Geofencing refers to the practice of utilizing global positioning systems (GPS) or radio frequency identification (RFID) to determine a specific geographic boundary. Once this boundary is determined, overseers can establish triggers in order to send out notifications when a mobile device either enters or exits the barrier. Geofencing is becoming a commonly used strategy in marketing. In this article, we’ll investigate geofencing in greater detail, explaining how it works and the advantages that it provides.
The widespread use of technology has given rise to location-based technology, and marketers are taking notice of the benefits that this technology can offer. There are several geo-tracking technologies available, and of them all, geofencing is one that is most commonly used by marketers.
Geofencing is a location-based technology that involves utilizing global positioning systems (GPS) and radio frequency identification (RFID) to determine a geographical boundary. Once the boundary is determined, managers can create triggers that send out notifications to mobile devices whenever these devices enter into or exits out of that specific area. These notifications can include
- text messages,
- or push notifications.
In other words, geofencing allows businesses to partition a geographical location and communicate with the devices that are located within the confines of that location.
How Companies Apply Geofencing
Geofencing is an excellent way for companies to engage their consumers according to their location. This can do a great deal in regard to gaining a better understanding of the mindset of consumers. It can also be a highly effective way to send out notifications of sales and other important information that consumers might be interested in while they are shopping, for example.
For instance, a department store could establish a geo-fenced in location that surrounds its actual physical location. When a consumer enters into that location, he or she will receive an alert that has been triggered when the location of the consumer’s device has been triggered.
As another example, a car dealership might establish a geo-fence that is intended to target people who are exiting a competitor’s store after shopping for cars. By presenting them with a great offer, such as zero percent financing on a similar car make or model at that exact moment, there is a greater chance that the consumer will stop in to check out what the dealership has to offer.
The Benefits of Using Geofencing
Geofencing is proving to be a beneficial technology for businesses. Here’s a look at some of the most distinct benefits that geofencing offers businesses:
- Improved targeting. Since geofencing allows a business to personalize the messages it is sending out through marketing based on location, they can better target the people that are within the geographical confines of their establishment. This can increase the chances of attracting more people into establishment, which helps to ensure better targeting, as well as the personalization of the messages that marketing notifications are sending out.
- Connects a business to the Internet. The marketing messages of a business should be similar, or at least build of off one another. Geofencing allows you to link the physical location of a business with your presence on the Internet. In other words, it allows your storefront to become a virtual portal for your identity on the web. Geofencing can be used to those who enter into your area to check-in on Facebook and engage with you.
- Increased return on investment. Geofencing also allows businesses to send out offers to individuals who are within close proximity to their physical location. This makes it easier for you to assess the response and the effectiveness of your ad campaigns, which makes it easier to optimize your marketing efforts, leading to a better return on investment.
- Offers real-time analytics. Advertising is essentially a conversation that takes place between businesses and prospective customers. Geofencing helps to make the process of starting these conversations easier. When people enter into your fenced area, you have access to real-time data that you can react to right away. You can gather and analyze this data in order to make better decisions for your marketing efforts, which will help to enhance the conversations you have with potential customers.
The Disadvantages of Geofencing
Despite the several benefits that geofencing offers, it is not void of disadvantages. Here’s a look at some concerns that are associated with geofencing:
- Privacy concerns. For consumers, geofencing raises concerns regarding privacy. For example, it can integrate location-based services that automatically check people in when they arrive at a specific location. Unless people want everyone to know where they are located, this can be very concerning.
- Increased notifications. Another concern for consumers is the increased amount of notifications they will receive. For example, should someone enter into an area where several businesses are located and all of those businesses have set up a geo-fence, consumers’ can receive an overwhelming amount of notifications. Those notifications can take up data and can simply be annoying.
- High cost. Geofencing can be very expensive, so unless it is proving to increase consumer interest and drive sales, the cost may not be worth your while.
- A lot of upkeep. App-based geofencing is not only expensive, but it also requires upkeep. This can be extremely time-consuming and can add to the cost of this tactic.
Technologies that Allow Geofencing
In order for geofencing to work, it needs a mobile technology in order to pinpoint the location and put to work the algorithms that are based on the boundaries that it sets. These technologies include the following:
- WiFi. WiFi comes standard in all smartphones, which offers good reach. If WiFi is on an open network and consumers do not have to opt-in to receive messages, this can prove to be beneficial. The downside, however, is that customers have to keep their WiFi on, which can lead drain their batteries.
- GPS. Global positioning systems (GPS) is a very cost-effective solution. It’s also precise when it is used outside, and it can easily work with other location-based options, such as WiFi. Like WiFi, however, it also causes severe battery drainage.
- RFID. This provides the highest level of precision for tracking. Moreover, consumers don’t have to put in any extra effort. Plus, it doesn’t drain batteries. However, it is hard to implement and it can be expensive to get started with.
- Bluetooth beacons. These battery-powered aid in the identification of the location of all devices that are located in a single radius by utilizing Bluetooth and location. They offer high accuracy and don’t drain batteries; however, you do need to make sure that you install these devices into all locations that you want to track, which can make it hard to implement on a large scale.