What-is-Geofencing-Heres-Everything-You-Need-to-Know
Ever feel like your phone knows you too well! One minute you’re walking past a café and then suddenly you receive a notification for a discount on your next coffee? That’s not your phone listening to you but —it’s geofencing marketing in action. This location-based strategy helps businesses connect with potential customers at the right place and time, making their marketing efforts more relevant and impactful.
But what exactly is geofencing, how does it work and how can small businesses use it to their advantage? Let’s break it all down.
What is Geofencing?
Geofencing is a digital marketing technique that uses GPS, Wi-Fi, Radio-frequency identification or cellular data to create virtual boundaries around a specific geographic area. When a customer enters or exits that area with their smartphone, businesses can trigger targeted ads.
Think of it like a virtual fence surrounding a location, whether it’s your store, a competitor’s business, or a high-traffic area like a shopping centre. When a potential customer steps inside that ‘fence’, your marketing message is triggered, helping you connect with them in real time.
How Does Geofencing Work?
Geofencing operates in a few simple steps:
- Setting Up a Virtual Boundary – Businesses define a specific geographic area (e.g., 500 metres around their store) using mapping software.
- Tracking Mobile Devices – When a customer with a GPS-enabled smartphone enters the defined area, geofencing technology detects their presence.
- Engagement & Conversion – Customers receive the ad n real time, increasing the chances they’ll visit the store, take advantage of a promotion or interact with the brand online.
Benefits of Geofencing Marketing
Geofencing offers several advantages for businesses of all sizes, particularly small businesses looking for cost-effective ways to reach customers. Here are some key benefits:
1. Precision Targeting for New Customers
Unlike traditional ads that cast a wide net, geofencing enables businesses to target potential customers who are physically near their location. This is particularly powerful for reaching individuals who may not have previously considered your brand or service. By setting up a virtual boundary around specific areas—such as competitor locations, shopping centres, or event venues—you can deliver highly relevant ads to people in real time. This approach not only increases brand awareness but also encourages immediate engagement, making it more likely that new customers will explore your offerings.
2. Sequential retargeting
Geofencing enables sequential retargeting, allowing you to deliver ads in a strategic sequence based on user behaviour. For example, if a customer has already seen Ad 1 while in Location A, you can follow up with Ad 2, featuring a more compelling message to drive action. Since they’re already familiar with your brand from the first ad, the second ad can focus on a stronger call to action—whether that’s a limited-time offer, a customer testimonial, or an exclusive incentive—maximising the chances of conversion.’
3. Better Customer Engagement
People are more likely to engage with marketing messages that are relevant to their current location. Geofencing ensures businesses reach customers at the right moment, making the interaction more meaningful.
4. Competitive Advantage
Want to attract customers from a competitor? Geofencing can be used around a rival business to offer better deals or incentives, persuading customers to choose your brand instead.
5. Data-Driven Insights
Geofencing tools provide valuable data on customer behaviour, including how often they visit a location, how long they stay, and what types of promotions work best. This helps businesses refine their marketing strategies over time.
How Can Small Businesses Use Geofencing?
Geofencing isn’t just for big corporations—small businesses can leverage it too. Here are a few practical ways to use geofencing:
1. Retail Stores & Boutiques
Local shops can set up geofences around their physical locations to send discounts or promotions to nearby shoppers, encouraging them to step inside.
2. Cafés & Restaurants
Food businesses can use geofencing to target potential customers around busy office buildings or event venues, offering lunchtime specials or happy hour deals.
3. Service-Based Businesses
Hair salons, spas or fitness centres can attract passersby with exclusive first-time customer discounts.
4. Real Estate Agents
Agents can set up geofences around property listings and send alerts to potential buyers when they are in the area, offering virtual tours or appointment bookings.
5. Local Events & Markets
Businesses participating in pop-up markets, fairs, or expos can use geofencing to attract nearby attendees to their stalls with special deals or competitions.
Best Practices for Geofencing Marketing
While geofencing can be highly effective, it needs to be used strategically. Here are some best practices to ensure success:
1. Keep Your Messages Relevant
Make sure your notifications and ads are valuable to customers. Offering a discount, exclusive deal, or helpful information increases the likelihood of engagement.
2. Avoid Overloading Users
Sending too many notifications can feel intrusive. Stick to well-timed messages that add value rather than spamming potential customers.
3. Use Compelling Calls-to-Action (CTAs)
A strong CTA encourages customers to take immediate action. Phrases like “Claim Your 10% Discount Now” or “Visit Us Today for a Free Gift” are more effective than generic messages.
4. Ensure a Smooth User Experience
Make sure your website, app, or landing pages are mobile-friendly. If a customer clicks a notification and encounters a slow or confusing webpage, they may lose interest.
5. Test & Optimise Regularly
Use analytics to track engagement and make adjustments based on what works best. Experimenting with different messages, locations, and offers can help fine-tune your geofencing strategy.
Is Geofencing Right for Your Business?
Geofencing is a powerful tool for businesses looking to increase foot traffic, improve customer engagement, and gain a competitive edge. However, like any marketing strategy, it requires proper planning and execution.
If your business relies on local customers and in-person visits, geofencing could be a game-changer. By targeting potential customers when they’re most likely to take action, you can make your marketing efforts more effective and measurable.
Ready to try geofencing for your business? Start small, experiment with different approaches, and refine your strategy based on customer response. With the right execution, geofencing can help you connect with your audience in ways that feel natural, timely and highly relevant.
