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SMS Geofencing: What Is It and How Can You Use It?

If you run a business that relies on local trade, geofencing could take your text message campaigns to new heights – ultimately helping you get more sales and improve the customer experience.

In this article, discover what SMS geofencing is, how it works and how it's used for various business purposes.

What is SMS geofencing?

Before we dive into SMS geofencing, let's first look at what a 'geofence' is. It's a virtual boundary or perimeter that can be set up around a particular physical location.

Geofencing technology is used by businesses for a range of purposes – to track vehicle fleets and manage drones, provide real-time delivery updates, engage visitors at organised events, and provide location-based marketing. It's also used for location-based monitoring and insights, for example, to track when people enter and leave a building.

Geofencing can be used in conjunction with an SMS program, push notifications, social media or mobile apps.

SMS geofencing allows you to send text messages to customers when they enter a specific geographical area. But you can't just text anyone and everyone within a geofenced area (aside from being financially impossible and ineffective, that would also be illegal).

You must obtain permission from customers to access their location data for geo-tracking and for sending SMS geofencing marketing campaigns.

How does SMS geofencing work?

Firstly, you need to set up your geofence radius, the size of which can vary – it might be a couple of kilometres or a few city blocks. You may even decide to set up multiple geofences.

Then you'll need to obtain the necessary permissions to collect subscribers for your SMS geofencing list. Once that's done, you can start tracking subscribers who enter the area.

Geo-tracking works by tapping into GPS or RFID signals. To find a GPS location, an SMS provider carries out a location 'lookup' process. You'll get an alert when subscribers are within the geofenced area, and you can then send them highly targeted mobile marketing campaigns.

Typically, your SMS campaign will be already set up and automatically triggered so that when a subscriber is nearby, they receive your SMS message straightaway.

What about the cost of SMS geofencing?

Whenever your SMS provider looks up the location of your subscribers, this carries a cost (in addition to the cost of sending out your SMS campaign). So it's important to be strategic in how often this process is carried out.

Think about when customers are most likely to be in the vicinity of your building or wherever you've set up your virtual fence, and ensure that location lookup is only done once or twice per day during occasions when you need to actively engage or target customers.

Friends with mobile phones meeting in a coffee shop

Use cases and examples

We've briefly described how mobile geofencing could be used, but here are some examples and real-life use cases to give you more of a flavour of what's possible.

1. Marketing

Restaurants, fast-food chains, bakeries and cafes can utilise geofencing and SMS marketing to entice nearby hungry customers to come in and eat. Pizza Hut did this successfully by sending a special text promotion to subscribed SMS contacts within half a mile of its restaurants. Incremental sales increased by 142%.

Similarly, individual stores can offer coupons or other incentives to tempt customers in the vicinity to pop in and make a purchase. The UK consumer app, Vouchercloud, uses geofencing to serve app users with store vouchers when they're within a certain distance of participating stores.

2. On-demand location-based services

An example of this is the ridesharing app Uber, which uses geofencing to determine where users are located and which Uber products are available to them. Uber also uses GPS tracking and geofencing to show riders the number of drivers in a certain area.

3. Smart appliances and IoT

Some smart appliances use geofencing technology to track whether you're at home or away, like Nest, the smart thermostat. Nest uses your location to tell when you've left home and can adjust your heating settings accordingly to save energy.

4. Asset management and security

Many businesses use geofencing to secure valuable assets and receive alerts if authorised movement occurs. For example, government agencies may protect IT and mobile equipment through asset tracking and geofencing. In the event that a laptop is taken from the premises without permission, the asset manager would be alerted and can take action.

How to implement geofencing for your SMS marketing campaigns

To send out text messages in bulk, you'll first need to choose an SMS provider that offers geofencing as an add on to SMS marketing campaigns.

The next step is to get consent from your customers to a) send SMS marketing campaigns and b) contact them by text with location-based marketing offers. The customer must give permission for you to use their location data before you start sending them information.

The best way to get consent for location-based SMS marketing is at the point of opting into text campaigns. You might do this by displaying a statement on how you intend to use subscriber data next to the mobile phone number field on a contact form and asking subscribers to tick a checkbox to opt-in to this type of marketing.

After you've started collecting subscribers, you'll want to set up your geofence. Your SMS provider will help you with this, but you'll need to decide on the specific area and radius. Once that's set up, create an SMS marketing campaign with the content you want to offer subscribers when they enter the geofence.

SMS geofencing marketing best practices

Get the most out of your SMS geofencing campaigns by following these best practices and tips:

  • Don't cast your net too wide – for stores and eateries looking to entice customers with SMS marketing, use a small geofence radius. Ideally, you don't want customers having to drive for more than five minutes to reach your business.

  • Customise where possible – it can be hard to develop a one-size-fits-all special offer or incentive to suit each customer that enters the geofence. Consider segmenting your subscriber list and setting up more personalised SMS campaigns, perhaps according to gender, age or customer behavior.

  • Be conscious of timing – ensure you're sending the right text messages at the right times – when customers are likely to want to visit you or take advantage of your services.

Woman using mobile phone while out and about

Set up SMS geofencing for a competitive advantage

Geofencing is an exciting technology that can be leveraged for several purposes, including marketing, on-demand location-based services, fleet management, real-time delivery updates and asset security.

Using SMS marketing with geofencing can help you stay ahead of the competition, particularly if you rely on local customers to support your trade. As long as you're creating enticing content and sending text messages at the right times, you can effectively meet your target audience when they're potentially looking for you.

Taavi Rebane
2022-04-12 00:00:00 UTC
2386282