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Geofencing Can Build Loyalty & Drive Sales

June 06, 2017  /  by  Diane Callihan

But There Are Downsides to Geofencing Too

There are lots of “geo” buzzwords in marketing today, and one of the buzziest is geofencing.

Imagine this. You walk into a mall that has a Starbucks. As soon as you enter, you get a notification on your phone that says, “Hey, we haven’t seen you for a while. Stop by now for a free Unicorn Frappuccino.”

Or maybe you had dinner at a nice restaurant. As you leave and walk to the parking lot, you get a text: “Thanks for joining us for dinner. How was your meal? Was there anything we could have done better? Please take this quick survey.”

Or imagine that you go into a car dealership, and get a message that the competitor across the street is offering zero percent financing.

These are all examples of geofencing in action.

A geofence is a virtual perimeter that you can establish around any location (such as a store or a competitor’s store), and then target customers that enter or leave that perimeter.

As shown in the examples above, geofencing (when combined with your customer data) can be great for building customer loyalty, gathering customer insights, promoting offers and driving sales.

There are, however, some challenges with geofencing. First of all, your users must be on your app or on their mobile web browser – checking their email or texting is not enough. They also must have location services activated, so you can track them via GPS.

GPS can drain phone memory so sometimes people have this feature disabled. There are also privacy concerns as not all users want people to know their location.

Additionally, the user must have push notifications enabled to receive your messages.

There is also network-based geofencing, which instead of using GPS, uses your cell phone location data to determine where SMS subscribers are located.

If the user has opted in to receive SMS alerts, they will receive a text message alert as soon as they enter the geofence range. No app is needed for this, and it will not drain your battery, but it is less precise than GPS. Also, if a user becomes inundated with alerts, they may opt to shut the service down.

Geofencing can be a great way for willing participants to receive special deals or offers from you, but it’s adoption rates are still relatively low. Make sure you understand both the opportunities and potential problems before you start your own geofencing campaign.

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