What Is Geofencing Marketing? A How-to Guide

Geofencing marketing is a unique way to trigger ads to appear when someone is near a designated business location. It is a location-based marketing tactic that is highly effective. You can target customers that are nearby a store location, and therefore, more likely to visit or make a purchase.

Today, no one leaves the house without their mobile phone. The rise of mobile in the last decade has paved the way for geofencing marketing. Here are some statistics that illustrate the relationship between mobile and geofencing marketing: 

Business owners and marketers in industries ranging from retail to restaurants leverage geofencing to attract more leads offline and online. If you’re not, you could be missing out on revenue. 

To get started, we’ll dive into how to use geofencing for your business. We’ll also highlight examples of how companies like Starbucks and Dunkin’ use geofencing marketing to drive sales.

What Is Geofencing? 

Geofencing creates a virtual fence (usually referred to as a geofence) of a certain preferred radius. When someone enters or exits your designated area or geofence, it sends a marketing message or ad to their phone. 

To work, geofencing relies on modern technology like Global Positioning System (GPS), WiFi, Radio Frequency Identification (RFID), and Bluetooth. 

Geofencing is a type of location-based mobile marketing strategy. When a potential customer enters the designated geographic area, the geofence initiates a scheduled action through the prospect’s mobile device. These actions may be promotional texts, social and web ads (search and display), or in-app and push notifications. 

Geofencing vs Geotargeting

Geofencing is one of several targeting methods and it sometimes gets confused with geotargeting. While both fall into the wider group of location-based marketing strategies, there’s a slight difference. 

Geo-targeting sends promotions based on the consumers’ location criteria, like their interests, behaviors, and demographics. On the other hand, geofencing sets a virtual fence around a geographic location and targets users within the mapped area. 

Geofencing Marketing Examples 

One of the best parts of geofencing marketing is that you can target multiple areas at one time. For instance, you could target your business locations, in-person events, competitors’ locations, and learning institutions like colleges and universities.

We’ve compiled a few examples to help you see the power of geofencing marketing in the real world. Below are some notable geofencing marketing examples: 

1. Starbucks and Push Notifications 

Starbucks uses push notifications and geofencing to send personalized offers to customers. When they are near a store, Starbucks sends a push message to customers that have downloaded the Starbucks app. 

These push notifications are meant to entice customers into visiting the nearby store and making a purchase. For instance, they might roll out a special buy one, get one free promotion. Upon opening the notifications, users see a page that explains the promo and leads them to their nearest Starbucks. 

2. Food Delivery Services 

McDonald’s has leveraged the power of geofencing and taken its delivery services up a notch. When users make orders, McDonald’s can predict their arrival time and ensure that customers only find freshly-made orders. 

That has immensely improved their customer experience and earned them many repeat purchases. Plus, through the data collected and analytics, they’ve improved their targeting, thereby drawing more leads. 

3. Dunkin Donuts Geo-conquesting 

Geo-conquesting uses geofencing to attract customers away from your competitors. You are still setting up a geofence. The difference is that instead of just targeting an area around your business location, you target your competitors’ locations too. 

Dunkin’ capitalized on geofencing marketing to lure customers away from their competitors’ locations by sending coupons on their mobile devices. Out of the 36% of people who clicked on the offer, 18% saved the coupons, while 3.6% redeemed their coupons. 

An example of geo-conquesting is Burger King’s Whopper Detour campaign. Burger King drew more than one million app downloads days after setting up geofences around their competitor’s locations. In short, geofencing marketing has the potential to pull massive customers away from your competitors. 

3. Sephora’s Store Companion 

Sephora’s store companion feature is another excellent example of geofencing marketing. As their customers enter areas near Sephora stores, the app notifies users of their purchase history, product recommendations, limited offers, and store news. Apart from improving customer satisfaction, Sephora utilizes geofencing technology to market to users whenever they enter geofenced zones. 

A similar example happens during college football season. During that time, many brands set up geofences around stadiums and colleges to target fans and students. 

How Do You Set Up Geofencing Marketing? 

Marketers usually set up geofences using various channels such as social platforms, the web, and text messaging. Here we will look at two popular ways to utilize geofencing: 

Geofencing marketing on Google 

It is possible to set up geofencing marketing on Google. Through Google’s ad platform, you can select your campaign. Head to the settings page, and choose a number of targeting options such as country, zip code, or state. Then choose your preferred location and radius for more specific targeting. These ads can appear on search results on Google and YouTube.

Geofencing marketing on Facebook

Like search engine ads, many social media platforms such as Facebook allow geofencing marketing. On Facebook, you’ll have to choose the location to target using the normal campaign setup process–you may exclude other areas. Then, determine your radius on the chosen area, and ads will be relayed when consumers enter the geofenced areas. 

Alternatively, to save yourself from all the hassles and maximize effectiveness, you can work with a geofencing marketing agency. An agency can set up geofencing for you on multiple platforms including social media, Google, third-party apps, and text messaging. The advantage of that you get increased reach and ad performance, without having to manage it day-to-day. 

Geofencing marketing with an agency

Geofencing marketing comes with many creative ways to source new customers, retain existing customers, and improve your customer experience. With it, you can reach in-market customers and increase your return on investment. 

If you’re ready to set up a geofence to target customers near your business locations, but don’t have the time or desire to do it, get in touch with us. We can help you set up geofencing marketing and more.