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

More Videos

More Brand Posts

What are Chris Riddell's qualifications to talk about technology? What are the awards that Chris Riddell has won? I cannot seem to find ...

Tareq

Digital disruption isn’t disruption anymore: Why it’s time to refocus your business

Read more

Enterprisetalk

Mark

CMO's top 10 martech stories for the week - 9 June

Read more

Great e-commerce article!

Vadim Frost

CMO’s State of CX Leadership 2022 report finds the CX striving to align to business outcomes

Read more

Are you searching something related to Lottery and Lottery App then Agnito Technologies can be a help for you Agnito comes out as a true ...

jackson13

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Thorough testing and quality assurance are required for a bug-free Lottery Platform. I'm looking forward to dependability.

Ella Hall

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Blog Posts

Marketing prowess versus the enigma of the metaverse

Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.

Liz Miller

VP, Constellation Research

Why Excellent Leadership Begins with Vertical Growth

Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?

Michael Bunting

Author, leadership expert

More than money talks in sports sponsorship

As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.

Simone Waugh

Managing Director, Publicis Queensland

Sign in