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SMS Geofencing 101: 9 Secrets to a Successful campaign

SMS geofencing is one of the marvels of marketing technology, taking personalized SMS marketing to a whole new level. Imagine being able to send business updates, promotions, sales, or events to your customers exactly when they need the product or service. Jackpot, right?

SMS geofencing can help you achieve this. It enables businesses to engage with customers according to their interaction with a specified geographical location. A recent study notes that 75% of customers don’t mind receiving personalized text messages from brands so long as they subscribed or signed up for it. In fact, 64% of these consumers believe that businesses should reach out to them more often via SMS. However, although personalized SMS marketing, particularly SMS geofencing comes with tremendous benefits, unfortunately not everyone is tapping into its full potential.

For this reason, in this article, we take a deep-dive into how SMS geofencing works, what it is and share 9 best practices to ensure the success of your text message marketing campaign. Whether you’re launching text messaging for real estatestaffingautomotivefinancefitness, or other industries, SMS geofencing can go a long way in personalizing your campaign and maximizing your results.

What is SMS Geofencing?

SMS geofencing technology leverages location based SMS messaging to connect a business with the right customer at the opportune time. Whenever they interact(enter, exit, or stay) in or out of the specified boundary, an SMS can be triggered to engage them.

You can use this tool to send out a critical automatic text alert, notifications, and reminders to your customers. With SMS geofencing, brands can target people who are in their store radius, an event venue, or a person’s home address.

For example, if you are a automotive store owner or perhaps running a fitness club, you can set up a geo fence around your space. When a user enters within this radius, you can send them a push notification about workout reminders, coupon deals, and so on. Note that first, you will need to get consent to access their location data and also consent to receive messages from your brand. 

With 97% of the American adults now owning smartphones and spending more than 5 hours on their mobile phones every day, SMS geofencing presents a huge opportunity. You can deliver targeted promotional texts to customers based on their mobile usage behavior and location, which will consequently boost your metrics and sales.

How Does SMS Geofencing Work?

SMS geofencing starts by inviting customers to join your exclusive list. It helps if they  agree to a mobile opt-in that gives you specific permission to access their location data and send them marketing messages when they are nearby the store.

The next step will be establishing your store radius or geofence so that when a customer comes within the area specified by the geofence, your system sends an automatic text message to the individual’s mobile phone. The  SMS message can be a reminder, coupon, deal, or notice that will compel the recipient to visit your store or website when they are within the geofence radius. 

To put this into perspective, here’s an example: If Amanda signs up to be a part of MacDonald’s’s SMS geofencing list the last time she ate there, she will receive a text alert on her phone the next time she is in close proximity to the restaurant. The message may read: Enjoy happy hour offers at MacDonald’s. Get 35% off the wings today from 5 pm to 9 pm. 

Because MacDonald’s has established a virtual perimeter in their SMS geofencing campaign, every time someone on their list enters this zone, they can leverage the right promotional text to woo the recipient again as a buying customer. 

However, most businesses using geofencing do not always get real time updates on their customer’s location. Since this lookup costs money, it makes more sense to check customers’ location once or twice a day, at a time when their customers are more likely to be in the vicinity. 

For example, if a restaurant like Pizza Hut is only interested in delivering lunch or dinner promos to subscribers within a particular location, they may choose to only check and send messages to subscribers in their location twice a day, before lunch and dinner.

From the explanation above, we can break down how SMS geofencing works into the following steps:

  • Invite customers to opt-in via website, SMS code, mobile apps, or even in-person registration
  • Determine a geographical boundary around a physical world location
  • Create a geofence around this location
  • When a device enters or exits from this radius, the system triggers an SMS

The 9 Secrets of a Successful SMS Geofencing Campaign, Revealed!

SMS geofencing is one of the most effective ways to drive customers into your business or store—it’s also very easy to set up. But like most systems, users need certain tips from experts with hands-on experience to optimize how their geofencing works. 

