5 Things You Need to Know About Geofencing

Here's what you need to know about this location-based mobile service that lets marketers send messages to your smartphone when you enter a defined geographic area, such as a shopping mall.

1. It can engage local shoppers. Geofencing is a location-based service that sends messages to smartphone users who enter a defined geographic area. Some companies send promotions to customers' smartphones when they enter a store, mall or neighborhood.

It's easy to get started: "All you need is an app and GPS coordinates," says Tony Costa, an analyst at Forrester Research. But he says geofencing is immature because most companies haven't integrated it with their CRM systems.

2. Deals can be hyper-local. Knowing that customers are nearby lets businesses tailor offers based on local events or holidays. For example, 1-800-Flowers deployed targeted ads for 20 percent off bouquets in the days leading up to Valentine's Day.

Their ads could pop up in any app someone was using when they entered a specified area. Amit Shah, VP of online, mobile and social at 1-800-Flowers, says the company wanted to push traffic to its retail stores. "The ad is a click-through map and opens to show your location and how to get [to the store]."

3. It leverages your location. By sending a targeted offer to a customer in a parking lot, you may be able to steer them away from competitors. Apps such as Shopkick give customers rewards, such as gift cards or coupons, for walking into participating stores.

Companies can also work with businesses that offer complementary products. For example, 1-800-Flowers geofenced the area around jewelry stores that are close to their flower stores. Shah says if people are shopping for jewelry, they may want to pick up flowers as well. When a customer walks up to a jewelry store, they receive a discount offer for a bouquet from 1-800-Flowers. "Figure out what situation [customers] are in and attack that context," he says.

4. It adds depth to analytics. "If you have behavioral models, location gives you another layer of understanding," Costa says. Using data analytics, companies can see whether targeted offers actually bring people into stores and result in more sales. Other metrics include how often a customer visits the store, how long they shop, and how well a window display works.

5. You need more rewards. When you know where customers are and how they behave, you can not only customize offers but also give them rewards and a personalized experience. Neiman Marcus is piloting geofencing in its stores so salespeople can see when VIP customers are in store, look at their purchase history and provide more personalized service. But Costa warns: "Make sure it's not intrusive, make sure it's additive. The value exchange has to be there."

Lauren Brousell is a staff writer for CIO magazine. Follow her on Twitter @LBrousell. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn.

Read more about mobile/wireless in CIO's Mobile/Wireless Drilldown.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

Launch marketing council Episode 5: Retailer and supplier

In our fifth and final episode, we delve into the relationship between retailer and supplier and how it drives and influences launch marketing strategies and success. To do that, we’re joined by Campbell Davies, group general manager of Associated Retailers Limited, and Kristin Viccars, marketing director A/NZ, Apex Tool Group. Also featured are Five by Five Global managing director, Matt Lawton, and CMO’s Nadia Cameron.

More Videos

Thanks for nice information regarding Account-based Marketing. PRO IT MELBOURNE is best SEO Agency in Melbourne have a team of profession...

PRO IT MELBOURNE

Cultivating engaging content in Account-based Marketing (ABM)

Read more

The best part: optimizing your site for SEO enables you to generate high traffic, and hence free B2B lead generation. This is done throug...

Sergiu Alexei

The top 6 content challenges facing B2B firms

Read more

Nowadays, when everything is being done online, it is good to know that someone is trying to make an improvement. As a company, you are o...

Marcus

10 lessons Telstra has learnt through its T22 transformation

Read more

Check out tiny twig for comfy and soft organic baby clothes.

Morgan mendoza

Binge and The Iconic launch Inactivewear clothing line

Read more

NetSuite started out as a cloud-based provider of Enterprise Resource Planning software or as NetSuite solution provider, which companies...

talalyousaf

NetSuite to acquire Bronto's digital marketing platform for US$200m

Read more

Blog Posts

Getting privacy right in a first-party data world

With continued advances in marketing technology, data privacy continues to play catchup in terms of regulation, safety and use. The laws that do exist are open to interpretation and potential misuse and that has led to consumer mistrust and increasing calls for a stronger regulatory framework to protect personal information.

Furqan Wasif

Head of biddable media, Tug

​Beyond greenwashing: Why brands need to get their house in order first

Environmental, Social and (Corporate) Governance is a hot topic for brands right now. But before you start thinking about doing good, Craig Flanders says you best sort out the basics.

Craig Flanders

CEO, Spinach

​The value of collaboration: how to keep it together

Through the ages, from the fields to the factories to the office towers and now to our kitchen tables, collaboration has played a pivotal role in how we live and work. Together. We find partners, live as families, socialise in groups and work as teams. Ultimately, we rely on these collaborative structures to survive and thrive.

Rich Curtis

CEO, FutureBrand A/NZ

Sign in