What is geofencing and how does it work?
A geofence is essentially a virtual perimeter set for a geographic boundary in the real world. The geofenced area can be set to form a radius around a certain location or to follow specific geographical outlines.
Now we know what geofence is, what is the definition of geofencing?
Geofencing is when a geofence is configured to make pre-set actions occur when its boundary is crossed. For example, a downloaded app on a mobile device might be triggered to send an app notification when a user is entering or leaving the geofenced area.
What is beaconing and how does it work?
Beaconing has a similar effect to geofencing, except that it relies on setting up small real-world devices called beacons. The beacons detect when devices come into close proximity to them.
Beaconing is where these devices send a signal to servers and initiates a pre-set trigger. For example, a person with a mobile device enters a store with a beacon set up, which then triggers a text message to be sent via the server to their phone informing them of offers or soliciting feedback regarding their location in the store.
Unlike Geofencing (which relies on GPS), beacons can identify where someone is within a specific location. For example, if they’re in the shoe department you can create a survey specific to that shoe shopping experience. Beacons also do not require an internet connection.
What are the benefits of using geofencing or beaconing?
There are many benefits to using geofencing or beaconing, but the primary advantage is being able to collect real-time feedback such as from those who don’t complete a purchase – and use it to improve the customer experience.
Traditional survey methods rely on transactional data (such as a receipt), which doesn’t allow you to target those that walked into a location without that transaction.
Let’s take a look at the benefits in more detail:
- Improve the customer experience across all journeys and touchpoints. You’re able to create a centralised source and core competency for customer intelligence for the organisation.
- Uncover real-time insights. Waiting for days/weeks to survey a customer after their interaction with the brand means the experience is less fresh in their mind. Geofencing and beaconing minimises this issue.
- Target specific audiences in certain locations, giving businesses the opportunities to collect feedback in real-time.
- Understand the drivers of non-purchases + get visibility into persistent issues that disrupt the journey for your industry.
- Improve same-store sales by leveraging insights to get a new understanding of the non-purchaser experience and break down channel silos to optimize the end-to-end buying journey.
- Reduce cost through automated workflows.
- Build customer audiences around specific areas, such as your store locations, competitors’ locations, events or trade shows, and more.
- Offer a more tailored customer experience to your existing audience.
- Expand your marketing and social media reach for advertising to new customers within specific regions.
- Increase customer loyalty by offering tailored promotions.
- Optimize your understanding of customers’ habits in-location.
- Engage your audience further with targeted assistance.
Geofencing versus beaconing
Both methods can help businesses get real-time feedback about why people are in a location and how they found the experience. Did they get what they were looking for? Did they need help? Why did they leave without purchasing something? However, geofencing provides flexibility that beaconing can’t because it’s all done virtually.
Geofences don’t require hardware, beacons do.
For example, in 2018, Burger King set their app to offer their Whopper burger for a penny – if customers downloaded their app and opened it within 600 feet of a McDonald’s. The geofence trigger occurred when the app was downloaded in the real-world areas around McDonald’s branches.
As beacons are physical devices, this campaign would not have worked with beaconing, as Burger King doesn’t have control over its rival’s physical locations. Geofencing possibilities are endless – but beacons are limited to physical spaces you have access to.
However, it is possible to get more granular with beacons, to the point, it is possible to pinpoint where someone was specifically within a store, as well as uncover even more robust operational data on how the consumer moved around the store.
Geofencing and beaconing versus traditional methods
It’s also cheaper compared to other means of data collection. The only other (known) way to get real-time, solicited non-purchaser insights today is by people surveying visitors as they leave a location, which is costly and subject to bias.
How geofencing and beaconing is used to improve customer experience
There are many uses for geofencing and beaconing, but one of the main benefits is that businesses can collect feedback from customers and use those real-time insights to improve the customer experience. When customers feel as though a brand is tailoring their experience to them – rather than applying a blanket approach – they’re more likely to engage with your products and service, return again and buy more.