Here we reveal the 9 secrets of successful SMS geofencing campaigns

  1. Create a Precise and Hyper-Local Geofence

While it can be tempting to set up a bigger store radius in a bid to target a wider audience, it may not be a prudent idea. A top secret to SMS geofencing campaign is creating a geofence radius that is as close to your target audience or business as close as possible. In fact, your radius should be so small that opt-in recipients can reach your store within a few minutes of walking or driving. 

  1. A/B Test the waters

After creating an SMS geofencing campaign, you should perform A/B testing. This test allows you to discover what works well for your target audience by measuring how well they respond to your SMS ads.

For example, if you run a small restaurant, you may find that offering 30% discounts on drinks during happy hour is more attractive to your customers than a sample side dish. This is a great way of comparing two different campaigns to see which one performs better. You can then use this information to customize future campaigns.

  1. Be Specific, Ambiguous Messages Don’t Work

The content of the SMS message is what determines its success. Try to tailor your text messages to the interests and habits of your audience. Tap into your customer behavior and emotions and you have a winning strategy for engaging your customer.

  1. Your messaging frequency can make or break your campaign!

One mistake businesses implementing SMS geofencing make is sending too many messages to their opt-in recipients whenever they are nearby. It is important that you use well-thought-out frequency limits when sending out location based text messages. Why? Because if you bombard people with messages whenever they come close to your place of business, they may get annoyed and opt out. 

Instead, consider sending a message twice a day with a reasonable number of hours in between. If you are sending a time-based offer, then send the subscriber just one message until that offer expires. 

  1. Make every word count

Make sure that your text message is interesting enough to get people who receive it to visit your website or enter into your store. ​​ Geofencing campaigns are unique because you can send them every time customers approach your business. You want the SMS message to be relevant to the user and prevent them from opting out. Most importantly, you want the recipient to take their time and see what your business has to offer. 

  1. Customize, customize, customize

​​The success of your campaign messages to a large extent depends on how much you customize them with regards to the target geofences. Of course, there might be limits to how much customization you can make on your messages. However, the good news is that you can segment your subscribers into different demographic categories and then create messages that will appeal to the recipients based on how they were segmented. 

  1. Don’t limit yourself to your Location

It’s not compulsory to limit your geofences to your location’s proximity. This may not drive enough traffic for your shop or website. It sounds more prudent to set up multiple geofence areas that cover places where the people interested in your product or service visit at certain times of the day. 

  1. Remember About the Timing

You might have heard that timing is everything – especially when it comes to mobile marketing. This is so true. You want to be sure that your text message arrives when your customer is most likely to read it. 

Sending an SMS too early or too late can result in its misuse or misinterpretation altogether. Even worse, your customer can get annoyed and frustrated by the interruption. For this reason, timing is very important not just for the moment your messages go out, but also for the time of day as well.

  1. Measure Everything

Measure and log any metric that might have an influence on the success of your campaign. 

Each message requires testing to see how well your customers respond to it, and what works or doesn’t. Your future efforts will be even more successful if you have this kind of data at your disposal every time you launch a campaign. 

Example of an SMS Campaign Using Geofencing

Location based marketing is no longer a novelty. With the advent of smartphones, consumers are now carrying location-aware devices with them at all times.

The Easton Mall location-aware SMS marketing campaign in partnership with Alliance Data is a good example of a successful SMS campaign employing geofencing.

The campaign targeted Cardholders of branded credit accounts that took part in Black Friday through New Year’s Eve. An SMS geofence triggered an SMS text promotion when these cardholders were within a certain distance of the mall. Participants in the SMS program used their store credit cards to enter sweepstakes for a chance to win free shopping at participating retailers.

Top Companies Using Geofencing

  • Uber

Location tracking and GPS tracking are essential to Uber’s entire business model. Leveraging geo fencing around the user’s specified geographical area, the app shows the number of cars available on a map. It also shows the expected waiting time for a driver to arrive once the user opens up the app to request a ride.

However, Uber takes things a step further. If you allow your location services to be turned on, Uber will know where you are at all times even when you’re not using the app. As a result, if you enter one of their geofenced areas, you’ll get a push notification.

