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What is Geofencing? How to Effectively Use Geofences

by Brenna Dilger, on August 30, 2022

Where is your audience going and how often are they going there? Which stores or locations do your customers prefer and which ones do they avoid? What are peak times and seasons for areas of interest? Getting answers to these questions is just the tip of the iceberg when it comes to the wealth of information that geofence data can provide for organizations. 

Geofencing is an incredibly powerful strategy that can be used to improve marketing and sales, customer experience, security and safety, and the overall performance of any organization. Knowing the comings and goings of your audience can help you make better predictions, negotiations, and decisions. In this quick guide, we’ll explain what geofencing is, how your organization can use it to improve a variety of areas, and how you can obtain the geofence data you need to succeed.

What is geofencing?

A geofence is a virtual parameter of a real-world geographical area. A geofence can be a predefined set of boundaries, such as a county, or it can be a radius around a particular location, such as the surrounding area of a store. For instance, you might choose to put a geofence around Los Angeles County to track who commutes in and out of that area. Or you might track the one-mile radius of a particular Starbucks location to see how long customers spend in that store and how often they visit the neighboring businesses. 

“Geofencing” usually refers to a location-based service that uses GPS or RFID technology to create a virtual barrier around a particular area. When a user crosses this barrier, they trigger an alert that can be sent to their device, email, or a third-party system. The location data generated from users entering and exiting a geofence area can be used to improve a variety of organizational functions, such as security, planning, marketing, customer experience, and more.

What kind of data does geofencing generate?

Data generated from geofences is created from two location components - the location of the point of interest or the area that is fenced, and the location of the device that interacts with the fence. Generally, devices that move in and out of geofences are mobile devices that calculate their own locations using GPS, Wi-Fi, cell towers, or Beacons. The virtual barrier that surrounds the real-life location of interest is generated in a software-based geographical information system (GIS). 

By collecting the location data that is generated from those two components and analyzing it, companies can identify and target common behaviors for mobile devices that interact with a geofence and take corresponding actions. This can be useful for a wide range of initiatives.

How companies can use geofencing 

Location-based marketing 

Businesses can more effectively reach their target audience when they know where their audience is, where they have been, and where they are going. With geofence data, companies can better understand customer behavior and how customers interact with their products or services. This deeper understanding of your audience’s day-to-day movement leads to more precise targeted notifications and messaging, allowing your customers to receive location-specific deals, promotions, and reminders.

For instance, if you are a coffee bean supplier and you can see that your customers are passing the same coffee shop every day, you might partner with that coffee shop to carry your coffee beans, maximizing the chance that your customers will find their favorite coffee in a conveniently located shop. Additionally, you might send your customers a notification when they pass that coffee shop that lets them know they can buy two bags of their favorite coffee for the price of one if they patronize that coffee shop. In this scenario, the customer gets a great deal on coffee they already love, and your business and the coffee shop you’ve partnered with make successful sales.

Burger King made clever use of mobile geofencing when they rolled out a "Whopper Detour" in 2018. Smartphone users who went within 600 feet of most McDonald’s locations were given a promotion that allowed them to order a Burger King Whopper sandwich for a penny from the Burger King app. After placing their one-cent burger order, customers were navigated away from McDonald's and toward the nearest Burger King to pick up their food. They were able to employ this genius marketing strategy because of location data and setting up geofences around McDonald's establishments. 

Location data-gathering

Geofence data helps greatly when it comes to marketing attribution. “Attribution” is the practice of evaluating the marketing touchpoints a consumer encounters on their path to purchase. The goal of attribution is to determine which channels and messages had the greatest impact on a customer’s decision to convert or to take the steps toward conversion. 

Using this data, advertisers are able to correlate actions with ad-campaign exposure at scale. For instance, you might be able to determine that 50% of the devices who were exposed to your billboard advertisement on their work commute visited your brick-and-mortar location within a week. That helps you analyze the effectiveness of your advertisement and adjust your marketing efforts accordingly.

App personalization 

The success of an app and the rate of an app’s engagement is heavily dependent on personalization. Most apps are tailored to an individual user in order to provide the best possible experience. Understanding device location, movements and surroundings is one of the most important components to providing a relevant user experience. Geofencing helps tailor app experience to the frequented locations of a device, enabling users to receive the most relevant content and sort results based on where they are, where they have been, and where they are likely to go. This leads to more app engagement, a better customer experience, higher conversions, and increased customer loyalty.

Site-planning 

Geofencing data can also be used to plan for store locations, conference locations, and event locations. If you can see where most of your audience is traveling to and from every day, you can see which areas they are most likely to gather in, shop in, dine in, etc. You might notice that a large chunk of your customer base frequents a particular mall and decide to open a brick-and-mortar location in that mall. Or you might plan a pop-up shop or event for a time period when your customers are most likely to walk by, such as when they are usually on their lunch breaks or when they are usually leaving work. Analyzing this data can help plan more strategically, reduce wasted spend, and increase revenue. 

Get geofence data with Buyer Studio

Using Narrative’s self-service app Buyer Studio, it’s fast and easy to buy the exact geofence data that you need. Simply determine the geographic regions that best serve your use case and set completely customized geofences in your data order. There is no limit to the amount of geofences that you can create for your data purchases, giving you the freedom to explore and analyze as many fine-tuned regions as you need to.

Buyer Studio is cutting-edge software that makes it possible to filter and buy customized datasets in as little as one minute. You won’t need data engineers or legal teams because everything is automated and regulated for you. It’s as easy and pointing and clicking through an array of datasets from multiple data providers. You can ingest all of the data you need from multiple providers at once, with your custom data package delivered to your preferred endpoint within hours. 

Find the custom geofence data you need today. Our team is here to help you get started. 

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