Geofencing in SMS marketing is essential for reaching your target audience and generating many new leads.
Geofencing enables marketers to reach consumers with targeted content on various platforms and devices. When activated, geofences can send mobile push notifications, text messages, or alerts, target advertisements on social media, track vehicle fleets, prevent technology usage, and offer location-based marketing data.
A mobile opt-in is required for geofencing – that is, customers’ permission to access their location data and receive location-based offers.
How Does Geofencing Work?
A developer or administrator must create a virtual barrier around a specified location in GPS- or RFID-enabled software to use geofencing.
To begin, you must register your users in your SMS campaigns and then invite them to join your SMS geofencing list so that you may monitor and utilize their location. Most likely, if you’re creating an SMS geofencing marketing, you’ve already determined the distance of your store. You may now track people in the radius you specified after setting your geofence and encouraging individuals to join your text messaging services.
Customers will be notified via text message when they enter the radius. Customers are given pre-written messages regularly. As a result, any individual who enters your geofence gets an automated text notification. The message will contain a special offer or discount, as well as any other bargain that entices your customer to come to your store and make a purchase.
You can use text messaging services while the consumer is in your store and send them a message with a 20% off coupon if they return within two or three days.
You may utilize geo-tracking to engage consumers and encourage them to make a purchase whenever your subscriber is in the vicinity of your business.
SMS geofencing is not being used as a viral campaign, but it should be. It leverages the power of mobile to attract consumers to your store. However, SMS geofencing campaigns are underutilized and seldom known, yet they may be a fantastic method to improve sales and interaction rates.
What are the Applications of Geofencing?
Geofencing may be used for a variety of commercial activities. When a geographical region is established, the possibilities for what businesses can accomplish are endless.
Geofences are another method for a business to gather information about you and your preferences. These can be used with data from social media platforms, marketing, ad companies, web analytics vendors, and other sources.
Here are seven typical applications of SMS Geofencing:
Businesses use geofencing to deliver in-store advertisements, informing you when you enter the store’s range. Geofencing also aids firms in determining which marketing types and strategies are most effective by using users’ location data.
2. Social Networking
In social media marketing, geofences target customers who have engaged with your brand’s social networking services. To provide suitable deals or offers based on the customer’s location, it must know where that individual is currently located.
3. Audience Engagement
Geofencing engages crowds at organized events, like concerts, festivals, fairs, and more. For example, a concert venue might use a geofence for crowdsourcing social media posts or delivering information about the venue or event.
4. Human Resources
Geofencing is used in some businesses to monitor the location of their workforce, such as delivery trucks and salespeople. It’s a simple method to automate time cards and clock in and out staff as they enter and leave the workplace.
Telematics is a market segment that provides telecommunication services for vehicles. This field utilizes geofences to allow drivers to use mobile applications and get alerts about their vehicle’s location and health. They’re also able to do the same for their fleet of vehicles.
6. Smart Appliances
One of your appliances might not be so dumb after all, and geofencing helps you keep track of everything in your home with smart devices like refrigerators, washing machines, and more. You can receive alerts and monitor energy use as well as location data.
Businesses implement geofences around their retail stores, warehouses, and other facilities to alert them when a security threat has occurred. Geofencing gives a company a chance to prevent a crime by understanding which areas need extra protection based on the time of day or a customer’s past behavior.
What are the Benefits of Geofencing?
The advantages of geofencing include the potential to improve sales revenues and brand recognition for virtually any physical location. Location-based advertising is revolutionizing the digital marketing landscape. Here are five ways geofencing might help you get more visitors to your website.
1. Better Targeting
Geofencing is a location-based technology that allows marketers to reach their target customers when they’re in a specific area, at a time relevant to the visit, and while they’re engaged in certain activities associated with your brand.
When you focus your marketing efforts on a distinct geographic region and filter that area by specific targeting criteria, you’re far more likely to engage your prospects. The example from Sephora: A marketer would not send out the “lipstick” message to just anyone who passed by; instead, they would target that ad to those who were near a Sephora store.
Geofencing allows you to concentrate your marketing efforts on an audience within a specified distance of your location or another essential location. It prevents you from overextending your campaign to people who cannot respond to your company, ensuring that your advertisements are irrelevant to them.
