Location-based marketing creates many opportunities to reach consumers based on the specific geographic area they are physically present in. Geofencing is a type of location-based marketing that establishes a virtual fence around a pre-defined geographical area to attract mobile users. Today, geofencing is used in social media, human resources, telematics, cybersecurity, and marketing.

How does geofencing work?

Geofencing uses a combination of technologies to track customers’ locations:

-GPS

-Bluetooth

– Beacons

Once the virtual boundary is dawn around a physical location and a user enters that set location, a triggered response is distributed. Dependent upon the device and technology, marketers can prompt mobile push notifications, send targeted ads on social media, initiate text messages (SMS) and deliver location-based marketing data. Ever notice the food recommendations you receive once you enter a certain location? That is geofencing.

 

The Intertwined benefits of geofencing for marketing

 

Increase local sales

If one of your marketing goals is to drive foot traffic to your store and increase local sales, geofencing is your answer. In fact, it was reported by salesforce that fifty-three percent of shoppers visited a specific retailer after receiving a location-based alert. Therefore, it is an extremely effective way to target users while they are at the set target location. In addition, this is a valuable tool for driving customer loyalty by targeting individuals who have previously visited your business with promotional and loyalty offers.

 

Tracking Conversions and measuring ROI

Local sales can be difficult to measure. However, with geofencing, there are a number of metrics you can measure, including sales, how long they were in the store, and how often they visit. Reports also indicate the performance of the campaign for each geofence, so you can see which one garnered the highest CTR or the lowest CPA, for example. All this insight can be valuable information that adds depth to your analytics.

 

Customer Personalization 

Another benefit of geofencing is the data you obtain in order to personalize customer offers. It gives you demographics about the local population, including what kind of offers interest them and got them in your store. If you look at the purchase history provided and realize customers’ wants and needs, you can alter your promotions accordingly.

 

Increase brand awareness with concentrated spends

Better engagement leads to more effective marketing spend. With geofencing, you can reach the audiences most likely to take action, which means less budget spend on less relevant consumers.