Have you ever heard of geofencing? The expression brings to mind a picture of an invisible fence/barrier, which really isn’t actually wrong. Geofencing creates a virtual, electronic boundary around a specified area, and the clients get special alerts on their cell phones when they enter and reside within that area.
This latest, new location-based technology is used for multiple commercial and residential proposes. Businesses use it to target the appropriate audience at the right time for a particular marketing message. With extensive use of smartphones, geofence marketing is valuable and practical to small and big companies alike.
What is Geofencing?
Geofencing is an innovative location-based technology that lets you set virtual, boundaries around a specific geographic location. That electronic boundary is also referred to as geofence and is located by the virtual GPS (Global Positioning System).
Once the geofence has been set up, it can be used for various purposes depending on the needs of the business or household. It is a powerful activation tool that will convey desired messages to a user when they exit or enter a geofence. It helps businesses a great deal in sending highly personalized messages to customers.
How does Geofence Work?
Geofence works by using location-based technologies built-in user’s smartphones such as GPS, Bluetooth, Wi-Fi, or other cellular technologies.
- RFI (Radio Frequency Identifiers):
Also referred to as Bluetooth technology makes use of tiny computer chips to send and receive radio waves from other devices to connect to each other.
- Global Positioning System:
The GPS is a system of satellites revolving around the earth that is intended to accurately locate a person’s location.
- Beacons Technology:
In collaboration with location-based technologies and alert apps present in smartphones, beacon technology uses Bluetooth signals that tell business owners when you approach near a beacon (such as a cash counter or check out the gate in a store) or leave a location.
Pros of Geofencing:
Here are some advantages of using geofencing in businesses as well as in homes.
- It can aid in monitoring employees, tracking their records, recruitment, sales and lead generation, and on-the-ground training.
- It enables marketers to target clients in retail outlets with ads fitting to their needs. It also guides them to the right sections of the store to increase convenience and hence sales. It also impacts customer’s purchase decisions by offering deals and packages according to their buying behaviors and needs.
- Geofencing is easy to implement as it does not require additional equipment to operate. Simple mobile apps are enough that are easily available for iOS and Android devices.
- The apps work with Google maps and provide information to business owners and marketing alerts to buyers. Hence it is very cost effective due to the extensive use of cell phones and accessibility of free apps.
- The ability to reach higher search engine results, especially in local searches (local optimization), is crucially important for most local business organizations (and their SEO). And geofencing helps tremendously to improve local performance.
- Geofencing does not only generate sales but also keeps a statistic record of customers (and employees if needed); hence it is also used as an analytical tool for metric analysis. If clients are coming in with marketing from geofencing, there are various dimensions you can measure, like what deal brought the customer to the shop, how long they stayed in the store, how regularly they return to visit your business etc.
- Another major advantage of geofencing is that it allows you to gather information to customize client offers. It provides you demographics about the nearby population, like what type of offers convince them to come to your store so that you can arrange for more of those offers.
- Geofencing also serves for security purposes for business organizations with high-security risks. It can detect unidentified entries or exits from a certain area. It can also be used to impair and turn off a device that has highly classified information if it crosses a certain geographic limit.
- Business organizations whose employees work out in the field can utilize geofencing monitoring and tracking them. It can help in employee training and recruitment by sending job alerts to applicants in the nearby area. Ride-sharing apps such as Creem and Uber can utilize it to notify potential travelers inside a geofenced area
- Geofencing offers highly-relevant customer targeting by connecting with only those clients who are in a situation to make a prompt action and purchase.
Cons of Geofencing:
Following are the downsides or disadvantages of geofencing:
- The accuracy of data gathered through geofencing is not completely reliable. The accuracy and size of the geofence rely upon the area’s location and the technology used. The positioning technologies used for geofencing, such as GPS (Global Positioning System), Wi-Fi, or cellular, offer accuracy that varies from 15 meters up to 50 meters. Businesses that use smaller geofencing use Bluetooth technology as locating technique, such as Eddystone and iBeacons as reference points offer accuracy of around 2 meters.
- Though geofencing seems magnificent because of its various benefits; a major drawback of it is privacy invasion to some extent. As it gathers a lot of data about its customers, though apparently not of significant importance, it still is a source of concern among many people. Many people have expressed worry about how an initiated geofence feels like an intrusion to their privacy. For example, the technology can readily tell somebody precisely where you are if it is active in your cell phone at that time.
- Another relatively minor but significant drawback of this technology is that it drains the phone’s battery faster because it keeps running in the background apps so it isn’t suitable for high battery consuming devices.
- Reach to customers is not that easy as it seems with this technology. It is limited by many things. People will get shopping or promotional alerts only when they are active on their devices or aware of the notifications. It also depends on what potential customers are doing at that time. If someone is busy sleeping, driving, eating, riding a public vehicle, or doing their job, they are not likely to pay heed to your alerts or notifications.
- While this technology proves to be effective for impulsive buyers, it is not of much use for expensive purchases. No one will purchase something like a car or washing machine just because they get the message within a certain area. This is useful for small scale purchases and everyday consumables.
To Use or Not to Use Geofencing:
While pros seem encouraging and cons discouraging, the question is what better measures could be taken to reap benefits from this advancement in the business field. Just because it is the coolest, greatest and newest technology today does not mean it can be applied blindly to businesses. In order to get the best geofencing services in Chicago, make use of the following tips:
- If you think it is feasible for a business to use it, make sure you assure your customers of their privacy and build trust with them. Let them know your intention and make them feel that they are in control of their privacy and can choose to opt-out of the deal anytime.
- As only nearby people and those who are mostly on foot are targeted, it is wise to cast a net that isn’t too wide. It will help in achieving better accuracy and will prove more productive. Combing it with other digital advertising apps can reap maximum benefits.
These are only a couple of issues that may occur while using geofencing; otherwise, it is an incredible engagement tool and is well worth trying.
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