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Why Do Businesses Need to Use Geofencing Marketing? (Location Based Marketing)

   By: Kris Gerner

Why do businesses need to use Geofencing Marketing?

Geofencing Marketing refers to a real-time location-based marketing tactic that uses geolocation data to target users within an established geographic area and delivers content based on where they are or in what locations they have previously visited.

By now, you’ve probably heard about geofencing and all of the marvelous ways it can make you money. But what is this wondrous mystery marketing tool? How do you use it? Does it really work?

If these are the questions you’ve been asking yourself, you’ve come to the right place. Come with us on this magical adventure, where we’ll learn what geofencing entails, why marketers are using it, and how you can make it work for your business.


What is Geofencing?

By 2013 or so, geofencing was becoming less of an underground phenomenon and more of a legitimate marketing tool. Companies began to realize that it could be used to target specific people while they were in a specific location . So how does it work?

Geofencing uses GPS (Global Positioning System), RFID (radio-frequency identification), Bluetooth, and WIFI to create a virtual boundary around a location. When individuals enter the targeted area, a beacon sends a signal to the user’s phone. Typically the end result is an app or webpage displaying content to the user.

Marketers use this technology to create an invisible fence around businesses, neighborhoods, or even a group of city blocks. They can do things like send ads, add people to mailing lists, make special offers, or send coupons. Still confused? Perhaps some examples will help.

Practical Ways to Use Geofencing

Let's say you’re a local restaurant that wants to promote a special offer as a way to get more people to visit on weekdays. You could set up geofencing to send that offer to users in middle & high-income neighborhoods within a 2-mile radius of your establishment. Once the offer’s been sent, you can retarget recipients for the next 30 days no matter where they're located. This constant contact helps reinforce the idea that there is a great dinner deal just a few minutes away from where they live.

Another example of marketing with geofencing is targeting a competing brand's location. For example, if you’re an auto dealer, you’re always looking to make a sale and you’re always up against fierce competition. But wait! With geofencing, you can one-up rival car dealers. All you have to do is create a geofence around their dealerships and serve your ads to their customers. Offer no money down, zero percent financing, or cash back rebates; whatever you think might pull a potential customer away from your competition and toward you.

Handy Geofencing Tips

Since it can be a little tricky to get the hang of initially, we have a few tips from our own experience creating geofencing campaigns in Wilmington, NC and beyond: 

  • Understand your target customer. The best way to reach them is by knowing everything about them - age, gender, their family status, where they work, etc.

  • Think like a customer. What you’d want to see and what they want to see aren’t the same thing.

  • Anticipate where they’ll be most receptive. It may not be where you are, but rather where your competition is located.

  • Remember that bigger isn’t always better. An area that’s too big means people may have to travel further than they want to in order to make use of your offer. The general rule of thumb is your target should have to travel no more than 4-5 minutes, whether that’s walking or driving.

  • Get to the point. You may only have a split second in which to grab the user’s attention, so don’t sugar coat your message.

  • Analyze, optimize, update. Keeps tabs on your ROI so that you can change campaigns that aren’t working and boost those that are.

  • Don’t neglect specific dates. Sometimes it’s not just about location. You can send event or holiday-specific offers if you target the right day and time.

Benefits of Geofencing

Now that you understand it better, you can see that geofencing is a really interesting and unique way to get new customers. In case you’re still not sure about using it, check out these additional benefits:

  1. It can incentivize customers to visit your business or look at your products.

  2. It can be used to reward customers when they do spend money with your company.

  3. It can improve sales in locations that are suffering.

  4. It can give you more insight into customer behavior and improve your analytics.

  5. It can be personalized very easily.

  6. It can help you get more customer feedback and reviews.

  7. It can bolster customer loyalty and increase brand awareness.

  8. It can help you reach totally new customers who may have never known about you otherwise.

Geofencing has come a long way in the last decade or so. As phones have improved, so has the ability to use geofencing as a viable marketing tactic. And since cell phone technology is only getting better and better, geofencing is as well.

Want to try it out? BlueTone Media can help you with setting up a geofencing campaign, targeting specific locations, creating custom audiences, and measuring your results. Contact us or maybe even give us a call at 910-795-2280 to get started!

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