How to Geo-fence Your Way to Increased Customer Engagement and Higher Conversions

By the Editors

When online retailers began offering steeply discounted products, often coupled with free shipping, traditional brick-and-mortar retailers saw a mass exodus of customers. Many individuals still coming to stores are doing so just to try things on or physically check products out before buying them online at a better price.

Geo-fencing has been touted as one way that non-virtual storefronts can increase foot traffic. When customers who have opted in are within a digital perimeter of a store location, they receive a text message for a special offer, or a deal or coupon to tempt them to actually enter the store. The basics are simple. But it still depends on customers opting in, so the more creative the campaign, the more likely it is to really work. Here are two fantastic case studies of brands with brick and mortar locations making innovative use of geo-fencing:

Gap Coupon Promotion Focuses on Public Transit. Gap’s springtime 2012 Be Bright campaign was a successful exercise in geo-fencing that centered on reaching people who were waiting for the bus at a stop located near one of its stores. It’s common for people waiting for the bus to have their mobile phones out to catch up on email, check Facebook, or kill time by playing a game.

Gap set up geo-fences centered on bus stations and store locations in New York, Chicago and San Francisco. Bus riders who opted in received a coupon for $10 off purchases of $50 or more. The results were impressive – 2.5 million impressions with a click-through rate of .93%, compared to the industry standard of .20%, all during just two weeks. The key to this campaign was being creative around reaching people at the right time and place.

McDonald’s Pick ‘n Play Combines Geo-fencing, Gaming and Free Food. In Stockholm, a large digital billboard was installed in a prominent central square that featured the simple game, Pong. Smartphone users who saw the billboard and were within the geo-fence area could connect up and play Pong on the giant screen using their phone as the joystick, without needing to download any app at all.

The game would get harder as it went on, and players who lasted at least 30 seconds were rewarded with a coupon sent to their mobile phone for free food at a nearby McDonald’s. The key point was that the company combined the fun of public gaming (and no app download needed) with freebies.

Not every business has the resources to put a giant digital billboard in a prime location, but the point here is to think outside the box in terms of making geo-fencing work for you. In the case of Gap, it was targeting a group of people who it knew would be killing time near its stores. In the case of McDonald’s, it was the fun of public gaming combined with free product giveaways.

For businesses that are ready to cautiously test mobile, geo-fencing for potential customers near your location can allow you to offer them a discount. This increases the chances of them converting and making a purchase on the spot. If you’re trying to increase participation in mobile market research initiatives, geo-fencing can allow you to get real time feedback on key initiatives from consumers in the area.