resonate more strongly with the people living in those locations.
In a geofencing marketing strategy,
The marketing team develops advertisements and content tailored specifically to the consumers within the geofence. People living in New York City have vastly different needs and priorities than people living in rural Kansas, so developing content that appeals equally to both audiences would probably be an exercise in futility.
Geofencing functions by targeting internet-capable devices within the specified geofenced area. When customers travel into these areas, they may receive alerts or notifications about your brand’s current offers, limited-time promotions, and events where they can interact with your brand.
Location-based marketing with geofence technology essentially creates a virtual boundary that automatically targets consumers who cross the boundary into the geofenced area. Geofencing marketing is a powerful tool that allows marketing teams to deliver their brand’s messages to the right customers at the right times.
Businesses in today’s marketplace already know they need to expand their digital presence to stay ahead of the competition; casting too wide of a net, however, can backfire if you aren’t careful about your strategy. One way to ensure your net is where it should be is by leveraging Geofencing.
Geofencing is the concept of targeting your marketing efforts around a specific location. While most businesses operate online and sell to a wide range of customers across different locations, many still rely on their local consumer bases to stay in business. If you’re developing a multichannel marketing strategy for your brand, consider the potential of geofencing marketing.
Geofencing marketing is an excellent strategy if you want to bring more local customers to your door. This method of marketing focuses on a specific location instead of trying to appeal to a wider audience online.
Examples of Geofencing Marketing
Geofencing marketing can take many forms:
- A brick-and-mortar retail store could create a geofence in the area around the physical store location. For example, a business owner could target the geofence to a 25-mile radius around the store to focus on the closest potential customers.
- A business owner could set up a geofence intended to capture potential customers leaving a competitor’s location to entice them with more attractive deals.
- Companies that travel for marketing events and industry conferences could erect geofences around future stops to establish brand awareness in advance of their local appearances.
- Service-oriented businesses like law firms and healthcare providers can geofence their advertising efforts to specific service areas.
These are just a few potential applications of geofencing marketing that can have tremendously successful results. However, like any other type of digital marketing effort, it’s vital to conduct appropriate research to determine the best locations for geofences and to understand the potential return on investment that could come from this type of marketing campaign.
7 Benefits of Geofencing Marketing
Some business owners may wonder why it is important to try geofencing marketing. Wouldn’t appeal to a wider audience offer a higher return on the marketing investment by attracting more potential customers? This is a flawed approach to multichannel marketing. Like with anything else worth doing, it’s vital to focus on quality over quantity. Establishing a very strong brand presence in a smaller location is much more valuable in the long term than building a mediocre brand presence across a much wider area with a more detached potential customer base.
When you invest in geofencing marketing the right way, you can enjoy many tangible benefits that will help carry your company into the future:
- Keeping your geofence small means more precisely targeted marketing. When you connect with a local audience on a personal level, you inherently boost your brand’s image with those potential customers. When consumers know your brand is in touch with their local lifestyle, community, and topics relevant to the area, you create a stronger impression that increases the chances of that customer returning to do business with you in the future.
- You can create precisely targeted high-quality content more easily. High-quality content continues to reign supreme as the best way to improve your marketing success. When you cast a very wide geographical net for your content publication, it is automatically less likely to resonate with so many different people from so many locations. Geofencing marketing encourages more precisely constructed content aimed at a specific consumer base, ultimately building a stronger brand image for your company within the targeted area.
- Your brand can connect with the customers most likely to do business with you. Many companies sell online, and your brand may rely heavily on customer orders from well outside your physical store location. However, the local customers in your community are the backbone of your staying power as a brand. Your geofencing marketing efforts can help you cultivate a strong local following that you can expand over time, and you can create additional geofences if you build multiple retail locations.
- Geofencing marketing allows for timely content delivery. If you’re running a new promotion and want to get more customers in your door, a geofencing marketing campaign makes it easier to get the word out to the customers most likely to take advantage of limited-time offers at your brick-and-mortar store.
