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How Does SMS Geofencing Actually Work?

Jan 27, 2019
5 MIN READ

People use their phones 24/7 and don’t want to separate even for a second. Research by Pew Research Center has revealed that 85% of young adults in the US own a smartphone. The big trend of mobile phones has transformed the traditional way businesses did their marketing. With more technological advancement, a new marketing channel has evolved which is known as geofencing. Essentially this is a virtual fence around a geographical area defined in advance, and once a user enters this area, it triggers an action. Chances are, you have already heard about this but haven't realised it yet. This is because despite it’s relatively recent popularity as a marketing tool, geofencing has been around for much longer than you would imagine. Earlier systems used to be quite expensive and were mostly used in livestock industries to track herds of cattle through GPS, and when the herd left the predefined zone, the farmers would get an alert from the system. Now, geofencing has evolved into a unique marketing tool for industries way beyond livestock. In this article, we will learn about SMS geofencing and answer the most important question: how does SMS geofencing work?

 

What is SMS Geofencing?

Businesses use geofencing to engage their customers once they enter their geofence, a predefined geographical location, by sending relevant messages, alerts, advertisements on social media or push notifications directly to their smartphones. Geofencing is also used to monitor the area. Some businesses track and monitor activity when people enter or leave their geographic location, a mall, neighborhood, or store. In fact, some companies even use geofencing to monitor their employees, keep track of the property in the store and automate time cards.

 

So how does SMS geofencing work? This type of campaign is not used virally, although it should be. It attracts customers to your store by leveraging the power of mobile. In fact, back in 2013, a survey revealed that 47% of mobile users want their favorite retailers to send them an offer while they are nearby a retailers’ location. Yet, SMS geofencing campaigns are little-known and used but it can be a great way to boost your sales and engagement rates.

 

How Does SMS Geofencing Work?

First things first, you need to get people to subscribe to your SMS campaigns and then invite them to join your SMS geofencing list so that they allow you to track and use their location. If you are running an SMS geofencing marketing then most probably you have already established your store radius. So now that you have set your geofence and convinced people to opt-in to your texting services, you can start tracking people in the radius you have established.

When customers enter the radius, they will get a message straight to their mobile. The messages people get are usually pre-programmed. So once a person appears in your geofence, he or she gets an automatic text alert. The message will contain a special promotion or discount, or any other deal which will motivate the person to visit your store to make a purchase. When the person opts into your SMS geofencing, while in the store, you can already implement the power of texting services. Drop them a message offering them a 20% discount if they visit your store again in the next 2 or 3 days.

Every time your subscriber is in the nearby area of your store, you’ll be able to leverage the power of geo-tracking and engage customers to make a purchase.

 

Best SMS Geofencing Practices

Here are some tips on how to get the most out of your mobile geofencing:

  • Create a precise and hyper-local geofence - geofencing doesn’t work well on a big radius. It’s best to establish a radius territory that is not too far away from your store’s location. Ideally, geofencing is best executed if your set radius is small and people can reach the store within five minutes of driving.

  • Perform an A/B testing - there is one size fits all marketing campaign. However, when you are using mass SMS texting, you want to create an ad or a message that will be attractive for the most. So make sure to test different types of content and play around with your campaigns. For example, if you own a small coffee shop, you may find out that a free cup of hot drink is more engaging to people than a free croissant. Also, don’t forget to test the location of your geofencing, especially if there’s a direct competitor in the nearby place. You want to set a location that will be competitive and which won’t get mixed up with competitors’ geofence.

  • Customize as much as you can - SMS geofencing works with pre-programmed messages, and it can be hard to get creative with mass SMS texting. However, one thing you can do is to segment people into different target groups. Thus, you will be able to customize your messages based on specific categories such as age or gender.

  • Don’t fence only near your location - geofences are usually built in the nearby location of the store. Yet, this is not the only way geofencing works. You want to fish where the fish are, so create fences in places where you believe your customers are. Try to engage them as much as you can.

