Stand by me: how to profit from geofencing

14 February 2017 • 3 min read
Stand by me: how to profit from geofencing
Andrii Horiachko
Written by Andrii Horiachko
Co-Founder and CTO at Softermii

Imagine that you are on a business trip in a city that you don’t really know well. What you know for sure, however, is that you’re starving after a long trip. You check in to the hotel and suddenly get a notification from the nearest Domino’s. Chances that you are going to have pizza for supper?

53%, according to marketers. via SocialMediaToday reports exactly this rate of transactions after getting such a notification. Moreover, half of them is reported to be totally unplanned. As you can see in a Domino’s case study, one has chances to attract at least 30 customers in several days.


How it works and how it doesn’t

Geofencing is another modern way for business to literally stand by its customers. As the examples show, this technology lets you send push notifications to audience in a specific location. This location may either be a circle around a specific point or an area of some pre-defined shapes or borders.

Technically, geofences work as part of your app which runs in the background. You define the coordinates of fences and hard-code them into an app. App users get trigger notifications once they enter or exit the geofence.

Apps rely on different technologies in spotting this change of location. They get data from cell towers, through a wireless connection, RFID and sometimes even GPS. However, the latter may wear user’s battery out. Generally, most of the apps work on the basis of WiFi. So, the magic won’t happen if WiFi is turned off on your customer’s phone.


How it is profitable

Clearly, the new trend is especially useful for location-based businesses and services that work with travelers. Typical examples are shops offering temporary deals, restaurants notifying about their specials, and large-scale events using notifications to guide you through the location and occasionally offer something. Still, geofencing is rich in opportunities aside from these.

1. Loyalty. Geofencing may foster loyalty as part of the service: for example, app users can be notified about the exact time of product delivery to their location. It is useful to real estate services that can now invite customers to inspect the open property when they pass by.

2. Collecting feedback. The request to rate your place or service when customers leave the location may be quite timely and relevant.

3. Competitor research. If you gather a lot of data about your audience, you can track your customers within your competitors’ reach.

4. Safety. A well-known case is YikYak, a messaging app that started to block the users automatically within the school territory to prevent bullying.


Our experience

We’ve built an Android/iOS app called Floorwatch to improve shopping experience with the help of geofencing. With this app, there are no more issues with lack of attention: users can choose a particular shop in their area and contact its consultant directly once they enter the shop geofence. This way, end users always know where to go; they never have to queue up for attention. At the same time, the shops profit from being visible and building positive relationships with their visitors.


Best practices

Radius. It is recommended to set up your geofence over no more than 100 meters in cities and 300-500 meters in the countryside. If you want to track several zones, make sure they don’t overlap and there is at least 300 meters between them.

Relevance. Be careful when using geofence for advertisement. Though the times when location tracking was regarded as something seriously disturbing are long gone, it is still a step into the private territory. Consequently, an incentive is always expected to be given, and this incentive should be relevant. Welcome users to the shop by a limited offer, invite them for a free cup of coffee when they leave the area and so on, but never show up on the screen just for the sake of showing up.

Integration with CRM. The feature becomes particularly useful when it works together with additional targeting or helps collect data. For example, event managers may track online interactions made on the venue and get valuable insights into user engagement.

Timeliness. Be the first to use the trend, or others will over-use it before you. Luckily, we are ready to help you with this: the feature may be implemented in a matter of days.

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