Geofencing and beaconing help you to understand the aggregate sentiment and the themes/drivers behind it, with an ability to then drill down into locations and channels, etc. when there is a specific need to do so.
Whilst collecting feedback through geofencing and beaconing is useful, the real benefit lies in the actions that it allows you to take to better meet customer needs.
Below are a few examples of how geofencing and beaconing can tailor experiences, engage audiences, and foster loyalty.
Geofencing and beaconing in retail stores and restaurants
The possibilities for using geofencing and beaconing in-store and within restaurants are nearly endless. But where they really come in useful is for collecting feedback so you can understand the key drivers of non-purchase behaviour and dissatisfaction – and take steps to address them.
If you’re a manager of a physical location – whether that be a retail store or restaurant – here’s what you can expect this technology to help you with:
- Better understand non-purchaser intent, the holy grail for retailers. Find out what your audience wants, so you can meet those needs
- Optimize order preparation time by alerting staff when customers are within a particular distance of the store.
- Send in-store guides to find specific products they’ve been searching for on your app.
- Understand how long customers are spending or waiting for in-store or in-restaurant.
- Wait times and speed of service are critical for guest satisfaction in restaurants
- Alert customers to current offers or new items on the menu
- Collect feedback from diners – whether they use pick-up windows, drive-thru, or delivery. Each of these experiences differs, so being able to collect feedback on each of these micro-customer journeys is extremely helpful as it allows you to better personalize them.
- Reduce wait times – in restaurants where a walk-in queue is operated, allow customers to sign up for the virtual queue once within a certain distance.
Geofencing for social networks
Social media is a key tool for managing brand perception and for marketing your products and services. Using geofencing can help make your social media efforts more targeted – and provide more tailored customer experiences.
With the geofencing setup, users could:
- Download brand-based social media filters if they visit specific locations.
- Receive social media ads to visit specific stores nearby.
- Receive your brand’s social media advertising when they visit your competitor’s stores.
Geofencing for marketing
Geofencing allows you to narrow down your potential customers to the people visiting a specific geographic area.
Adapting geofencing into your marketing can be an effective tool not only for increasing sales but for improving the experience your customers have with your brand. As well as the social media suggestions above, you could use geofencing in your marketing to:
- send customers rewards for trying items in particular stores
- offer promotions for certain locations or on certain parts of the location
- ask for customer feedback on particular store experiences
- reach potential customers located in certain areas
How to geofence a location
Geofencing a location is usually specific to each platform that you are using, but below are some suggestions for how to set up geofencing on popular customer channels.
Mobile app-based geofencing
For this approach, you’ll need to develop an app with virtual boundaries set up in software-enabled with GPS or RFID technology. The app will need to be coded with geofencing capabilities to outline your stores or particular locations as virtual boundaries. This way, when a user downloads the app, it will automatically send app notifications, text messages, or other triggered events when the user enters or leaves the geofenced area.
Geofencing on Facebook
When setting up adverts on Facebook, you have the option to set up a geofence around a location up to a one-mile radius. There is no option to set up specific boundaries, only a circular geofence. However, you can target each campaign to a different location and narrow it down to a more specific area within one mile if you wish. You can also exclude certain locations from your geofenced area.
Geofencing on Instagram
Instagram offers a geofenced area in a polygon shape, allowing you to select the precise area in which you’d like to set up a virtual boundary. You can also exclude areas. An additional feature is live geotagging when a temporary geofence is set up around a live event. When users post a picture at the event, you can send notifications to that user’s connections located close by to advertise the event.
Geofencing on Twitter
Twitter allows you to choose more than one location for your geofencing, and better still, you can target areas as small as neighbourhoods all the way up to entire countries. To narrow your marketing campaigns down further, you can select an audience that speaks a specific language within your geofenced area, meaning that you can target certain language speakers in that region. This might be useful if you’re an English-speaking business advertising in a non-English-speaking country, for example.
