What is Geofencing Marketing & How Does It Work?


What if there is an actual service that can allow you to target potential customers through their geographic area at a more granular level than local SEO? Geofencing marketing can make this happen!

Local SEO can boost your traffic like magic. Did you know that 80% of customers look up local information in search engines?

That speaks of huge potential. Hence, make sure that your website ranks high in the search results.

But what if you are to target customers depending on where they are on the globe? They do not have to go to Google and look up a keyword for your website to show up.

All you need is to know their location data and show them ads on their mobile apps. Geofencing marketing is what you need to do this.

It provides a great opportunity to catch buyers when they are already within the vicinity of your business, or after they left the boundaries.

It can boost awareness, engagement, and conversion of your customers. Learn more about this as you read this article and see how it can help your business.

What is geofencing marketing?

What is geofencing marketing

It is a strategy of promoting your business by targeting people who pass within the boundaries or your target geographical location, either when they go in or when they leave the area.

This area is called a geofence. It is an area you can freely define by setting the virtual boundaries on a map. Depending on the service that you choose, there are set limitations as to how many geofences you can set.

But in terms of size, there is almost no limit. But it is highly recommended to keep it at a manageable level where your signals will not overlap and bounce around like in cases of small areas below 5 meters, for example.

Say you have a retail store. Imagine that you can upsell to your shopper and recommend your best-sellers while he is shopping.

Even if you have a hundred shoppers in the same store, you will not need a hundred salespeople to do this. Instead, employ geofencing marketing.

What if you can just stand by the door of your competitor’s store and tell each one coming in that you have a better offer over your store? That would be amazing, right?

It is unethical, awkward, and seemingly impossible. But it is possible with geofencing marketing.

All these marketing tactics are uncommon in the physical world, but digitally, they can!

How does geofencing marketing work?

In this digital marketing strategy, you can use text messaging, push notifications, or pop-ups through in-app ads. The customers will receive your ads when they enter the area and even after they leave for a limited time, up to 30 days in some cases.

This way of hyper-targeting your audience is successful because of the relevance it has to your target audience.

If you get a Walmart app on your mobile device, you would know how geofencing marketing means. When you go to Walmart, the mobile app will inform where you are. In a short while, you will be receiving push notifications about their deals.

Or, when driving near a Starbucks branch, your Starbucks app will notify you to come over and have coffee. These are all examples of geofencing marketing.

But there are certain limitations to this. For this to work, the user must turn on his location services, if not, that would be difficult if not impossible.

A user must have at least one of these turned on:

  • GPS
  • Wi-fi
  • cellular data
  • RFID
  • Bluetooth

Not all of these are required, but the accuracy of detection highly depends on this. Sometimes, you need a combination of those especially when you want to target a certain space indoors.

For example, you will not expect everyone to turn on their GPS. It drains the battery and it is inaccurate indoors. That’s why Wi-fi or cellular data could be better options.

location ads

If you have an app, then, the user must have it, too. They have opted in it, so, it means that they are receptive to your ads. And that app must run in the background, or else, they will not receive your push notifications.

Now that you know what it is and how it works, it is time to discuss how you can use it to your digital marketing advantage.

What are the advantages of geofencing marketing?

As in any strategy, you want to convert leads to sales. And geofencing marketing is a great way to directly assess the behavior of your audience.

Here are some ways on how you can use this strategy to further strengthen your promotional efforts.

Gives measurable data

When you advertise using this strategy, you get to know directly if that visitor went into your retail store, stayed there, and whether he bought or not.

Every visit will give you new insights into your audience’s behavior and demographics. And with the data that you can get, you can tweak the rest of your promotional strategies accordingly.

These are things that can be difficult to correlate when using other strategies like social media demographic insights or SEO.

Boosts brand loyalty

If your advertisements arrive while the customer is still within your retail store’s premises, then, it is an opportunity for that customer to engage.

The more relevant your ad is, the higher the chance that your customer may buy. You can also get repeat customers from this.

Offer them something to go back and do a repeat purchase. Through time, you can build a loyal customer base.

And that is a big deal because it is costly to acquire a new customer. Business owners will greatly benefit from these repeat purchases and high average order value.

Highly targeted and personalized

Put a geofence around your competitor’s building. You have the same target customers after all. You can target them to do business with you instead.

Make them aware that you provide another option to address their needs. Offer them a discount, maybe?

And since you are targeting actual people who have come in your business area, then, these are people who will be more likely to buy repeatedly. Think middle- to bottom-of-the-funnel customers.

All they need is a little push to make them spend money on your products or services. And your personalized ads may just be the only deciding factor they can consider to finally convert.

Want to pursue this strategy?

Local SEO can boost your business by providing relevant information, products, and services to those searching for businesses within the same town or city.

But with geofencing marketing, you can further target people in smaller areas like within a building and place multiple geofences.

You can even use it to engage with your potential customers during an event in real-time. Send updates and announcements and increase participation through gamification.

The possibilities are endless with location-based services like those employed using this strategy. So, if you are interested to pursue this for your business, contact Milia Marketing now to be part of your marketing team.

Because at Milia Marketing, you will engage with people who know Cleveland in and out!

Anthony Milia

Anthony Milia

Anthony Milia is an author of Marketing Magnifier, marketing consultant, and owner of Milia Marketing, an award-winning Marketing firm located in Cleveland, OH. Anthony helps Small and Medium-sized businesses get the best ROI for their marketing dollars by shedding light on their sales and marketing challenges.