Research Now SSI lists the following benefits of geofencing:
- Capture real-time feedback. Who remembers a restaurant meal they had days ago or a grocery store visit you made “in the last month”? With geo-fencing, companies can trigger a few simple questions to the consumer’s smartphone as soon as they walk out of a venue. These real-time responses are fast and easy – and much more reliable than delayed data collection.
- Personalization. Neiman Marcus is testing out a geo-fencing program that alerts sales clerks when VIP customers are shopping in the store, complete with the customer’s purchase history so they can tailor their suggestions and service to the customer.
- Hyper-local offers. Paper coupons are a thing of the past (and how could anyone remember to bring them along on a shopping trip?) Now, companies can directly send promotions to a consumer’s smartphone the moment they enter a retail store. And let’s say the Home Depot customer has spent 15 minutes looking at water heaters. Why not send them a coupon to help them over the purchase decision hurdle.
- Complementary offers. Enhance the customer experience by offering a deal on a related product. For example, 1-800-Flowers geofences jewelry stores close to 1-800-Flowers shops. While a customer is at the jewelry store, a discount offer for a bouquet will pop up on their smartphone.
- Measure marketing effectiveness. If you geofence the area around an advertising campaign (billboard, direct mail, etc.) you can easily measure pre-to-post sales lift, as well as against areas that were not exposed to the marketing campaign.
- Passive data collection. Even without the overt introduction of marketing stimuli, local businesses can learn a lot from passive data collection of geofenced data, including understanding how long consumers spend in their stores, when they visit and how often they return. Adding these insights to online activity, purchase information and web browsing can deliver a good understanding of online and in-store behavior, and how they influence each other.
- Timely messaging. Geo-fencing allows businesses to provide buyers with messages and deals targeted to specific holidays or events. For example, in the days leading up to Halloween, costume shops can offer 20 percent off to nearby shoppers. Or discounts on jewelry, candy, and flowers should be coming your way just in time for Valentine’s Day!
While some individuals (and regulators) are concerned about the “Big Brother” intrusive aspect of geofencing, there are many benefits for marketers and consumers. Moreover, as long as we are careful to protect customers privacy and the security and operations of their mobile devices (see our blog on ESOMAR’s Guideline for Mobile Research), we can all benefit from this exciting new technology.