2. Improved Data Collection
Enhanced event-based data collection is another benefit of geofencing technology. Using advanced location and timing triggers to send customized messages allows you to capture more detailed information that helps you understand the customer better and provide a higher level of service.
A company can improve the user experience, increase engagement, and better understand user behavior by combining this data with online activity, purchase information, and web surfing behaviors. This data may also be used to target individuals who have previously visited specific places to provide tailored follow-up messages.
3. Personalized Customer Experience
When you combine all of your location-based data, you can deliver a personal experience that considers where your customer is, what they’re interested in doing, and which devices they’re using. Geofencing technology allows marketers to develop creative ways to provide customers with the right message at the right time on the right device.
You may also use information from social media sites to produce customized advertising. For example, suppose a prominent, local high school basketball team is having a fantastic season. In that case, you might utilize that data to develop some bespoke offers via a personalized text message. (for example, one free coffee every time the Wolves win!).
Consumers are more likely to interact with your brand if your app delivers relevant offers at the appropriate moment. It promotes greater consumer engagement, loyalty, and advocacy.
4. Competitive Advantage
By making your mobile app an essential part of the customer experience, you’ll connect with customers using personalized messages and location-based triggers. This strategy allows businesses to differentiate themselves from their competitors and maintain a competitive edge.
Consider where your customers are likely to be when deciding where to install your virtual fence. It may not always be where you are. Many large companies have found that utilizing this approach is highly beneficial. Because geofencing enables you to divert consumers away from the competition, it’s an excellent method to get their attention.
Dunkin Donuts launched a similar campaign last year. It utilized geofencing technology to attract customers away from the competition by establishing geofences around rival cafés and sending tailored advertisements to those prospects. Of those who clicked on the offer (a discount), 18 percent saved it, while 3.6 percent returned to utilize their coupon.
One of the advantages of geofencing is that it allows you to target your competitors’ consumers. A fence may be erected around the area surrounding a rival firm, and when a potential customer enters that fence, you may offer them a tailored ad with a prize for them to return to your store instead.
5. Spend Effectiveness
When your advertising is highly targeted and delivered at the perfect moment and location, you will see an increase in engagement. You’re spending money on prospects who are most likely to take action with geofencing, while you’re spending less money on those who aren’t.
Geofencing-enabled advertising is exact and timely. It implies that your consumers are in the correct frame of mind to respond to them. The conversion rate for relevant advertising is far greater than general ads. In the case of brand awareness, less targeted advertisements may be useful, but the ROI is considerably slower.
The more general your advertising needs to be, the larger your target audience. In these situations, you must appeal to the most people possible. You may target your advertising to a narrower demographic of people by using geofencing. You can connect with them more successfully as a result of this customization. More sales are generated for your campaign as a result of these changes.
What are the Statistics of Geofencing?
Geofencing may deliver stunning results for marketers wanting to deploy hyper-targeted, location-based marketing. But don’t just take our word for it. Here are statistics on the effectiveness of geofencing, provided by some of the best minds in this burgeoning industry:
- 91% of people believe companies must acknowledge their presence when they enter a store.
- 77% of consumers say they’d be willing to provide their location if asked on a mobile device.
- The click-through rate for geo-targeted advertising is two times greater.
- The majority of smartphones are compatible with geofencing.
- The typical consumer spends 5 hours each day on their mobile phone.
- Personalized advertisements are more popular, with 70% of consumers opting for a customized ad experience.
- When consumers approach a specific spot, 3 out of 4 people will perform an action based on the message they receive.
- 59% of customers visited a store after getting location-based messages.
How do Marketers Use Geofencing?
There are various ways marketers can use geofencing, and here we’ve outlined five of the most popular:
1. SMS Geofencing
Many companies send their customers a text message near the store. This method is highly effective for targeting mobile phone users thru SMS marketing. There’s no way your business can afford to waste money on text messages every day. Through geofencing, every penny is worth the spend. When a consumer enters a geofenced area, text messages are only sent.
2. Brand Application
You may encourage your customers to install an app on their smartphones. It may deliver coupons, advertisements, or any other promotional material that will attract your consumers away from your rivals. You can also recommend products to these individuals based on their previous purchase history.
3. Social Media Ads
Geofencing isn’t just for mobile phone users. If your company has a social media presence, you can also encourage visitors to connect with you on that platform. Your ads will be sent to those nearby or currently in the vicinity of your business.
