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
cmo-xs-promo

Latest Videos

More Videos

who wants to date me I am 9 years old and i am a boy

Jeremy Hawkins

Sink a sub gaming experience signals Subway's renewed brand push

Read more

Great read. I agree that it should be a perfect balance between interacting with your customers and knowing your brand. As a business, yo...

Caroline Scott

7 ways CMOs can improve their customer engagement game

Read more

Very true. Team development helps improve collaboration among the team members. I was able to improve my team's collaboration skills by t...

Quent Sinder

Why empowering others can help make you a great leader

Read more

CRM is a very good software that can help you succeed in your business. In my company, this system has allowed me to improve customer rel...

Anna Janicka

Sensis rebrands to Thryv and brings business software to Australian SMBs

Read more

AI Leasing Assistants have finally arrived for the multifamily industry. With so many to choose from it can be hard to figure out which i...

Alice Labs Pte. Ltd.

CMO's top 8 martech stories for the week - 6 May 2021

Read more

Blog Posts

Unboxing 101 - How savvy influencer engagement can build a brand

The humble unboxing video is a powerful tool. Correctly executed, it harnesses consumer fandom, viral authenticity and brand design magic to deliver a high-impact message to a tightly targeted cohort of consumers.

Gali Arnon

Chief marketing officer, Fiverr

​Power to the people

Purpose is the ultimate statement of intent for many organisations. Why are we here? What are we trying to achieve?

Rich Curtis

CEO, FutureBrand A/NZ

The playbook to develop strategic brand moats

Warren Buffet is an unlikely ally for marketers. But his belief businesses need strategic moats that increase their value in the market while acting as barriers to competitors can offer marketers a new playbook for brand building and driving growth.

Fabian Di Marco

Founder and managing director, Tzu & Co

Sign in