- Geofencing marketing is cheap and effective. If your marketing team is using the Google AdWords platform, your business already has the tools needed for an effective geofencing marketing campaign. Google allows businesses to set location-based parameters for their paid ads and business listings, and this functionality comes at no extra cost. You can set your paid ads to appear in international territories, within the US and Canada, within a specific region, in just one state, or a mileage radius you define.
- Geofencing can boost data-gathering efforts. When you target your marketing strategy to a specific geofenced area, you gather more detailed data from responding to customers than you would with a broader digital marketing campaign. When a customer visits your retail store in response to a geofenced advertisement, you can gather data about visit duration, spending, messaging effectiveness, and much more.
- A geofencing marketing strategy can enable your brand to deliver more personalized experiences to customers. The data gathered from a geofencing marketing campaign can help your marketing team develop content and promotions that align more closely with your targeted customers’ preferences, needs, goals, and interests.
Ultimately, any brand with a physical retail store and a digital presence should understand how geofencing marketing works and the potential benefits of developing this type of marketing strategy. Over time, a geofencing marketing campaign helps to build a brand’s local following and credibility, and business leaders can expand their organizations physically and digitally with greater confidence thanks to the insights gleaned from detailed geofencing marketing campaigns.
How These 5 Brands Expanded Recognition Using Geofencing
Over the past several years, marketers have realized that modern consumers desire more personalized interactions with authentic brands. Marketing strategies have adjusted, and the accepted best practices that worked ten or even just five years ago no longer apply. Today, it’s essential for marketers to precisely target their campaigns. While many marketers rely on data gathering tools to find out as much as they can about as many potential customers as they can, a few have realized that their precise targeting should pertain to geographic location as well. This realization spurred the rise of geofencing, the concept of targeting marketing materials to specific geographic areas.
With each year, geofencing becomes more mainstream. We probably recognize it most easily in retail, but industries from banking and finance to restaurants and hotels are levering geofencing to attract business and boost their name recognition. If you haven’t explored the potential geofencing could hold for your marketing campaigns, it’s time to reconsider your strategy and evaluate what geofencing could do for your brand. A few companies have capitalized on geofencing to incredible effect, so taking a look at how these companies succeeded with their geofencing strategies can be a great starting point for developing your own successful strategy.
1. Whole Foods: An Aggressive Approach to Geofencing
The basic concept of geofencing revolves around using a potential customer’s location data to your advantage, but it can be difficult to convince some customers to part with their location data willingly. However, loyalty rewards apps for many companies come with the condition of the user being required to share location data to use the app. Signing up for special offers via SMS typically requires sharing location data, too.
Whole Foods created an aggressive geofencing strategy that involved two parts. First, the company erected geofences around every store location. When customers crossed into these geofences they automatically received alerts and promotional offers to entice them to visit the nearest Whole Foods location. The second part was much more aggressive. Whole Foods implemented a “geo-conquest” strategy that leveraged geofences placed around local competitors.
When potential customers visited those places, they received offers from Whole Foods designed to entice them away from the competitors’ stores and to visit Whole Foods instead. The national average for post-click conversion rate is about 1.4%. Whole Foods’ aggressive geofencing and geo-conquest campaign allowed them to reach nearly 4.7%.
2. Coca Cola: Maximizing Revenue from Vending Machines
The average person may see as many as a dozen drink vending machines during an average day. Soft drink giant Coca Cola has implemented a unique geofencing strategy designed to fine-tune their supply chain and entice more potential customers to use their vending machines. Today, more than one-third of all Coca Cola vending machines are connected to the internet, and the company has implemented facial recognition and payment tracking tools into their vending machines. These implementations have led to incredibly valuable data streams for Coca Cola.
The data gathered from the vending machines’ payment software and facial recognition systems allowed Coca Cola to easily determine which drinks sold the best, which locations were the busiest, and which vending machines needed attention or repositioning very easily.
