While the idea of marketing to people based on their location is nothing new, according to a research there is an expected increase in the use of geo-fencing to grow to $2.4 billion by 2023 as mobile usage is increasing.
With geo-fencing, you can do real-time targeting based on a user’s location. A target area can be within few miles of a restaurant and when a user enters or leaves this area, they receive a push notification, text message or some other form of marketing communication.
According to a research, people who open a push notification - 54% of them convert via segmented push compared to 15% from broadcast messages and there are approx. 52% of users who enable push messaging on their mobile apps.
You can select and mark off a geographical area from map and create a digital barrier around it. This “fenced-off” area will detect and communicate with mobile devices that breach the territory. A Geofence gives the ability to send messages via SMS, Email or App-based notifications to devices that enter, exit or remain parked in the marked area.
Research Source: Emarketer
Remember this famous Starbucks message?
(Pic courtesy: Adobe Stock)
Users got it because they entered the geofence built by Starbucks around one of their stores.
Location accuracy of user’s device is very important for geofencing. If you have a broad targeting like city level, accuracy is not the major concern. Error up to 1km is easily acceptable in this case. But if you are targeting people within 50 meters of your store, then you require high accuracy.
How Geofencing works?
Do you also have a perception that it’s just the GPS that could track user’s location? Other than GPS, there are different sources that help tracking user location. These sources include Wi-Fi, Device Network, IP & Beacons.
Combination of GPS, Wi-Fi and mobile tower triangulation is used to provide the most accurate latitude/longitude. Now let’s understand how triangulation works and how your Wi-Fi router has anything to do with your location tracking.
The app has to rely on the operating system to get the geolocation data in Android as well as iOS environments. App consumes data and operating system gets the location.
Android allows to choose the desired precision level of location and also mentions the sources it would leverage to identify the location.
The operating systems currently require the apps to take explicit permission from the user to share the location. Android has always been accused of tracking users’ location despite them having their location turned off. But what if the user doesn’t give permission to access his location? The developer still has the option to find the location by using third party services which rely on RIPE database. They basically track the IP address of user to map with the nearest mobile tower, which is fine for city level targeting.
Let’s take an example. Suppose you create a geofence around your store using ‘enter’ or ‘exit’ condition on this geofence as the trigger of any action.
2 possible behavior segments here –
- Enter: Trigger notification when user enters the geo-fence
- Exit: notification when user exists the geo-fence
Now with these two conditions, you can make many use cases for your business with customized messaging. You can further enhance your messaging by mapping geo-specific data of user with his profile data. Combination of entry, exit and geo location data can help you in many ways to create values for users. If we have data of users who have visited Goa more than twice in a year then we would have some certainty that these are potential customers for rented bikes.
Along with the user’s profile and behavioral data on app and other web properties you are also considering the geo location data to define engagement with your users.
Advantages of Geofencing –
- Get customers into physical retail locations.
- Increase in sales and traffic by sending contextual messages to users based on location data.
- Maximize user engagement and retention.
- Increase customer loyalty with better perceived brand value.
Use cases of Geofencing in marketing –
- Helping apps to find their users better, faster for hyper local servicing. For example, Uber uses geofencing to coordinate the process of assigning the closest, most accessible drivers to each pickup request by users.
- Driving up sales inside a retail outlet by directing customers to specific sections of the outlet.
- Regulation of public transport and other city wide transit systems. Apps like Google Maps, tells the best possible routes from current location and inform about the ordinary situations like heavier traffic jams, roadblocks etc.
- Optimized logistics and warehousing. A logistics hub can coordinate operations to work by being alerted of the entry of workers and vehicles on the shop floor area and supply chain networks can be triggered to process shipments without manual human intervention.
- Improving functionality of home security. IoT powered home security systems can inform users of a breach in a geofence and open/shut doors after recognizing known users within a geofence.
- Improved outdoor event management. Geofencing helps understanding crowd movement patterns, queue handling and push information to users who are in the proximity of a booth.
- Travel apps, hotel aggregators use geofencing to notify users about nearby hotels, lodging and other transport options at airports, railway stations and bus stations to maximize chance of purchases.
- Targeting competitor’s retail locations to drive traffic to your site. By geofencing your competitor’s retail outlets, you can run competitive promotions about your brand to these users. This will help maximizing your brand’s impression share.
Have you started using geofencing already or still wondering? Share your experiences in the comments below