Geofencing Marketing – a Quick Guide for 2021

Do you ever think about the notifications you get while you are near your favorite restaurant or coffee shop? Or maybe you got a gift voucher from your favorite pizza shop right after getting home delivery?

If this is happening to you, then you should know that it is due to Geofencing Marketing. If you are curious to know what is it and how it works, keep reading.

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What is Geofencing?

It is a location-based service in which different apps on your smartphone use your location data, such as GPS, Wi-Fi, RFID, or GPRS to send SMS, Email, or in/Apps notifications in a specific geographic area.

This specific geographic area can be marked on a map to fence off like a digital barrier. For instance, this helps in getting more and more local customers looking for your product or service.

What is Geofencing Marketing?

Like other marketing tools, this tool is also used to enhance business in a local market and get more customers to access your product. Based on customers’ location, businesses send personalized ads to them while they enter or leave that fenced area.

Both brands and small businesses can use this tool for proximity marketing. The geographical boundary can be set between 200 to 1000 meters radius. Brands create a fenced area around their location and run ads for customers present in that particular area.

When a customer enters this fenced area, they get this personalized ad. This ad can be shown to the user via SMS, in-app Notification, or by coupon.

Sending an email or in-app notification in real-time is just one aspect of this proximity marketing. Before we discuss its examples, let’s see some of its technical aspects to understand the nuance of how it works.​

Segmentation

Straits Research categorizes proximity tools by their type, component, technology deployment, and vertical. Here is its segmentation.

By Type

  • Fixed
  • Mobile

By Component

  • Solution
  • Service

By Technology

  • Global Positioning System (GPS)
  • Radio Frequency Identification (RFID)
  • Wi-Fi
  • General Packet Radio Service (GPRS)/Cellular Network

By Deployment

  • On-Premise
  • Cloud

By Vertical

  • Transportation and Logistics
  • Retail
  • Healthcare
  • Industrial Manufacturing
  • Media and Entertainment
  • Law
  • Government and Defense
  • Banking, Financial Services, and Insurance (BFSI)
  • Others​

How to Setup?

Different Software is available to set up your proximity marketing campaign. For example, Radar, PlotProjects, and WebEngage are top-rated software to run location-based ad campaigns. Creating a marketing campaign in a particular area can be done in five simple steps.

  1. Creating the Geofence

Mark boundary on map 200 to 1000 meter radius.

  1. Building a Landscape Page

Create a campaign on how and when ads can appear. For example, if a business has higher traffic at night, the ad time can be set up for morning or evening for instance. This time frame will help to get better results.

  1. Data Analysis

Data can be analyzed using Google Analytics Tool.

  1. Fine Tuning

Based on the analytics data, an ad campaign can be finely tuned to get better results.

  1. SDK Integration with App

Once you created the fenced area, Integrate SDK with the app to get started.

Geofencing Marketing

Best Practices to Follow

While setting Geotargeted Marketing, there are several things to keep in mind to get better results.

  1. GPS Accuracy

Location is the crux of this marketing campaign. Always ensure high location accuracy to reach high customer engagement.

  1. Privacy

Most importantly, always inform customers about getting their location data into the app and use it to send them new deals and promotions.

  1. Keep the Fence Small

The biggest mistake companies make is to keep their fence too large. Customers mostly do not travel too much to get deals and buy a service. For example, if you target ads in 30 miles radius, they will not help to get more customers. Keeping it small will help to reach more customers to your product or service.

  1. Locations to Target for your Campaign
  • Your Business’s Location
  • Your Competitors Location
  • Events and Galas
  • Colleges and Universities
  • Hospitals
  • Nearby Streets
  1. Enhanced Customer Participation

Customers always want to be aware that who is getting their private data. Getting real-time location data is a challenge for marketers.  Customers easily trust the app that they regularly use and share their location data with that app. This is beneficial for both customers and businesses.

  1. Make Your Ad Actionable

Adding a call-to-action button to your ad will help customers to easily reach your business. Do not make the ads spammy and self-serving. Invite a friend to like your page and get the offer as a reward. This can help in making the ad more attractive which will  encourage customers to act.

  1. Regular Data Analysis

After running a successful ad campaign, review your data regularly. This will help you analyze how your campaign is working.​

Proximity Marketing Examples

Starbucks is a famous coffee shop in the United States of America. They use this marketing tool to send promotions to their customers via push notifications when customers visit their business or in a nearby area.

For instance, Starbucks offers coffee for free or at a reduced price during “Happy Hour” which starts every week on Thursday from 1400 hours to 1700 hours.

Uber is an American Technology Services Company that provides services such as ride-hailing, food delivery, package delivery, and courier.  They target customers near airports, clubs, hotels, and colleges to offer promotions.

Similarly, they send push notifications to get more fairs from long rides.

Like many companies, BMW also uses Proximity Marketing as a unique selling point. With its BMW Trackstar Advance Services, it provides high security to its users.

If you forget the key and start to move, it will notify you.  It helps consumers to get the advantage of high security as well as BMW as a continuous source of revenue.​

Frequently Asked Questions

  1. Does this marketing depend upon location accuracy?

Yes, it depends upon location accuracy.

  1. Does an App require running an ad campaign?

Yes, an Android or IOS application is a must to run this campaign.

  1. What industries do the best with Geotargeted Marketing?

It is best for small brands, large brands, Healthcare, Shopping Malls, Travel and Tours, Foods, Digital Electronics, Government, and law, etc.

Final Words

In conclusion, it is a profitable tool to get connected with consumers and to enhance revenue. It will give your business a competitive edge when you develop a mobile app with this tool.

This will help in bringing loyalty, customer engagement, and click conversions to your business.

If you are trying to get more traffic to your business, use this fantastic tool to provide limited-time promotions to your customer in a specific geographic area. Google or Facebook do not charge any extra fee to run a campaign in a specific area.

Just create an ad around your business and keep an eye on the analytics to boost your sales and revenue. It is one of the best tools for your business in 2021 and future years.

To discuss this emerging marketing technology further, please comment below.

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