A lot of businesses today have built mobile apps to interact with their customers. Mobile apps offer an invaluable resource to companies – user location. Many companies are now looking to exploit this resource to gain an edge over competitors. Geofencing is one such tool that makes use of customer location. With geofencing, companies can demarcate specific areas around the town and trigger actions based on when a customer enter, roams around or exits an area. These areas can be a store, a public space, or even an area in the competitor’s premises. Further, we look at potential opportunities and concerns around implementing geofencing in your business app.

Benefits of Geofencing

Increasing Sales

Geofencing can help bring customers from door to shopping aisles by sending customized invites when a person is near the store. These invites make sure that interested customers are pulled to your stores to achieve higher conversions. Pennsylvania based clothing company, American Eagles, used geofencing to attract customers. The company saw a considerable increase in sales after the geofencing project.

Building Customer Loyalty

Customers appreciate the attention paid to them by companies. Geofencing applications can improve the customer-company relationship by helping firms know the needs of a customer before she approaches the business. For instance, commuters stranded on airports or railway stations due to delays will feel so much better if they are notified of a nearby hotel accommodation or a taxi service.

Expanding Promotion Outreach

Sending out promotions to an enormously large mailing list qualifies as spam. Instead, identifying the users who are likely to take advantage of a promotional offer and then sending out targeted campaigns will bring out genuine customers. A festive sale campaign at a store will be effective only if delivered to a user base around the store. Users who are far away from the store are not likely to commute to the sale. This way we can make promotions more effective.

Getting Feedback

Feedbacks are the final, albeit essential part of a sale. They help businesses improve over time with inputs from the user base. Feedback forms can be delivered to users after exiting a store, using geofencing. Different forms can be sent depending on whether the user bought something or not. This feedback can help retailers identify which factors are hindering sales and which ones are helping it.

Tracking Competitors

While this may not come intuitively as something that can be done, geofencing has potential to track your competitors to your advantage. Companies can geofence the stores of your competitors on the map and then check for any of your customers visiting the competitor’s store. Businesses can then supply those users with better promotions to lure them back into their stores.

Concerns around Geofencing

Concerns have been raised around the privacy of using and storing user’s location data. However, a well-drafted privacy policy can take care of such matters. Furthermore, while geofencing your competitors, you anyway have to mention that you have geofenced places apart from that you operate. Striking the correct balance between accuracy and usability is vital in geofencing applications to judiciously use power from the user’s device. High accuracy GPS applications can significantly affect battery-life of user’s device.