#3 Geofencing Your Passionate Customers with the “G” Train

Of all of the blog posts in this series, this one might may be the most interesting, even beyond artificial intelligence.  It is a about a technology, you may have suspected was being used, but did not know exactly what it was.  That feeling you had when you wondered how your smartphone knew where you were.  That technology is called geofencing and it can be used to bring customers to your coffee shop.

Goefencing is like having a virtual fence around your coffee shop and allows you to target customers on their smartphones when they enter a defined area, similar to a spider waiting for an insect to fall or fly into its web.  It can be thought of as a reminder, that while you are in the area, there is a coffee shop where you can get a delicious coffee drink.

This technology is transforming the way businesses, including your coffee shop, connects with customers.  It is akin to taking the digital gloves off.  Using this technology, as described above, you can influence those walking by with an irresistible offer on a cappuccino or remind nearby workers that it is time for an afternoon coffee break.  You can even geofence your competitors by offering a better deal when customers are located at the competition.

If you are ready to learn more about geofencing and how it can help your business, this post is for you.

Geofencing Strategies for Coffee Shops

Before you can excel in your geofencing efforts, you need to have a strategy.  Two of the strategies were touched on in the introdction as far as location.  But you also need to know who to target.  Below are some of the geofencing strategies in more detail, though, you are really only limited by your imagination.

Target Customers Near Your Shop

This is the most obvious strategy and is the process of targeting people who are near to your location.  It is the most often used strategy by businesses large and small.  To envision it, imagine someone walking by your shop, phone in hand, and they get a notification: “Feeling sluggish?  Grab a 15% discount on any latte at [Your Coffee Shop Name]!”  Suddenly, that afternoon slump does not seem so bad, and they (your customers) are walking through your door.  Using this tactic, you can take advantage of impulsive coffee cravings and get more customers and business.

Targeting Customers Near Competitor Locations

This is the poaching strategy in geofencing.  Let’s say there is a large chain coffee shop a few blocks away.  You set up a geofence around their location and then offer a special deal to lure their customers away with a message of “Skip the line and get a free pastry with your coffee at [Your Coffee Shop Name]!”  It is a clever strategy, and while you might hestitate, ethically, your competition, if they are a national chain, may already be doing it to you.

Target Customers at Local Events

Local events, such as Farmer’s markets, concerts, and festivals are all hotspots for potential customers.  For instance, somebody at a weekend market in the summer, might be influenced with a notification about an iced coffee at your shop.  People attending local events might be from other places and using geofencing allows you to get new customers and widen your overall audience.

Types of Geofencing Campaigns

• Offer a Discount for First-time Customers: If someone is near your coffee shop, you have their phone buzz with a notification of: “Welcome to [Your Coffee Shop Name]!  Enjoy 20% off your first order.”  The discount might be enough to get the person to try your coffee and pastries.  Think of it as a warm invitation to step inside and experience your shop.
• Promoting a New Product: If you have just introduced a new product, for instance, a pumpkin spice latte or an iced tea, you can use geofencing to let the world know.  Some walking or parking near your store could get a notification of: “Introducing our new Caramel Apple Cider! Perfect for a cozy fall day.  Get yours today at [Your Coffee Shop Name]!”
• Blocking the Viewing of a Sporting Event: In some cases, geofencing can be used to keep users from viewing an event.  An example is football or basketball games.  In the local markets of the teams involved, viewing of the game may be blocked, to get people to attend the game in person.

How to Set Up a Geofencing Campaign

Below are what is needed to have a successful geofencing campaign.

