Successful Geo-fencing for Your Business

By the Editors

Have you experienced a mobile marketing or research event that was triggered by your location yet?  If not, expect to see one soon! Geo-fencing is all the rage in mobile marketing, and it’s worth exploring how your business can benefit from using the technology to reach customers. As a consumer, it also pays to be aware of how businesses are using the technology.

The beauty of geo-fencing is that it allows you to target your mobile marketing message to a user’s exact location at any given time. The term geo-fencing refers to the geographic boundaries or “fences” that you set up to define the area you’re targeting, a trigger perimeter which is rooted to a specific central location.

Most often this is one of your company’s own retail locations, but it could be any point of interest where there are people you want to reach – any place, really, that you think potential customers might be open to receiving your message, such as a local stadium or gym or even a competitor’s retail location. A user enters your targeted area and this triggers the marketing message to be sent to their mobile device.

That all sounds great, but does it work? The short answer is yes! Research has shown that locally optimized ads can have 70% higher click-through than standard ads. Gordmans, a regional department store, saw a 200% increase in click-through rates, and the Hauser-Ross Eye Institute brought in 333% more revenue using geo-fencing techniques.

Other examples include Blue Moon Beer targeting travelers in airports, alerting them to which restaurants carry the product. Ford used it to achieve a 15.4% conversion rate with local dealer follow-ups to generate leads. Lionsgate Films used it with its Hunger Games movie release to achieve the highest-ever record of box office purchases made through mobile devices.

But the devil, as they say, is in the details. Users have to opt in, so making that happen is a major obstacle to successful geo-fencing campaigns and may rely more on traditional marketing and outsourced technology partners. Here are some other tips to keep in mind as you navigate the world of geo-fencing.

SMS Rules. Text messages are the easiest and best way to get the message out to participants. But you also don’t want to drown users with useless messages.  Many customers are still charged per SMS, so make sure that any geo-fencing triggered message carries real value.

Follow the Customer. Build your geo-fences where you know your customers already are, not necessarily where you want them to be. That’s why you need to consider locations that are not just your own retail sites. A deeper understanding of customer behaviors can greatly improve the effectiveness of these efforts.

Small is Beautiful. Building huge geo-fences just doesn’t work. The best rule of thumb here is that the perimeter should be less than four minutes travel time from the targeted location, whether that’s on foot (like in a mall) or driving (within blocks of the location).

Action is the Key. Don’t think of your messages as ads, think of them as a call to action that will engage the targeted user. The message needs to be brief, location relevant and prompt action. The message also needs to be important enough that the user will want to take that action.

Track Results. Track your metrics – especially as they relate to the bottom line. You need to find out if the resources you’re putting into geo-fencing are getting results. If not, either tweak the efforts or pursue other techniques that get the results you need.