4. Web Ads
When someone searches for specific product types on Google, they may see an advertisement provided by your company. You can also provide them with information related to the product search they are conducting, ensuring that your business is constantly in their minds.
5. Third-Part App
Let’s assume you don’t have your app and want to use another one to send notifications. A restaurant, for example, can use coupon software to offer discounts when a consumer enters a geofenced region.
How to Implement a Successful Geofencing Strategy
When considering how to use geofencing, keep your customers’ routines in mind. Where do consumers typically go? What other businesses pique their interests?
When you know your consumers, you may design geofencing campaigns that are more likely to result in customers.
Geofence marketing entails more than simply setting up a digital barrier around your company and sending local consumers a coupon. Specific strategies can enhance the effectiveness of your marketing strategies while also providing you with a competitive advantage.
Try these seven tips to elevate your geofencing strategy.
- Choose smaller geofence – The geofence should establish a radius to ensure that customers are close to your business.
- Make sure consumers receive notifications – With this form of marketing, your goal is to have the consumer immediately perform a specific action when they walk past your company’s area. Make sure they can receive notifications beforehand.
- Mix up your geofencing campaigns – Don’t send out the same advertisement every time a consumer enters your geofenced region. The more personalized you can make your marketing campaign, the better.
- Cross-promote to other platforms – When someone receives a text message from you, they will likely open it primarily on their smartphone. Cross-promotion is beneficial because consumers can also see this message on your company’s Facebook and Instagram accounts.
- Focus on CRM – Try using a CRM system to keep track of all the customers you interact with, as well as those who sign up for your email list. You can then send messages that are more personalized to one another based on these details.
- Be transparent – This is extremely important when it comes to geofencing. If you’re going to use this form of marketing, make sure your targeted consumers know that they can receive messages when they walk by your business. Don’t trick them into believing that the only way to receive such a message is by installing an app or signing up for an email list.
- Provide value – This should be a given. Your ultimate goal as a business owner should revolve around providing value to your consumers. In the case of geofencing, this means providing them with discounts and other promotional material that will have them thinking about your company every time they walk by.
What is the Cost of Implementing Geofencing Strategy?
CPM and CPV are the most common buying models for Geofencing campaigns. CPM (Cost per Mille or Cost per 1,000 impressions) refers to paying for every thousand impressions, whereas CPV (Cost per Visit) means paying for every visitor.
The CPM Model ($3.50 to $15)
The most popular buying model for geofencing is CPM, which typically involves brand awareness efforts or initiatives targeting a specific demographic.
The cost of a mobile and desktop campaign may be anywhere from $3.50 to $15 CPM, while Connected TV campaigns typically cost between $20 and $50 CPM.
The cost for CPM advertisements varies considerably. It depends on various criteria, such as the number of impressions purchased or the targeting methods employed. The higher the CPM is, the more localized or restricted your targeting is.
The CPV Model ($.10 to $1)
The alternative is CPV, which typically does not have minimum purchase requirements and has a low maximum budget of around $40 per campaign.
This model allows for a higher frequency, but it also costs much more when comparing the same amount of impressions because you are paying for actual visits rather than just displaying ads.
It may be challenging to keep track of all the different CPV pricing factors. For example, suppose a company has multiple drive-to locations for its campaign, each targeting and data layer. In that case, the costs will vary depending on how many impressions are available based on the campaign’s targeting techniques.
CPV or Cost-per-Visit is typically more expensive than CPM. It is because you are paying for actions, not impressions. For instance, if a CPM campaign costs $0.25 per 1,000 impressions and a CPV campaign costs $1.00 per visit to your location, the CPV campaign will cost ten times that of the CPM one.
What is the Future of Geofencing?
Geofencing is still in its infant stages, which means many more possible applications for this technology.
The way marketers use geofencing will likely change drastically over the next few years. It does not mean that it will soon go away but rather become a more effective way to track data and react quickly to any changes in consumer behavior.
There are some limitations with geofencing, especially regarding consumer privacy. Massachusetts just became the first state to pass a consumer protection bill last year objecting to location-based advertising.
Geofencing does not appear to be going out of style any time soon despite safety concerns. According to a press release from MarketsandMarkets, the geofencing industry is anticipated to expand at a compound annual growth rate (CAGR) of 27% between 2019 and 2022, owing to “technological advancements in the use of Bluetooth, Wi-Fi, and GPS.”