• Define Your Target Audience: Like all of the marketing methods, you need to first determine who it is you are trying to reach.  Are you aiming for students, office workers, or attendees of a local event?  You could target everybody within a certain radius of your coffee shop, but then you would not be able to tailor your message in a meaningful way.  Once you know the who, you can then compose your message for them.  The more specific, the better, and more effective your campaign will be.
• Choose the Location and Geofence Radius: Next you need to choose your location and the size of the fence.  A small radius (500 feet) might be good for the area around your shop, while a larger radius (1,000 feet) might be better for a wider area.  It is like choosing the right size for your coffee cups.  Some of the things to consider in choosing your radius include:
  • Location Density: In a densely packed city or a convention center, a small radius that covers a block or a block of conference rooms, may be enough since everybody is together.  However, in a more sprawling area, you may need a larger radius to reach the same number of people.
  • Habits of Your Target Audience: Is your audience within walking distance of your shop or do they drive to get where they are going?  For example, office workers may be in a small area, whereas event attendees may be more spread out.  Timing is important, too.
  • The Objective of the Campaign: What are you hoping to achieve?  If you are looking for immediate foot traffic, a small radius around your shop would be most effective.  However, promoting a new product or building brand awareness would take a larger area.
  • Your Budget: Larger geofences cost more to maintain.  Factor in your budget constraints when determining the optimal radius.
• Put Together Your Ad Copy: Your copy needs to make a good first impression.  As with your landing page, keep it concise, interesting, and relevant to the audience being targeted.  Stress your unique selling points, offer a tempting discount, or create a feeling of urgency, and include your website address.  It is important to note that you only have a few seconds to capture their attention.  Some things to think about in producing effective ad copy are:
  • Keep it Brief: People are constantly being flooded with information.  Because of this, you want to keep the copy concise and to the point.  Emphasize the selling points and leave them wanting more, so they come to your shop.
  • Be Irresistible: What makes your coffee shop special?  Is it your ethically sourced beans, your cozy atmosphere, or your award winning baristas?  Show your redeeming features and make them stand out.
  • Offer Value: Have an offer your customers cannot refuse.  This can include a discount, free pastry, or an outstanding loyalty program.
  • Let’s Get on with It!: Include a phrase like “Limited Time Offer!” or “Today only!”  These phrases on your ad prompt customers to act quickly so they can get the last slice of cake.
  • Include a Call to Action: Always tell customers what you want them to do.  It can be “Visit us Today!” or “Order online now!” Make it clear and be to have a call to action.
• Use the Right Geofencing Platform: There are a number of geofencing platforms available, each having their own strengths and weaknesses.  Some of the more popular options are Google Ads and Facebook Ads, but there are also more specialized platforms around.  Be sure to research the options to choose the best one for your budget.  Some details on each are below.
  • Google Ads: Google allows you to create location-based campaigns that target customers within specific radii around your coffee shop or another location.  Being integrated with other Google assets, such as Google Services and Google My Business, makes it a powerful tool.
  • Facebook Ads: Facebook has a vast user base and granular targeting options that can provide a platform for geofencing.  Facebook’s detailed user data can be used to target specific demographics and interests within your chosen geofences.  For instance, you could think about targeting those who have expressed an interest in coffee or local events.
  • Specialized Geofencing Platforms: There are a number of more specialized platforms that cater to location-based marketing.  These platforms often offer advanced features beyond Google and Facebook including real-time tracking, detailed analytics, and integration with other marketing tools.
  • With any of the platforms, the right one depends on your specific needs, budget, and technical expertise.  Factors to consider in your choice, are ease of use, targeting options, analytics capabilities, and pricing models.  It is like selecting the right coffee beans.

Measuring the Success of Your Geofencing Campaign

As with all of the marketing methods, you need to track the statistics to see how the campaign is doing and look for places to optimize.  This can be thought of as a taste test.  You are analyzing the flavors, aroma, and overall experience to determine what needs to be adjusted.  With geofencing, some of the metrics to look at include:

• Website Traffic and Conversions: You hopefully included a call to action to direct users to your website, did you not?  Well, if you did, monitor your website traffic and conversions.  See if there is an increase in visits from your targeted geofence areas(s).  Are people placing online orders after receiving your geofence notification?  Be sure to use your favored analytics application to get this information.
• Monitor In-store Visits and Sales: Are you seeing more foot traffic in your coffee shop as compared to before launching your geofencing campaign?  Are the geofence influenced customers making purchases?  You can track where your customers came from by offering special discounts of promo codes that are unique to your geofencing campaign.  More directly, you can ask the customers how they heard about your shop.
• Analyze Customer Engagement: Watch how your customers are interacting with the geofencing notifications.  Are they clicking ads?  Are they redeeming the offers?  Knowing their activity can lead you to what resonates with your audience and help to refine your messaging.

