What is Geofencing- 4 Reasons It Works for Small Businesses - Social Media Explorer
What is Geofencing- 4 Reasons It Works for Small Businesses
What is Geofencing- 4 Reasons It Works for Small Businesses

Both Google and Facebook display location-specific ads in a bid to generate more positive responses. Geofencing marketing takes geographically targeted advertisement to a whole new level.

Geofencing is a technology that allows users to set virtual perimeters around a business location or a particular point of interest. The technology tracks customers via GPS and when they enter a predefined area and then an action is triggered. This action is most commonly a push notification.

For example, if a potential customer is walking by a retail shop, an automatic notification with the latest offers available at that shop may encourage that person to walk into the store.

Apart from sending marketing notifications to users entering the business vicinity, geofencing can also be used to track customer activity. A business can use the technology to find out the average time customers spend at their store and then correlate that data with their sales figures.

How Geofencing Works

One of the major misconceptions about Geofencing is that it targets all customers who are within the geographical boundary. That’s certainly not the case. Customers need to have the business’s app installed and have their GPS and notification turned on. Businesses that do not have their own apps can partner up with a geofencing marketer, in which case the targeted users need to have the marketer’s app installed on their phone.

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Businesses need to define a geographical area around their shop. Once the area is defined, the system tracks users entering or leaving that area via GPS, cellular data, and bluetooth signals. Based on predefined parameters set on these data points, an action is triggered. Most commonly, these actions take the form of push notifications to lure customers into the store.

4 Reasons Why Geofencing Strategies Yield Positive Results

Customers Find Value in Geofencing Notifications: The fact that customers opt in to get geofencing notifications make them more effective. Users voluntarily download the geofencing app, turn their location on, and expect valuable location-specific notifications. When a geofencing-enabled notification hits their phones, it’s much more likely they are going to pay attention and take positive action.  

Geofencing is Incredibly Cost Effective: Most small businesses work with limited marketing budgets. Geofencing companies offer various packages and they are usually cheaper than traditional marketing campaigns. The fact that geofencing targets hyper-local customers, allow businesses to witness a better reward to cost ratio. Furthermore, the technology does not require any hardware installation and thus doesn’t demand a big initial investment to get started.

Can be Setup to Direct Customers from Competitor’s Location: Geofences (the virtual boundaries on the map) can be set around a competitor’s location. This helps businesses target their competitors’ customer base with their own offers and discounts.

Targets Impulse Buyers: The key to running any small business location is to draw in impulse buyers. These customers usually walk around with money to spend and are open to new products. Geofencing targets impulsive buyers walking by a store or a business location by enticing them with hard-to-turn-down offers.

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About the Author

Chip Rodgers
Chip Rodgers is an accomplished executive leading digital marketing, demand generation, large customer events, community marketing, social media, and growing pipeline. Chip is a passionate learner, tracking the industry and market changes and has been successful motivating teams trying new approaches to reach audiences in authentic ways. Chip has an MBA degree from the University of Chicago and an undergraduate degree in Engineering from Northwestern. A Chicago native, Chip resides in Philadelphia and enjoys time with his family, sailing, tennis, and music trends. You can find Chip active on LinkedIn, Twitter, and Facebook.

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