  • Remember about the timing - texting services don’t work until they are using the correct timing. Determine the best time to send a text message to your customers. A geofence is not just a spot on the map, but also a place in time. So before you notify your customer to take action, know that when you do it is as important as where you do it.

Geofencing gets together the physical world with the world of data and numbers. SMS geofencing enables you to enhance your store’s sales and helps your business reach its goals faster and easier.

 

Top Companies Using Geofencing

There are many ways to use geofencing. Depending on the industry you’re in, some methods might work better than others. Have a look at specific examples of smart and efficiently used geofencing strategies by these giants in different industries. These no practices might give you inspiration for designing an SMS geofencing campaign. While some of the practices rely on push notifications in apps, a similar strategy can be implemented just as efficiently through SMS geofencing.

 

Uber

One of the best examples you can think about is Uber. Of course, Uber’s entire business model is based on GPS tracking. When any user opens the app to find a driver, the app shows how many drivers are available in the geofencing area, where they are, and what’s the estimated arrival time. Uber then sends users a notification once the driver in the geofencing area is approaching. But Uber takes this a step further. If a user agrees to have the location service turned when the app is not being used, Uber will always know where its users are. As Uber has predetermined geofenced areas (for example, an airport), it will send the user a notification once you enter that area and might need a right. By doing this Uber does everything for the user automatically by a) reminding the users about the service, b) making it easier to find and meet a cab driver, and drives more sales by doing so, because people end up using the app instead of looking for a driver on their own. All this is done by utilizing geofencing the smart way.

 

ubero

 

Apple Maps

Another interesting example of putting geofencing to good use is Apple Maps. You might be aware that the app constantly tracking its users’ location. The app records their transportation habits along with the locations they go to most often. Based on this, if a user is outside of your “normal” geofenced area, the app will send a push notification (which could be an SMS notification for your purposes too) about the estimated time to arrive home, traffic, etc. The app also sends notifications about any changes from the normal route, namely, accidents, road work, any other reasons for abnormal traffic. This helps the users to adjust their timing, and look for alternate routes, which are also suggested by the app. This is why Apple Maps has turned into an industry leader, due to using geofencing in a smart way by combining it with traffic data.

 

Taco Bell

One of the biggest fast-food chains in the US also utilizes geofencing technology to leverage sales. Taco Bell has a mobile app for customers to order food from their mobile devices. This is great for those users who don’t want to or don’t have the time to wait in line at stores and drive-throughs. Taco Bell uses geofencing to take this idea to the next level. Whenever a user drives by or is close to a Taco Bell location, the app sends the user a push notification (which could be very much done through an SMS as well, if you’re looking for ideas). The notification is a simple reminder that users can order food from their phone or mobile device in advance, pay via the app, and simply pick it up. No lines, no time wasted on paying at the location. A reminder like this serves a great trigger to leverage more sales, because not all users might remember that this is an option. This Taco Bell strategy proved to be a big success: after the launch of this campaign, the company saw a 6% increase in sales. It’s clear that if used right geofencing can be very beneficial for the representatives of restaurant and fast-food industry as well.

 

Takeaway

Geofencing is an amazing opportunity to just leave behind. Start taking advantage of geofencing, if you want bigger sales for your business. The cool thing about this is that geofencing can be used in various ways, and the strategy can be tailored to your business needs. A decent SMS geofencing strategy could be the tool you need to ensure nothing is left on the table.

Following the lead of different industry giants who were successful in implementing and utilizing this tool, you too can make the most out of geofencing, if you’re smart about it. This not only has the potential to turn nearby potential customers into actual purchasers, but it also provides data on each sale and track it, which can be later used for improving your geofencing marketing strategy even further. Send your nearby customers reminders of your services, send them a reminder about special offers, based on their behavioural history with your company. There is just so much you can do with geofencing! Play around and make the most out of it.

 

Need a hand with SMS Geofencing for your campaign? Have some questions in mind? Don’t worry, we’re here to help! Textedly team believes in the importance of customer experience and aims to provide easy-to-integrate solutions for your business. Get started with Textedly’s free trial to kick-start your SMS marketing campaign.

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