Best Practices for Geofencing

When you go about geofencing, it is not just about setting up your virtual fence.  You also need to do it ethically and take out the creepy factor by being respectful of your customer’s privacy and preferences.  Generally there are two ways to do the geofence.  One way is to have an app dedicated to the yur business, in which ads are served to already known customers.  The second way to serve ads via third party social media and other apps.  Here are a few principles to guide you using either way:

• Get Permission from Customers Before Tracking their Location: Obtain explicit consent before tracking a customer’s location when using your dedicated app.  Be transparent about how you will use their data and offer a clear opt-in option, while having the default be an opt-out.  This step helps you build trust among your customers and ensures you are not crossing any ethical boundaries.
• Use Geofencing Ethically and Responsibly: When using a third-party and even your own app, avoid bombarding customers with excessive notifications or tracking their location without a clear purpose.  Use geofencing strategically and respectfully to enhance their experience, and do not freak them out.
• A/B Test Different Geofencing Campaigns: Do not be afraid to experiment with different variants of a campaign.  Use varying ad copy, offers, and/or geofence radii to see what works best.  Using the data obtained, you can then refine your strategy and optmize for success.

Examples of Successful Geofencing Campaigns

Remember, when I said your competitors may be already using geofencing?  Well, here are some examples of geofencing campaigns that have been done by some of the larger businesses.  You can do the same with your local coffee shop, by understanding your audience, having good messaging, and leveraging the right technology.  Here are the details of what the national chains are doing:

• The North Face: The North Face has used social media feeds to distribute ads about their apparel.  For instance, when somebody passes a billboard for The North Face, they show a targeted ad on your social media about the latest urban apparel.  When a viewer clicks on the ad, it leads them to a dedicated landing page featuring a curated selection of jackets, backpacks, and accessories.
• Whole Foods Market: Whole Foods Market uses a geofence around their stores to show limited time offers on organic produce and sustainable seafood.  The ad directs the users to a landing page with recipes, nutritional information, and convenient options to place online order or pick-up in the store.
• Sephora: In this case, somebody who is into beauty products is near a Sephora store and looks at their Instagram feed.  When they are in the proximity of the store (within the geofence), a post is triggered showing the latest makeup trends and exclusive product launches.  Clicking on the post takes the user to a landing page with tutorials, product reviews, and an online shopping experience.

How Much Does Geofencing Cost?

There are number of factors that influence the cost of geofencing.  These include:

• The Chosen Platform: The platform you choose (Google Ads, Facebook Ads, or the specialized platforms) will have different pricing models.  Some may charge per impression, others per click, and some might have a monthly subscription fee.
• Your Target Audience: The size and specificity of the target audience can affect the cost.  A broader audience might cost more to reach, while a niche audience might require more precise targeting and therefore a higher cost-per-click.
• The Geofence Radius: The size of the geofence plays a role.  Larger geofences might reach more people, but also cost more.
• The Duration of the Campaign: The length of your campaign will naturally impact the overall cost.  Longer campaigns will generally incur higher expenses.
• The Complexity of the Copy: The quality and complexity of your ad creatives (text, images, videos) can influence the cost, mainly based on whether you can do it yourself or need a professional.

Conclusion

To conclude, it needs to be reiterated that geofencing is no longer a futuristic concept, it is here and is being used.  It is a tangible tool that can be used, even by a local coffee shop to allow you to connect with customers in a hyperlocal and personalized way; driving foot traffic, boosting sales, and building loyalty.  Geofencing can be thought of as a single ingredient that can be used along with the other marketing methods to make your secret marketing sauce.

A key takeaway, is that geofencing, while having the wow-wee factor, is not a magic bullet, and requires the same planning as with all of the other marketing methods.  That is, you still need to know your target audience, be able to nail the message, and measure your results diligently.

*I want to acknowledge the help of Jim Hale, a fellow WebHead and geofencing expert, who reviewed this post.