Geofencing on Snapchat
Snapchat offers two options for geofencing-based advertising: main story adverts, or snap adverts. It also offers geo-filters, which are filters only available within specific areas. These can be branded to your business’ style and tailored for your marketing aim.
Geofencing best practices
Even if you’ve set up your mobile app or your social media geofences, your work isn’t done. Geofencing requires constant revision and evaluation to make it the most effective it can be.
Here are some best practice guidelines for collecting feedback using geofencing:
Make sure you’ve set up the right size geofence
Your geofence will ideally be quite small, with a narrow radius around the area you wish to target. For example, if you’re asking non-purchasers of a retail store what you could have done better or what they intended to achieve from their visit, collecting their feedback is really important – but hearing from customers who went to the store next door is not so much. You want your insights to be as accurate as possible
Understand audience needs and set up your geofencing activity accordingly
How you communicate to your audience using geofencing could be the difference between a successful program, or not. If a person goes into a restaurant, it’s more than likely they will purchase. However, in retail, a “non-purchaser” is far more common, and so questions that look into why they didn’t purchase are more helpful in this scenario than for a restaurant. In comparison, you’re far more likely to enable customers to join a virtual queue (should that be your policy) or understand how they felt about your new menu for a restaurant.
Your text messages, app notifications, and what you ask your customers need to be as tailored as possible to maximise engagement.
That means what you ask when you ask it and how you ask it are all industry, and business, specific. By taking a targeted approach you’ll be in a far better position to collect valuable insights you can act on.
The same applies to businesses using geofencing as part of their marketing strategy. It’s no good sending a promotion via social media advertising for a brand based in another country with high shipping rates, for example. Even if they speak the same language and are interested in what you do, it might be better to send offers to those closer to home who haven’t become customers yet but might be interested.
Be clear, concise in your communications – and make sure they’re on-brand
Whether you’re using geofencing to improve the customer experience, or for marketing purposes, make sure your notifications are to the point and clear in what you want people to do. For example, if you want to find out the key drivers of incomplete purchases, make it easy for them to answer – you might want to pre-populate some options and provide an option for them to expand.
The personalised, real-time nature of geolocation triggers means it is a unique engagement opportunity for your brand. As such, this should feel like your brand is engaging directly with the customer, not a 3rd party intermediary. Customers will be much more likely to engage if they feel like they’re talking to you, and that their voice will be heard.
Send the right data to the right teams
Provide insights and reporting to multiple stakeholders, such as CEO and operational entities, with data spanning across touchpoints. By giving access to these insights in one platform to multiple teams, they’re able to take accountability for issues and get them rectified quickly. For example, if someone walked out of the store because the queue was too big, this is vital information for the retail manager to immediately ensure that customers are seen too quickly
Take action on your data
Once geofencing is part of your campaign and you’re successfully collecting feedback from your customers, the next step is to act on your insights. Geofencing provides you with real-time feedback so you’re able to fix issues as they surface, uncover opportunities and get ahead of deeper, underlying trends that might cause trouble down the line – such as substantial lost revenue. Get into a rhythm of making changes every day, however small, so your customers can see that you’re taking a proactive approach to improve their experience.
Many businesses lack a real-time, early warning system for new issues impacting revenue or experiences – geofencing helps to provide that by gathering insights from your audience on the ground.
As you take action, analyse the impact of your changes. What worked? What resulted in increased same-store sales, and what turned customers away? Are you seeing an increase in new customers? Is satisfaction increasing? Reviewing the impact of your actions is how you’ll continue to improve the customer experience, increase revenue (same-store sales), and reduce costs through automated workflows.
Implement automated workflows, prioritise key issues
The real-time nature of geolocation creates an expectation that issues will be acted upon in real-time. Create automated workflows to close gaps in real-time, such as providing service recovery to end-users.