The strongest indicator of a customer's purchase intent is where they are going, and geofencing marketing is one of the most effective ways to leverage this. According to consumer behavior statistics, up to 70% of online shoppers are willing to share their location information in exchange for incentives such as offers or discounts. Using best practices ensures that advertising campaign objectives are met, including but not limited to a higher ROI at the lowest possible cost.
Nearly 90% of marketers say location-based marketing and advertising have increased sales, boosted customer interaction and expanded their customer base. Moreover, according to Markets and Markets, there is an expected increase in the global geofencing market of over $ 1.8 billion by 2022, representing a compound annual growth rate of 27.5%. As a result, now is the best time for companies to invest in it.
WHAT IS GEOFENCING MARKETING?
Geofencing marketing involves the use of GPS or radio frequency identification (RFID) for location-based ad targeting. Finally, a predetermined location is assigned a virtual boundary and everyone within that boundary receives display ads from a business. These advertisements may still be visible for up to 30 days after departure from the virtual restricted area.
Geofencing marketing offers accurate calculations to realize effective advertising campaigns. Unlike other marketing strategies, mobile ads with geofencing have a double click rate. A ecommerce for example, a clothing company can set up a geofence around a store that offers a similar service to its goods – accessories. Customers' devices will display banner ads promoting discount sales or coupons for the company when they are within this perimeter. Essentially, this could encourage people to visit the physical store.
WHAT ARE THE BENEFITS OF GEOFENCING MARKETING?
BOOST IN SALES
When a business's physical location is geofenced, it's called a conversion zone if customers visit it after seeing the ad. Studies show that 53% of shoppers visited a retailer after receiving a location-based message. Therefore, geofencing marketing increases the likelihood of reaching paying customers, increasing return on ad spend (ROAS).
REAL TIME DATA
By creating conversation zones, businesses can track in real time which people visit their store after viewing targeted ads. Thus, it makes it possible to identify accurate statistics usable for ad optimization. In addition, collecting information about consumer behavior is easy.
INCREASE BRAND LOYALTY
Customers who regularly view ads for your business are more likely to shop there than from a business they don't recognize. Geofencing marketing keeps your brand on the minds of customers through push notifications. Therefore, the chances of repeat business and developing loyalty to your brand are higher.
COMPETITIVE ADVANTAGE
Customers may receive ads directing them to your location if your company geofences around a competitor. Used in 2016 Dunkin Donuts famous geofencing marketing to lure customers away from the nearby rival coffee shops. They then sent tailored ads to those prospects. Of the 36% who clicked on the coupon, 18% saved it and 3.6 percent returned to redeem their coupon. This is a demonstration of a smart way to use geofence to gain a competitive advantage and win customers.
THE BEST GEOFENCING MARKETING PRACTICES TO BOOST YOUR BUSINESS
SET AN APPROPRIATE PERIMETER SIZE
Going big and wide can be tempting in the hopes of achieving more, but it can be counterproductive. Ideally, your geofence should be limited to a four to five minute commute, so you can reach easily when potential customers see your ads. It is also possible to set up multiple geofences in different locations for maximum benefits.
TIME ADVERTISEMENTS RIGHT
As a business owner, you need to keep your geofencing marketing efforts current and relevant to your customers. Tracking their movements and behavior within your geofences can help improve sales. While it may seem obvious, you should focus your geofencing marketing efforts on providing consumers with the right content at the right time. In addition, use geofencing marketing ads when your target audience can physically visit your business. Also show ads when your business is open.
CREATE IMPRESSIVE ADVERTISEMENTS
It's one thing to get your ads out there; it's another thing to engage your audience. It is estimated that the attention span of the average consumer is only eight seconds. Make your content worthwhile by using targeted in-app ads or customized social media content with a concise CTA and relevant information for your target audience.
IMPROVE DATA INSIGHTS
Using real-time data, companies can boost sales with geofencing by measuring and analyzing advertising success. In addition to collecting data, try studying various KPIs to get a full picture of the effectiveness of your geofencing campaign. By using data analysis tools, companies can also calculate their ROI from geofencing marketing.
KNOW YOUR TARGET GROUP
This is one of the basic principles of all marketing strategies. While geofencing marketing uses precision to achieve efficiency, companies still need to define their target audience. Ultimately, it will help create personalized ads that engage the audience and give the impression that the company understands its target audience. This, in turn, will increase brand awareness and ensure customer loyalty.
In short, geofencing marketing is exactly the kind of technologic advancement that ecommerce need. Now that it's available, entrepreneurs should take advantage of it. Use the above strategies in your business today and enjoy the financial improvement that will follow.
