Modern technologies provide opportunities for marketing specialists and business owners who want to reach their target audiences. One such tool for advertising purposes is geofencing marketing. Keep reading this article to find out more about this technology and the ways it can help your business grow.
Geofencing marketing is an effective marketing tool that helps reach a target audience according to where they are located. There are many ways to reach an audience, such as publishing ads, but how can you reach those who are most likely to use your services? You can target potential customers more effectively by publishing ads that customers can see in their mobile apps or mobile browser if they go to a certain location.
Several technologies are used in geofencing, including the following:
The tool has to be integrated with an application. It creates an invisible fence that sends alerts to users.
The Effectiveness of the Tool
Geofencing can be used in 92% of all smartphones available in the U.S. This tool is helpful for reaching potential customers more efficiently. You won’t have to spend money to advertise to individuals who may never order your products or services. It even allows you to promote your business when a potential customer visits one of your competitors!
According to several studies, geofencing alerts are highly effective. In particular, during a survey performed in 2008, 53% of respondents reported that they had received a geofence alert with a discount or promotion and used it. 67% of the participants said that such alerts are often or always useful.
How the Tool Works
Below, you will find a brief but clear description of how it works:
- A virtual geofence is set up around a certain location where a business owner wants to find potential customers;
- When people enter that location, they are considered to be potential customers;
- When they open different apps or mobile browsers on their mobile devices, the ad will be displayed for them;
- People will see the ads for up to one month after entering the geofencing zone.
While this may seem simple enough, look at the example below to better understand how the process works.
Imagine you’re the owner of a nice coffee shop, but there are some competitors nearby, and you want to attract their customers to your business.
By using the tool, you can indicate the desired area, and when someone with a mobile phone enters it, he or she will receive alerts about your coffee shop. You can place such a virtual fence nearly anywhere, even around your competitor’s cafe!
One of the greatest advantages of this tool is that it is possible to pick the times when your ads will be displayed. For example, if you know that many visitors enter the desired location at a certain time, you can adjust the configurations so that your advertisements appear at that exact moment and reach as many potential customers as possible.
Why Use Geofence Marketing?
Now, let’s discuss how this tool will benefit you.
Increase Customer Loyalty
Retaining customers is a difficult task, and to do it, you need to ensure that they have a positive experience with your business. Geofencing marketing will help you achieve that goal. You don’t have to advertise a special offer every time, but you do need to leave a positive impression of your business.
Geofencing will help you gather important info for your marketing campaign. In particular, you will find out how many people have actually seen your ad. You can then analyze the results obtained with the help of geofencing technology.
You will be able to access the following data:
- Click-Through Rate;
- Cost Per Mille rates.
Implement Different Approaches
You can change your campaign at any time. If customers do not respond well to your campaign, you should analyze its disadvantages and weak points and come up with a way to improve it. For example, you may be targeting the area at the wrong time of day.
The easiest way to find out what customers prefer is to use diverse approaches. For example, you may offer free meals at one point and a $50 meal voucher at another to find out which one seems more attractive to your clients.
Developing an Effective Strategy
The effectiveness of your geofencing marketing strategy depends on several factors, including the following:
- The right geo-fence size;
- The correct target audience;
- Attention-grabbing ads for customers;
- Analysis of the results and adjustments if necessary;
- Application of different techniques.
The fence you create needs to be the correct size and in the correct place or it will be ineffective. For instance, you should not create a geofence at your competitor’s location if it is far away from yours. Remember that customers are unlikely to make a 30-minute drive just to use a discount at your store.
The main idea behind the geofencing marketing tool is to advertise businesses easily reachable by potential customers. You should determine a radius of a 5-minute drive from your store, restaurant, etc., and that will be the area suitable for geofencing. If you own an online store, you can target the visitors of a specific tradeshow and still keep your area relatively small.
You need to figure out who your potential clients are. Therefore, before using geofencing markets, you should answer a few core questions, such as:
- Who will your audience be?
- How can you attract their attention?
- When can you reach the greatest number of potential customers?
- And more.
The more data you collect, the more effective your campaign will be.
It’s not enough to just send the message “Hello! We are here for you!” Any ads you publish should be interesting and tailored to your customers. For instance, “Visit us from 2 P.M. to 5 P.M. and get a free beer!” Essentially, you should offer something attractive for your customers if they do something you ask. Avoid sending spammy messages. For instance, instead of writing “buying,” you can use the word “trying.”
It’s crucial to come up with the right text for your ads, and professional geofencing marketing companies like ours can help you with this task.
Analyzing the Results
You need to ensure that your campaign will help you achieve your goals. Therefore, you should and review the results of your campaign regularly. If you notice that something is going wrong, then you should revise your approach.
