Have You Geofenced Your Customers Yet?
Marketers use geofencing to recognise customer locations, understand behavioural intent, and invest in real-time location-based marketing When Shehnaz walked into a busy street of Saudi Arabia for some grocery shopping, her heart sank. How was she to get back in time for a meeting? No sooner did she decide to give up and try again […]
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Marketers use geofencing to recognise customer locations, understand behavioural intent, and invest in real-time location-based marketing
When Shehnaz walked into a busy street of Saudi Arabia for some grocery shopping, her heart sank. How was she to get back in time for a meeting? No sooner did she decide to give up and try again tomorrow, her phone buzzed. A pop-up notification with a grocery sale on another nearby road lifted her spirits and off she went.
Geofencing is becoming a popular martech tool in recent times. For instance, Global bread company Panera actively invested in geofencing last year. It used the technology to alert staff when customers arrive to pick up orders, send customisable push notifications depending on whether people are in bakeries, cafes or at home and enable contactless dine-in experiences.
A geofencing solution provider Radar enables leading enterprises, such as Panera, American Eagle Outfitters and T-Mobile, and startups, such as Afterpay and Sleeper, to integrate location into their mobile apps.
Additionally, with hyper-targeted advertising through geofencing, engagement rates are expected to increase. A geofencing campaign conducted by Whole Foods provided the brand with a post-click conversion rate of 4.69 per cent.
Using GPS, RFID tags, WiFi network or cellular data, geofencing is a location-based service that triggers a pre-programmed action when a mobile phone or an RFID tag enters a virtual boundary, called a geofence.
Years ago, Dunkin Donuts utilised geofencing technology for a sneaky, but effective, business strategy. It used the technology to lure customers away from its competitors by creating geofences around other coffee shops, and then sent targeted ads to prospective customers. Over 35 per cent clicked on the offer, 18 saved the coupon, and 3.6 per cent redeemed it.
According to a recent report by Global Market Insights, the location analytics market is expected to cross $31 billion globally by 2027. And a Data Bridge Market Research study states that the geofencing market value will hit $12667 million by 2029. Meta, Snapchat, Twitter, and Google also leverage geofencing capabilities. Even Salesforce offers geo-targeting, geofencing, and beaconing to its customers.
Recently, Radar raised $55 million funding. With over 10,000 developers signing up to build location-based experiences across fleet tracking, delivery, and the healthcare industry, Radar could process over 100 billion API requests from over 100 million devices last year. The Geofencing API intelligently utilises the sensors of the device to accurately identify the device’s location in a battery-efficient method.
A Marketer’s Tool
Due to the pandemic, marketers found a need to bridge the digital and physical gap in customer experience (CX). The need boiled down to urgency due to the changing consumer behaviours and higher demand. The adoption of geofencing strategies picked up at a much faster pace rate.
A virtual geofence is built around an event location based on customer visits during a scheduled timeframe. When people enter the geofenced area during particular time slots, they become a part of the targeted audience. As users visit the various apps downloaded on their phones, they are subjected to ads from geo-fenced advertisers.
There are several other mediums in which marketers utilise the technology, from brand applications and text engagement to social media apps. Marketers use geofencing mainly to recognise customer locations, understand behavioural intent and invest in real-time location-based marketing.
For instance, Propellant Media is a digital agency that provides geofencing to small and midsize companies looking to bring hyper-local targeting solutions to brands with multiple locations.
Leveraged in various forms, geofencing marketing enables advertisers to display ads and target people in precise areas such as competitor locations, convention centres, retail locations, malls, crosswalks, and spaces as small as five square feet.
With contextualised mobile marketing campaigns, marketers can change existing ads into powerful marketing tools coaxing customers to visit stores and increase revenue.
The Euroleague Basketball is a global leader in the sports business. It organises basketball tournaments, Turkish Airlines EuroLeague and the 7DAYS EuroCup. The organisation wanted to increase their fan engagement and also test the sale of its sponsored marketing campaigns with geofencing. Using a geofencing solution provider Moca, the brand sent relevant notifications about its events to the user locations. The sponsors were also able to send contextualised marketing campaigns to fans. The solution successfully increased the brand’s visibility.
Experts believe mobile ads with geofencing double the click-through rate as over 50 per cent of shoppers visit the retailer after receiving the notification. For instance, H&M witnessed a click-through rate of 2.3 per cent when it geofenced stores locations.
Most brands understand that location aware-notifications can be more effective than push notifications. Mobile geofencing uses location intelligence and behavioural data to improve audience segmentation and the delivery of relevant advertisements and notifications.
As personalisation has become extremely important for CX today, geofencing allows marketers to aid its competitive advantage. Marketers can leverage geofencing to engage mobile users through personalised content.
Marketers can also access insightful data metrics about performance, engagement, traffic patterns, and message effectiveness. To improve CX, they combine the acquired information with online activity and web browsing behaviour. Simpli.fi is one of the early players of geofencing. It uses unstructured data to identify consumers and particular nuances on applications or websites.
Although location-based targeting is not a new concept, some marketers are undecided on using the real-time marketing technique of geofencing. Experts implore the brands to consider a better format of geofencing and bring more significant benefits for hyperlocal eCommerce businesses.
Updating Your Existing Strategy
Although geofencing in its original format is still helpful, it might not be most efficient, especially when marketers are trying to reach customers who are still reluctant to visit physical stores and heavily depend on eCommerce.
While a problem, it’s not something a tweak to the original geofencing model can’t fix. Calling it addressable geofencing (AGF), it is a new form of digital advertising that gives business leaders household-level precision to target customers.
With AGF, advertisers can target individual devices, which are within households, with advertisements. This method offers precision as custom geofences are placed and compatible with OTT and perform cross-device execution. Advertisers will be able to upload mailing lists to create targeted audiences.
Additionally, they can reach specific customers digitally using CRM data. Most advertisers have access to CRM data, but even if one doesn’t, AGF allows businesses to build ideal target lists using pre-existing data like demographics.
Will brands take the leap? A Transparency Market Research report stated that the global market for geofencing will expand at a 30.0 CAGR rate and generate revenues worth over two billion dollars by the end of 2022. We’ll know soon enough.
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