Conversion Rate Optimization
Social Media Advertising

Geofencing: Your Tool for Hyperlocal Marketing

9 minute read

Today, we live in a world where you can set digital perimeters around physical locations and use those perimeters to take your digital marketing to the next level. This practice is called geofencing, and it is made possible by technologies such as Global Positioning System (GPS), Radio Frequency Identification (RFID), Bluetooth, Wireless Fidelity (Wi-Fi), or cellular-data.

Geofencing has a variety of applications across multiple industries, business sectors, and real-life use cases. For example, it can be used to help HR monitor employees’ locations, or it can be assigned to inform parents if their children leave a designated area. Such applications for geofencing are pretty straightforward but, in digital marketing, geofencing can drive up sales and engagement.

An Introduction to Geofencing

As a location-based type of marketing, geofencing enables businesses to target customers within their virtual perimeter, improve their hyperlocal marketing, and take their mobile advertising to the next level. Not surprisingly, the enthusiasm around the potential of this tool for digital marketing has resulted in growth for the geofencing market, which is projected to grow to $1.7 billion by 2024.

Considering that, by 2022, there will be over 270 million smartphone users in the US alone, geofencing is poised to transform the way people go about their mobile advertising endeavors. Yet, relatively few companies understand what geofencing can do for them.

    • Social media advertising: Since all major social media platforms have geofencing capabilities, you can create ads that will be sent out to your desired customer segments as soon as they enter a virtual perimeter that you’ve previously established. You can also leverage the geofencing and data reporting capabilities of social media platforms to discover trending topics within certain areas.
    • Local store marketing: When customers enter the virtual perimeter of your physical store, you can target them with welcome messages, special offers, or ads about new or bestselling products. You can also invite them inside the physical location by offering them a complimentary item. Depending on your business, it could be a free dessert for a meal they buy or a discount for purchases that surpass a certain amount. When customers leave your virtual perimeter, you can target them again with thank you messages or discounts.
    • Audience engagement: In the events industry, geofencing can significantly boost audience engagement. For example, during an event, you can keep everyone engaged by sending out information regarding the agenda and, depending on the nature of the event, remind attendees who the speakers or performers are. Likewise, you can remind attendees when to check in to avoid lines and help them navigate around the venue when they need directions. Furthermore, you can keep them coming back by notifying them of future events when they enter your perimeter. Last but not least, you can use geofencing to collect event intelligence by creating heatmaps to see which venue areas were the most popular among attendees and why.

These are just some quick examples of how geofencing can be used. Of course, geofencing capabilities can also be extended to web ads, brand or third-party apps, and more.

Pro Tip

Since all major social media platforms have geofencing capabilities, you can create ads that will be sent out to your desired customer segments as soon as they enter a virtual perimeter that you’ve previously established.

The Benefits of Geofencing

In recent years, stats regarding mobile ads seem to reinforce geofencing marketing. For example, 51% of customers discover new companies or products on their mobile phones, indicating that geofencing marketing is essential to enabling purchasing decisions. So, what are the key benefits of using geofencing capabilities as part of your larger digital marketing strategy?

    • Increased local sales: Geofencing can greatly improve your local performance, especially if you strive to rank higher in local searches. By sending push notifications to targeted customers in your area, you can attract more local clients and experience significant sales increases. Also, you can create a system of daily promotions and limited-time discounts to keep customers interested over longer periods of time.
    • Deeper data insights: Geofencing marketing can help you collect precious offline data. You can use it alongside your online customer data to have a clearer picture of the customer lifecycle, but you can also leverage it to understand what made someone shop from your store. You can determine whether it was a discount or a new offering, and you can also see how long or how often they visit your store location.
    • Personalized customer experiences: Personalization is the key to customer engagement and retention. And, luckily, geofencing can help you understand the actual space of your target customers so that you can make your messaging more accurate and relatable by taking into account their demographics and geographical area. You can further personalize customer experiences by investigating purchase history and accommodating your customers’ preferences with desirable offerings.

Final Thoughts

Implementing geofencing in your digital marketing strategy can only have positive results moving forward. As long as you respect your customers’ privacy and are transparent about your location-based marketing practices, your customers will trust you, and they will be happy, rather than frustrated when they receive notifications from you.

By sending them the right message at the right time (and place), you can establish a stronger relationship with customers and help your bottom line. So, explore this hyperlocal method to give incentives, share rewards, and ask for feedback. Your customers will appreciate it!