You can use diverse marketing methods, such as:
- Content targeting. This tool is based on a keyword search. If you have keywords in your ads, your customer will see your ads after searching the relevant words;
- Context targeting. Your ads will be displayed on relevant web pages;
- Dayparting or ad scheduling. It allows you to target customers at certain times of day;
- Retargeting is used to show ads for the customer who has previously browsed your product range.
Our specialists can help you select the necessary marketing techniques and ensure their successful implementation.
The Best Locations to Reach Your Customers
There are many places where you can search for customers. Look at your location and decide where would be the best place to set a virtual fence to “catch” people. Here are some options:
- The location of your business;
- Educational institutions;
- Your competitor’s locations;
- Shopping malls and other public places.
Companies that Use this Tool
Geofencing marketing works well for all businesses regardless of size, industry, years of operation, etc. While it’s extremely helpful for brick-and-mortar companies, online merchants can also benefit from it.
Below, you will find a few examples of how this tool has been used by several famous companies.
This well-known German auto manufacturing company made use of this tool in a unique way. It uses geofencing to give its customers helpful info. For example, you’ll be notified that your keys aren’t in your car. The corporation improves the customer experience and increases revenue since this service is available for a fee.
Honeywell is an American multinational company that consists of four groups, including Building Technologies, Aerospace, PMT, and SPS. It uses geofencing to improve its products and increase the level of customer satisfaction.
For instance, there is a system that comes with geofencing technology to set a virtual perimeter in certain rooms in the building. It can tell if someone is there or not and use this information to turn equipment on/off. This saves a lot of electricity, so the equipment manufactured by Honeywell can operate for longer.
Taco Bell, an American chain of fast-food restaurants that serves Tex-Mex dishes, uses its mobile app for geofencing marketing. Its marketing department collects essential information about the chain’s target audience, promotions, and more.
Its goal was to make people under 30 years of age want to visit Taco Bell. This method resulted in a 6% increase in the company’s annual profit. This campaign earned the company $600 million.
Uber is a large American multinational ride-sharing company that would not be successful without location services. When users open the Uber app, geofencing allows them to find vehicles in a specified area and provides customers with this information. Moreover, you can benefit from geofencing even without the app. All you need to do is to enable GPS your mobile device and enter one of the indicated zones. You will soon receive a message with information about drivers in your area.
North Face is an American company that sells clothing, footwear, and equipment for outdoor activities and has managed to increase sales with geofencing marketing. The number of visitors to its stores increased by nearly 80% due to ads. In addition, 65% of customers who came after receiving alerts made a purchase.
This is a large American pharmacy. It uses geofencing technology to retain existing customers. If a customer is within a geofenced zone, he or she will be notified. It is very helpful for customers who may need to visit this store but don’t know it’s nearby.
The History Channel
This television network wanted to improve its brand awareness and was able to do so with the help of Foursquare. This mobile app is used to search for local restaurants, museums, stores, and other places. The History Channel provided its users with additional interesting historical information on the places they were looking for, such as important dates and events.
American Eagle is a firm that sells clothing and accessories. It uses geofencing marketing to increase its brand awareness and attract more visitors to its stores. The organization actively designs special offers and advertises them to customers when they are in the right area.
Is Geofencing Expensive?
Naturally, business owners wonder how to set up geofencing marketing cheaply because they want to be sure it’s cost-effective. The cost of a geofencing marketing campaign depends on several factors.
Approximately, the monthly cost for such an ad varies between $1,000 and $30,000. Usually, the price ranges from $5 to $15 Cost Per Mille. The price for management services related to your campaign may be up to $1,500 per month. You should also remember that ad platforms may charge a fee.
The price is also dependent on the size of the virtual perimeter; the larger it is, the more you will have to pay. The cost also depends on the goals of your campaign. For instance, it can be either a Cost Per Mille per perimeter or you can opt for Cost Per Conversion.
In general, the price for such a campaign varies significantly depending on your project specifics. You should remember that this tool allows you to increase your revenue and beat your competitors, so it’s worth the investment.
Why You Should Choose Us
How do you choose the right geofencing marketing company? If you want to work with professionals who know how to set up geofencing marketing at a reasonable price, then you should contact us.
We can help you every step of the way, from designing an effective campaign to setting up the geofence. You won’t have to spend all your time managing a system you’re unfamiliar with. We’re available to set up a geofence at any location within the U.S.
Our team knows how to deliver the results you need. Each of our clients receives the full attention of our highly qualified specialists.
If you believe that geofencing marketing is exactly what you need to increase your business’ revenue, your brand awareness, your level of customer satisfaction, etc., then call us today, and we will give you detailed information about our services and prices.