Coca Cola has announced plans to streamline their supply chain even further and provide customers with better experiences by enabling their vending machines with free Wi-Fi, effectively transforming Coca Cola vending machines in developed countries into Wi-Fi hotspots and gathering places. While you may not have the same kind of reach as Coca Cola, it’s still worth considering taking steps to not only draw customers to your physical retail locations but also encourage them to spend time there beyond simply making purchases.
3. Sephora: Providing Customers With Instant Digital Assistants at Every Location
Sephora is one of the most popular cosmetics retailers in the United States, and the company recently implemented a new strategy that’s a unique take on the geofencing concept. Instead of simply targeting potential customers near store locations, the Sephora companion app launches when a customer enters a Sephora location. The app contains the user’s past purchase information, details about ongoing promotions, timed exclusive offers, and wish-list item availability for that location. The app also displays store-specific information in an easily accessible format.
The Sephora companion app has provided many customers with much better experiences, allowing them to not only streamline their shopping experiences within Sephora locations but also encouraging them to make additional purchases, take advantage of limited time offers, and use the wish list tool to entice them into returning again and again. As an added touch, the geofencing technology built into the Sephora companion app will automatically notify users who cross into a geofenced area about unspent gift card balances, reminding them that a Sephora store is nearby if they want to shop. If you’re thinking of ways to provide your customers with more enriching experiences at your stores, the Sephora store companion app is a fantastic source of inspiration.
4. Dunkin’ Donuts: Fun with Snapchat Filters
Geofencing is not only a great tool for convincing customers to make purchases but also to engage with a brand in other ways. Dunkin’ Donuts recently released a Snapchat filter on National Donut Day that users could only access in-store or through the “Snap to Unlock” feature, prompting many to visit their local Dunkin’ Donuts locations and connect with Dunkin’ Donuts through Snapchat to take part in the trend. The company’s personalized geo-filter transformed users’ heads into enormous pink donuts, complete with sprinkle animations.
The marketing campaign worked, and Dunkin’ Donuts gained ten times as many followers on National Donut Day than their daily average. This geofencing campaign may not have been directly tied to sales, but it still drove customer engagement with the Dunkin’ Donuts brand and encouraged many customers to use the Snapchat filter and share their silly donut-head photos across social media. This is a great example of using geofencing to generate engagement around your brand that could potentially lead to conversions without directly influencing users toward sales.
5. Burger King Continues the Fast Food Wars
One of the cleverest geofencing strategies in recent years was also a magnificent example of corporate trolling. Burger King launched the Whopper Detour campaign, which started with erecting 600-foot geofences around McDonald’s locations. Burger King then took to social media to encourage their followers to go to McDonald’s, but there was a surprising twist. As soon as a customer who had downloaded the Burger King app crossed into one of the geofences around a local McDonald’s, the app would send an offer for a one-cent Whopper from the closest Burger King. This prompted many customers to take “Whopper Detours” and abandon their plans to go to McDonald’s.
Fast food companies, most notably Wendy’s, have used social media in some very surprising and often entertaining ways. The Whopper Detour campaign is a prime example of how a company can not only leverage geofencing as an effective sales driving technique, but also as a means of generating engagement across social media. The stunt resulted in more than 1.5 million downloads of the Burger King app, skyrocketing it in the Apple App Store’s Food and Drink category from ninth place to first place. This could inspire you to leverage the power of playful competition to generate enthusiasm around your brand and drive users toward your own mobile app.
Drawing Inspiration for Your Brand
These are just a few examples of how major companies have leveraged geofencing technology in surprisingly effective ways. Whether you intend to draw attention away from your competitors or simply provide your customers with more engaging experiences while in your stores, geofencing can help you make it happen.
If you’re trying to drive traffic to your brick-and-mortar locations, geofences around each location that entice customers with limited time promotions are fantastic tools that leverage location data in your favour. One of the best parts of using geofencing technology is that it is very low cost. Neither Facebook nor Google AdWords requires you to pay extra for geofencing functionality. Simply choose your target locations, set up your campaign, and then track the results.
Start thinking of the potential geofencing marketing could hold for your brand and brainstorm strategies for connecting with your local market in more meaningful ways.