How to Reach More Customers with Geofencing – Part 1

Geofencing is a tech thing that can sound intimidating. It sounds like it might be expensive and you need a lot of technical skills to figure out how to use it to promote your business.

It’s a strategy a lot of small business owners should be using so here is the breakdown of what geofencing is, how businesses are using it successfully, and the resources available to enable you to make the most of it.

What is Geofencing?

Geofencing is technology that draws a virtual fence around your physical location. You can specify a fenced area, which can be the shopping center where your store is located, the building where you do business and its parking lot, or even a larger radius around your store. When customers enter the perimeter of your fenced area, they’ll receive a notification you want them to receive.

Geofencing can be a really effective marketing tool. Here are a few stats to you to chew on:

  • 80% of shoppers say they are willing to receive location-based messages.
  • Over 50% of consumers who receive a location-based notification from a store will visit the store. (That’s a really high number.)
  • 72% of existing customer will follow through to make a purchase if a powerful Call To Action (CTA) is included in the ad and they’re near the location

That last statistic is interesting. It means you can benefit from geofencing even if with your online store. People may not visit the store, but they’ll make a purchase later. People are visiting brick-and-mortar stores less frequently, but you can still use shopping information from last year to geofence people online.

Here Are Some Example of Geofencing in Action

Here are some of my favorite examples.

Both Starbucks and Dunkin’ Donuts use geofencing a lot. When people who have their loyalty program apps come within a specified distance of one of their locations, they get a notification. It typically lets them know how close they are and offers them a discount on their favorite drink. This option combines geofencing with personalization.

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 tells them about past purchases, recommended products, limited time offers, and store events.

Here’s a really good one. Burger King used its app to send customers a notification to go to McDonald’s. They really did this. When users got within 600 feet of a McDonald’s, they received an in-app coupon for a one-cent Whopper. That’s a real twist on geofencing.

Geofencing offers you the opportunity to interact with your customers, get them engaged when they wouldn’t other wise be, increase revenue and even to have a little fun.

Take a look at part 2 of this article where I get into resources to help you make use of geofencing for your business.



Jorge Diaz

Jorge is an online marketing evangelist, speaker, author, coach, consultant, and adviser. He is the founder of Jorge Diaz Online and digital agency Larry Jacob Internet Marketing. He's leading a movement dedicated to transforming small business thinking. Having spent 20+ years in corporate software development and 8 years building small business online marketing systems making use of marketing automation platforms like Infusionsoft, Jorge has worked with hundreds of owner led businesses to increase revenue, systematize lead generation and grow their businesses.

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