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Benefits of Geofencing for Small Businesses

Abhinav Girdhar
By Abhinav Girdhar | Last Updated on February 29th, 2024 11:40 am

5 minute read.

App Builder Appy Pie: In today’s scenario smartphones have become an integral part of our lives and they never seem to leave our sides. This is simply because it makes our lives more convenient and present a prompt and efficient solution to every problem or issue that might come up. But, in addition to this, we have got to acknowledge the fact that the phones have started acting as beacons as well. This means that unique processes and features like geofencing can be leveraged by different companies to get all the location-based data which can then be sorted into meaningful insights on their targeted users. In order to make policy decisions and implementing marketing plans, it is important we understand the real-world behavior of the consumers so that you can engage the customers in a timely, relevant manner.

Geofencing lets the businesses to demarcate specific zones to collect user data, which involves dropping points on a map to create a shape, preferably a closed geometric shape like a rectangle, circle, or any polygon. This process makes sure that the company receives information on any user entering the demarcated area, even if it is just the information about his arrival or entry into the geofenced or demarcated area.

This collection of location-based data business might seem like it might be an invasion of privacy, but the whole process has only been developed under the purview and in accordance with the latest privacy laws. Geofencing or any other location-based data collection has the potential to become one of the most powerful tools for companies of any size, but the small businesses in particular can gain a lot from the technology.

How Geofencing Works?

Geofencing is a technology that brings together device-level IP address interaction with GPS data and cellular network data.

Each of our devices has its own device address, and when a device interacts with a number of other routers or hardline connections, the device address is then registered at that particular IP address and vice versa. This process in combination with the cellular devices pinging the cellphone towers at the interval of a few minutes would let the data specialists locate a device and eventually the user or a consumer for your business.

With this technology location-based services can be used to track the entry and exits of any user in the geographic area that has been set for the geofencing campaign, which in turn would trigger the alert or the advertisement or offer from you as a business or as a company to the device of the user.

Benefits of using Geofencing for Small Businesses

Now that you know fairly well how this technology works, it is time you explored all the benefits of using this technology for your business. A technology like geofencing and the allied features can bring with them a host of benefits and advantages for you, but the first step to implementing to boost up your business lies in first acknowledging the benefits and then finding the right application for your business.

1. It can help you save both time and money

This has been established in the precious little time that geofencing technology has been around. Let us try and illustrate it with the example of a takeout or food delivery business. A business like this would have a good number of drivers moving around in their own areas that have been assigned to them. Once you have activated geofencing for these areas for their corresponding drivers you would be notified whenever the drivers or the delivery boys leave their designated areas. Not only would the employees become accountable but would also ensure that they are not whiling away their time elsewhere. This means that you are aware whether your employees are justifying their payroll, saving you both, time and money.

2. It can be used to motivate the customers to spend more

This can be explained best when we use the example of a pizza joint. This means that those people who are your customers already and have already installed your app on their smartphone or any other mobile device that they are carrying on them would receive a push notification, whenever they are in the general area that the pizza joint has geofenced.

This, in fact can be adapted to or translated for any kind of business, but food industry in particular can benefit greatly from it. The café, pizza joint or the diner can send out the geofenced push notifications right around the time of breakfast, lunch, or dinner, so that more customers are reminded of their proximity to the eatery and be tempted to make a stop.

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This can also be used in the non-peak hours like mid-morning or late afternoon where the push notification can offer the passersby a special deal for their favorite cup of coffee and a bite to go with it!

However, it is important that you limit the number of push notifications that you have been sending out to your passersby. If someone is walking through or driving through the geofenced everyday on their way to and from work, you can’t possibly be asking them to step into your place of business everyday and the users might find it annoying to be notified every day. Now, we do not want our current customers to be annoyed by us or be frustrated. This can lead to them ignoring you or even uninstalling your app.

3. It is a great tool to promote brand awareness

There would always be some people who have downloaded your app, but haven’t stepped into, let’s say your diner. Though they might have been walking right through the locality where your business exists but might never have thought of stepping into your establishment. This means that though they are interested in your services, they haven’t yet spent any money on your services. With geofenced notifications, you have in your hands a chance to gently remind this set of users that your business has something to offer them. Let’s say your company is sponsoring the local children’s theatre, you can then send out notifications to all those app users who pass by the theatre, mentioning your contribution and even offer them a cool deal.

4. It is an effective tool when you want to send special offers

While it is important that you do not overdo the notifications thing and make the whole experience more of a hassle for everyone, there are ways where you can make the app users look forward to your notifications. Yes! This can happen, especially when you are delivering some kind of a value in the notification.

It has been established through research that the chances of shoppers coming back to shop with you are higher when you offer them some kind of value through coupons and in fact more than half of the respondents even said that they would not even have made the first purchase if they did not have the coupon.

5. It can help you personalize the customer experience

Personalization is the key to every business’s success and can reap in many rewards for you. When it comes to geofencing, there are big opportunities to personalize the customer experience. This means that whenever your app user would enter the area that you have geofenced for your business, the app must open to the user’s profile.

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Let us take the example of an eatery, yet again. If you have a local diner, it is imperative that you do not send out the same content and same notification to each of the users. You would not want a 20-year-old guy to receive a notification about low calorie food or food that is diabetes friendly.

Such standardized, one size fits all kind of notifications would be completely irrelevant and offer no particular value to the app user, your customer. This means that the users would find these notifications and hence your app or your business annoying and irrelevant.

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Abhinav Girdhar

Founder and CEO of Appy Pie