How to Grow Your Business with Geofencing

Geofencing is one of those things that can sound intimidating if you don’t understand it. That happens with any new technology. It’s unknown and sounds vaguely expensive, and you might think that you need a lot of experience to figure out how to incorporate it into your marketing.

I get it. But geofencing is a strategy that I think small business owners should be using — and you can’t use it if you don’t understand how it works and have resources to help you implement it.

With that in mind, here’s the breakdown of what geofencing is, how people use it, and the resources you need to grow your business with it.

What is Geofencing?

Geofencing is technology that draws a virtual fence around your business. You can specify the fenced area, which may be the shopping center where your store is located, a parking lot or garage, or even a larger radius around your store. When customers enter the perimeter, they’ll receive a notification that provides an incentive to visit your store.

Geofencing is an enormously effective marketing tool. To give you an idea of just how big of a difference it can make, here are a few stats to chew on:

That last statistic is interesting because it indicates that you can benefit from geofencing even if you have an online store because some people may not visit the store, but they’ll make a purchase later.

You should also know that geofencing can be used in online marketing. In 2020, people are visiting brick-and-mortar stores less frequently due to the pandemic. However, you can use last year’s shopping information to geofence people online.

Examples of Geofencing

A lot of big companies use geofencing and their success illustrates why it’s a marketing technique that’s worth your time and money. Here are some of my favorite examples.

The first is one that’s been used by both Starbucks and Dunkin’ Donuts. When people who have their apps come within a specified distance of one of their locations, they’ll receive a notification letting them know how close they are and offering a discount on their favorite drink. This option combines geofencing with personalization to great effect.

Cosmetics company Sephora uses geofencing in a smart and unique way. When a customer with their app enters a Sephora store, they receive a notification asking them if they want to use a “store companion.” The companion offers information about past purchases, recommended products, limited-time offers, and store events.

Finally, here’s an example that makes me laugh. Burger King used its app to send customers a notification to go to McDonald’s. That might seem crazy, but when users got within 600 feet of McDonald’s, they received an in-app coupon for a one-cent Whopper.

As you can see, geofencing offers you the opportunity to interact with your customers in a way that’s useful to them and profitable for you — and even to have a little fun along the way!

Geofencing Resources to Use

The idea of figuring out how to target customers based on their location may seem like a complex one but it doesn’t need to be. There are two main options to consider:

  1. Create an app for your business and include location with it. If you already have an app, you may have the ability to target customers locationally already. Set it up to send notifications within a certain radius of your store.
  2. If you want to send an ad to every mobile user in the area, whether they have your app or not, you’ll need to partner with a company that specializes in mobile advertising.

The good thing about creating an app is that you can do it at a relatively low cost and let your customers know that if they download it, they’ll receive special deals and discounts they won’t get anywhere else. The chances are good that your regular customers will be happy to download your app.

If you decide to build an app, here are some resources you may want to try:

You may opt for geofencing software instead. Here are some suggestions.

The above geofencing options are all free although some offer premium options as well. What I hope you’ll take away from this is that you don’t need to spend a lot of money to get started with geofencing. It’s a low-cost and highly effective way to connect with your audience.

If you’re someone who’s already used geofencing and wondering how to adapt it to online marketing, I suggest using your data first, to connect with your existing audience online and then, to create a lookalike audience. Doing so will help you connect with a new group of potential customers for your business.

Geofencing is one of those things I think is going to increase exponentially in the next five years. Now is a great time to implement it — and get a leg up on your competitors!