GeoFencing – What Is It and How Does It Work?

One of the latest technologies to enhance marketing is known as geofencing. This type of technology allows businesses to target a specific geographic area to market digitally. Marketing specialists can then use very specific advertisements or informational packets to encourage a customer to make a purchase.

What Is Geofencing Technology?

Geofencing uses GPS and RFID (radio frequencies) to “build a fence” around a specific geographic area. For example, a grocery store may put up a geofence of 1,000 feet around their store to broadcast specials or coupons to anyone who drives by, or a home builder may place one around each of their model homes that will broadcast specific information about each home to any potential buyer.

The technology can be used via an app or through Google location services. Geofencing technologies are also used for many other purposes such as security, tracking fleet operations, and even time clocks.

How Geofencing Works

Geofencing can be set up to work in several ways. For marketing purposes, geofencing usually triggers a “push” when someone enters within the fenced zone. A retailer may send out an email or a targeted advertisement to anyone who enters into their zone encouraging them to come in and make a purchase. Retailers may also use geofences to cast over their competitors. When a customer enters the competitor’s zone, they are notified of different pricing or a sale at the original retailer in an effort to encourage the person to leave that store and return to the retailer for the purchase.

Many retailers need an app to be installed to make these geofencing techniques work. In an effort to encourage more consumers to use their app so that they can use geofencing techniques, many offer consumers app-only sales and discounts. It is a win-win situation for consumer and retailer.

The Future Of Geofencing

The ability for businesses to create very specific and targeted marketing plans through geofencing is becoming very popular throughout all industries. In addition to being able to interact with consumers on a more personal level, it also allows marketers to reach more people who are already interested in a specific product or service to encourage a sale.

Geofencing use is expected to increase by nearly 30 percent over the next few years, and as newer technologies develop, may increase even more. When you consider additional applications for this technology, the real percentage of increase over the next five years could double that increase.

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