  • Starbucks

Starbucks uses geofencing to target interested customers with new flavors and discounts on coffee products. Users receive push notifications when they walk by their outlets or when nearby. The happy hour special is an excellent example. Every Thursday from 2-7 p.m. there is a happy hour special which offers BOGO free on any grande or larger beverage.

  • Taco Bell

Taco Bell’s app is one of the key tools in their geofencing campaign. This app allows users to order food via their mobile devices. Takeaway geofencing content lets customers know they can order from their mobile device and pick up their food within a few minutes instead of waiting in line.

The brand also uses geofencing to alert under-30 customers anytime they come near a Taco Bell location. It’s a great idea to remind them that they can order food from their phones and pick it up in-store. Taco Bell identified its target audience, communicated with it using the right tools, and experienced a 6% increase in sales.

Who Uses Geofencing?

Geofencing applies in a wide range of industries. But, retail, banking, and quick service restaurants like Pizza Hut are some of the sectors that are significantly taking advantage of this technology. 

Geofencing is also one of the best tools when it comes to text messaging for real estate. Players in this industry can leverage message marketing to stay ahead of the competition. For instance, it  can help brokers communicate better with prospects when negotiating property transactions. All the same, implementing SMS geofencing has added advantages. Brokers can create a virtual boundary and send notifications to subscribers anytime they are in an area where a property is open for viewing.

The transport sector can also benefit from geo fencing. In fact, the City of New York uses geofencing technology to provide users with real-time information about public transit options around New York city blocks.

As you can see, geofencing is a powerful marketing tool. Many companies leverage it to increase customer engagement and drive foot traffic to their businesses. If you are not yet using it, you should consider implementing it in your marketing strategy.


What is the difference between online geo-targeting vs offline geo-targeting

  1. Online geo-targeting is the practice of using online data to find users’ locations. Businesses can then deliver geofencing advertising based on those locations. 
  2. Offline geo-targeting on the other hand uses offline business data to target consumers. You can do this by acquiring and analyzing the data of a region or zip code. After that, use the analysis to identify the income levels, spending habits, and preferences of each area.

How do you determine where subscribers are located?

Geofencing uses location data to determine where subscribers are. Businesses then use information to deliver hyper-relevant text messaging. These messages can be targeted to specific regions, cities, neighborhoods, and even stores. 

Once opted-in, is the technology always tracking SMS subscriber locations?

  1. Not necessarily. The best way to use SMS geofencing is to define additional instructions for sending your relevant, locally-targeted, content. 
  2. For example, a restaurant might use location-aware SMS marketing to increase traffic during happy hour by targeting the close-of-work period and not tracking subscribers’ locations outside of that timeframe.

How accurate is the SMS subscriber’s location?

  1. Accuracy is affected by a number of factors, one of which is the sort of location data capabilities available. Accuracy is much better in outdoor conditions with A-GPS compared to other less accurate options.
  2. A cellular carrier’s network technology also has an impact on user location accuracy. There are a number of factors to consider here, such as whether the SMS user is in a densely populated city, a suburban neighborhood, or out in the countryside.

How big or small can the geofence around a business be?

The geo fence can be as big or as small as the campaign requirements and location technology can handle. Also, businesses can also create more than one SMS geofence if they have a lot of different places.

How much does it cost to add geofence to an SMS Campaign?

The cost of developing a mobile geofencing campaign is determined by the frequency with which a store wishes to check up the location of its SMS subscribers. A store owner that wants to look up his users location three times a day will spend more than the person doing so twice a day.

Implement Geofencing in Your SMS Campaigns

Geofences are becoming an essential part of location based marketing. In fact, there is no debate that they can improve a businesses’ ROI. It allows you to precisely target people who are in or around your retail store. It can be a powerful marketing tool for any shop or brand. 

Customers who receive messages like this will know about the great deals and amazing ambiance that you offer at your store when they are in close proximity to it. So, if you have not implemented geofencing in your marketing strategy, you should.

Get in touch with us for more insights on SMS marketing.

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