Have you ever been out running errands and received a text message about a special offer from one of your favorite nearby shops?
Then you’ve likely stepped inside what’s known as a geo-fence. And if you’re running a small business, it also may be an alert to start connecting with your own digitally savvy customers.
What’s a geo-fence? It’s a virtual perimeter in a real geographic area. For marketers, it’s a technological line your customers can cross, triggering messages—such as an offer of a coupon, a daily special, or information about upcoming events or new services—that they receive on their smartphone when they’re in a position to act on it, provided they’ve opted to listen to what you’re offering.
It’s just one aspect of the field of location-based mobile marketing. Sometimes called “proximity marketing,” this is the business behind cereal boxes chirping to your cellphone in the grocery aisle or flat-screen TVs asking you to take them home today via a big-box electronics store’s app. And while the industry still in the early adopter phase—a recent study found that only five percent of mobile users regularly use location-based services like Foursquare—getting in early may give you a competitive edge.
Fortunately, these location-based marketing efforts are also easily scaled down for small business budgets. The equipment needed is often as small as a mobile phone, and industry experts say basic monthly service packages often start at $100 to $200. For additional fees, agencies can help create digital ad campaigns and guide newbies as they get started in crafting messages of their own to get the attention of their phone-wielding customer base at just the right moment.
“You know who walks by your shop and when,” says Lawrence I. Lerner, a Chicago-based business consultant and a veteran brand marketer. “If it’s the morning, there’s maybe time for coffee, but they’re not going to have time for a big purchase. So you can send out dozens of these messages at different times. You know the audience is there, so if you’ve got a window display that might catch their eye, the message is ‘Hey, turn around and look at our spring fashion that we just put out.’ ”
Michael Zeto became interested in the field through his own small-business experience, at The Boston Beer Garden, a 45-employee sports bar and restaurant in Naples, Fla., in which he’s an investor. An enterprise-software industry veteran, he experimented with so-called hyper-local proximity marketing on his own, and says he saw a huge response to his promotional offers of off-the-menu specials and shout-outs about special events, such as Super Bowl or St. Patrick’s Day parties. “While customers were in the restaurant, we used it not only as a sales opportunity, but also as a marketing opportunity,” Zeto says.
He’s now chief executive of Atlanta-based Proximus Mobility, which specializes in location-based proximity marketing software. The company enlists a patented technology that enables the delivery of relevant ad content, and also includes analytics, geo-fencing, and an SMS text-marketing platform. In the field, Proximus uses an access-point device—just slightly larger than a smartphone—that sends out hyper-local messages, and focuses on cost-effectiveness with a host of response metrics available via the company’s web-based campaign-manager interface.
“It’s not just about serving the content and the ads—it’s about being able to measure it and knowing how many people actually accepted the offers. And then taking it a step further to see how many people redeemed the offers. It’s all measurable, and that’s the key, Zeto says. “Most small-business owners don’t think to measure.”
It’s also about knowing where your customers are.
Here’s how the geo-fencing technology works: It’s a combination of GPS and mobile Internet. GPS connects with satellites to crunch out a calculation that shows a user’s precise location. Mobile Internet connects with a Web server and sends information about a smartphone’s GPS location. If you’re operating a properly equipped geo-fence, you can tell when a smartphone enters or leaves a certain location. The perimeters can be set anywhere from a few feet to several miles.
Concerned about privacy? On the users’ side, proximity marketing isn’t an uninvited torrent of unsolicited messages. Customers need to opt in by a variety methods—signing up inside a store or on a website, or text-messaging a code to a phone number, for instance. (And be sure that you’re ready to get the message: iPhone users with the latest software will know their geo-fence antenna is up if they see a little purple arrow at the top right of their phones’ screens.)
Ultimately, it’s about getting the right enticement at the right time to your customers.
“That fence that’s created is very specific to you. The technology becomes the easy part—that’s just the enabler,” says Lerner. “For a small business owner, it’s about creating something that’s eye-catching, meaningful, and relevant to that person at that moment in time. And that’s where a smart small business owner can have an impact.”