How many times a day is a potential customer within a few minutes of your front door looking for exactly what you sell, but, after doing a quick search on his or her mobile phone, leaving to find it somewhere else? According to Google, local searches are 40 percent of all smartphone queries, and analyst firm BIA/Kelsey predicts smartphone local searches will outnumber those from PCs by 2015.
So when customers are searching for something on their phone, how do you get them to come buy from you? One answer is geofencing. This is a SoLoMoCo (Social, Local, Mobile and Commerce) technology that uses GPS to set a virtual perimeter for a given geographic area. A small business can generate a geofence around its store or a particular location. When the user enters the "fenced-in" area, a text or email with a special offer is pushed to the customer's phone (with his or her permission).
According to Manish Patel, CEO of location-based digital marketing company Where2GetIt, this takes location-based target marketing to the next level. He says geofencing "allows marketers the opportunity to leverage time and location to create a focused message, customer loyalty and data on consumer behavior at the point of purchase.”
How To Implement Geofencing
There are different ways you can use geofencing. For example, Alliance Data, partnering with Locaid, implemented an opt-in geofencing program created around a mall in Ohio and triggered a text message when certain customers entered that location. Those customers ended up spending an average of 24 percent more.
DDR Corporation, a retail real estate company that owns U.S. shopping centers, is using geofencing to text deals from its retail tenants.This gives an advantage to small-business owners, who don't have the marketing budget to compete against the bigger retailers. For example, a restaurant can send a text with today’s specials to an opt-in customers when they enter a defined geographic area. Geofences can also allow a small business to target a specific audience at an event, such as a concert, theme park or Super Bowl.
There are dangers in geofencing as well. Tracking location data (constantly pinging the cell phone’s GPS) can affect the device’s battery life, which can anger potential customers.
This technology can also work against small-business owners. According to Patel, it’s called “geoconquesting,” where a competitor sends messages when customers enter other locations to get them to buy instead from their business. For example, when customers enter a specific shopping location, Amazon or Best Buy can send a text to remind users to compare prices or that it offers same-day delivery. According to local mobile ad platform xAd, 32 percent of all geofencing targets competitors in this way.
Are you using a geofencing strategy for your business? Is this something you're considering? Share in the comments below.
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