To know your customers, ping their phones

Every customer carries a phone and a wallet. To get to their wallet, go through their phone.

Geofencing enables that. It should be a familiar concept by now. By taking advantage of existing cell phone networks, marketers can designate bounded areas near retail stores. Customers can be “pinged” with coupons and special offers if they are nearby — or if they are shopping at a competitor.

While geofencing looks like a great way to reach out to shoppers, there is a challenge in striking the right balance. Brands should not be spying on shoppers, looking to badger them to buy something. Geofencing done right requires the consent of the consumer. It also requires good judgment by the marketer as to when is best to reach out to that shopper.

Don’t confuse geofencing with beacons

Geofencing sometimes gets confused with beacons. They are alike, in that they are about locating likely buyers. But they diverge based on range and platform. Beacons run on Bluetooth. They only have a range of two meters and are useful for proximity location, Josh Francia, Chief Growth Officer at marketing automation provider Blueshift, told us.

Beacons are best used in-store, perhaps prompting a shopper to go to another section to buy an item associated with their purchase. For example, if a shopper is buying paint, a prompt would guide them to another section stocking drop cloth.

Geofencing works at a different scale, using a different wavelength. It can use WiFi, GPS or the existing cell phone network to reach possible customers within 200-500 meters of a location. The store will know who is “down the street or in the parking lot,” Francia said.

WiFi location is the most accurate of the three, but not always available, Francia said, while GPS also offers accuracy, but at the cost of draining the smartphone battery. Cell phone data is the least accurate, since it requires triangulation between several cell phone antennae. But cell phone service is mostly available and the battery hit is light, he added.

Pinging cell phones for data is not a new trick. This type of data has been around for the past 10-15 years, Francia said. “It took a while for companies to understand the value of the data.” Marketers had to learn how and when to pitch an offer. For example, it is pointless to serve a coupon to a consumer if they were likely to make that purchase anyway, he said.

The store has to gauge the likelihood of the shopper’s next interaction, and that requires creating a “universal profile” of that shopper as the basis for figuring out that “next best interaction,” Francia explained. “A lot of companies are still getting there…It’s a struggle to figure out the path.”

Geofencing for convenience

While marketers look for ways to sell, one use case can go overlooked — convenience. “Outside pickup is the biggest use case,” Inderbir Singh Pall, Senior VP and GM for the Commerce Group at mobile marketing platform InMobi. This can run parallel with a more typical use case: Personalizing an offer to a mobile user.

Both use cases are trust-based, so brands have to find ways to build that relationship with the customer. AI offers one approach, by managing recommendations and updating messages to fit the customer, Singh Pall said.

The vendor gains trust if they use data to communicate to the user, show an offer or provider curbside pickup, then the promise is made, the service or product delivered, and trust is retained, Singh Pall noted. “The reinforcement of a soft message [retains] trust.”

Data should always be used in accordance with policy, and that policy must be communicated to the customer, Singh Pall said. Without this mechanism, a brand runs the risk of being creepy. “Why is this coming?” a customer may ask, if the brand is reaching out to them out of the blue, he described.

The tech industry practice of “moving fast and breaking things” is really the wrong move, Singh Pall continued. Be conservative and practical, he advised.

Brands cannot spy on their customers. But it is not spying if a customer consents to revealing their location. “As an application developer, you must offer permission to the customer,” Francia said. Ideally, one should present a screen explaining the value to the customer of enabling a location service before presenting the screen that allows the user to “opt in”, Francia explained.

Do the right thing

When crafting a geofencing solution, marketers need to do two things: work with an infrastructure partner, and enforce data privacy regulations, Singh Pall stressed. Data governance has to run throughout product development, he added.

Francia came up with a similar checklist for brands. First, understand the technology you choose, its proper use case, and what value you are trying to generate. Second, understand that you are trying to deliver incremental opportunity. If you are trying to provide a coupon to a customer, you have to marry that with understanding other intent signals the shopper may be sending. Finally, “Marry geofencing with privacy, and be up front with the customer.” Francia added.