Geofencing SMS campaigns – pros, cons and alternatives

What you should know before you start a geofencing SMS campaign

Have you ever heard of geofencing? Have you perhaps also heard of geofencing SMS campaigns? The premise is promising: is it possible to send an SMS to people when they enter a certain area? We take a look at what’s up with the alleged trend and how it can be implemented – and what the sensible alternative to a geofencing SMS campaign is.

What is geofencing?

According to Oxford Learner’s Dictionary, geofencing is “a technology that draws a virtual line around a physical area so that a signal can be sent to a mobile electronic device such as a phone inside this line or when this line is crossed” (source: oxfordlearnersdictionaries.com).

In short, this means that a boundary is defined, for example around a park, and when someone crosses this boundary, a notification is triggered. Geofencing is also used to monitor the use of rental cars or to mark prohibited areas, for example for drones.

The location of the target device is often determined via GPS and in some cases by signals such as Wi-fi, mobile radio, RFID systems or Bluetooth.

Geofencing is already being used in various ways: The parking locks of well-known e-scooter providers are implemented via geofencing, smartphones enable automatic notifications when entering or leaving certain zones, and the Luca app (a German app for tracking locations in case of COVID infections) can, if desired, initiate automatic logging in and out of a certain area via geofencing.

In short, there are many possible applications for geofencing in the highly connected life of the present and future.

And what does geofencing have to do with SMS marketing?

In marketing, geofencing is one of the location-based marketing strategies. The appeal of combining this method with SMS marketing is not surprising.

The high and fast opening rate of SMS ensures that your message is not read four hours later, but on the spot, when and where it matters. Combined with the personal touch of SMS, this creates a scenario that many marketers can only dream of: They can address (potential) customers immediately and personally, exactly where it makes sense – with minimal wastage.

In reality, however, the whole thing is somewhat more difficult to realize – more on this in the section: Geofencing SMS campaigns: Con

Geofencing SMS campaigns: Pro

Let’s look at the positives first: An SMS campaign that uses geofencing has the potential to be a great marketing measure. The surprise effect (although very limited, especially in Germany, more on that later) draws a lot of attention to your brand. By relating to where your recipients are, the content of your message is extremely relevant – if you plan the campaign right. In addition, as mentioned above, the scattering loss would be lower compared to other marketing measures.

Caution: All these advantages only work with a well-planned campaign, which you have ideally tested several times and which is exclusively played out to recipients who have consented to receive SMS based on geofencing.

Geofencing SMS campaigns: Con

Now let’s talk about the arguments against a geofencing SMS campaign, because not all that glitters is gold.

The first point we need to talk about:

It doesn’t work the way you might think

Many marketers imagine geofencing SMS campaigns to be something like the SMS notifications we receive when we return to Germany from abroad.

This is not feasible for two reasons:

You need the recipients’ mobile numbers to send SMS AND you need the recipients’ consent. It is not possible to simply send SMS to all devices that are in the vicinity of your store.

If you still decide to run a geofencing campaign, it is imperative that you make it very clear to your recipients what they are consenting to during the consent process. If your recipients receive location-based SMS and can’t remember this consent, it can be extremely damaging to your brand, even if you happen to have the legal high ground.

Example of SMS that can be triggered in certain cells

Sending an SMS to all devices that enter a specific cell is only available for government warnings or other important info.

In addition, locating a device is associated with effort

Theoretically, it is possible to gather information from mobile operators about which cell a certain device is located in (and thus, approximately, where it is), but in reality this is difficult. Surely you know that you are not allowed to query the location of any cell phone “just like that”. We are not aware of any provider in Germany who would offer such a query as a service for companies, even with explicit consent of the recipients.

But even in cases where the query is permitted, it would quickly become very expensive if hundreds of recipients were involved.

The bottom line is: this type of geofencing marketing is costly to implement, if it’s possible at all.

Another way to implement geofence-based SMS marketing:
Your customers download an app to track their location and then allow you to access that location there. Be careful, you should additionally obtain their consent to receive SMS. You’ll have to decide for yourself how useful it is to send SMS if your recipients have already had to download an app.

Be prepared, however, that this version might not give you the desired goals. On the one hand, the hurdle for recipients to download your app just for this purpose is big, on the other hand, this kind of location tracking often consumes a lot of battery, which is why your app might be deleted again quite quickly.

So it is possible, but not exactly easy

So the truth is that in most cases, it is complicated to make a geofencing SMS campaign happen, and the implementation also often requires measures that greatly weaken the surprise effect of your campaign. In addition, you must ensure at all times that you adhere to the GDPR, because location data in particular is extremely sensitive data. What’s more, implementing this type of campaign can be very costly.

However, there are ways to implement location-based marketing without geofencing. So let’s take a look at a sensible alternative.

What is a viable alternative to a geofencing SMS campaign?

If you decide against geofencing, you can still implement a location-based SMS campaign. In this scenario, you use data that your recipients have consciously shared with you to send them SMS that relate to an individual location.

Sure, you don’t know when your recipients are in the mall, but you can know what city they live in, what days they like to go to the mall, and what weather they like to go shopping in – all you have to do is ask them.

By the way, SMS surveys are great for asking for information. You stand a good chance of doing so: 83% of all customers are willing to share their data with a company if they receive personalized offers in return (source: Accenture).

Local marketing with attention to detail replaces complicated geofencing and is valued by customers. Moreover, it goes down much better with your recipients if they don’t feel spied on and they can remember that they shared their data with you.

An alternative to geofencing SMS: Local SMS marketing
Transparency is key

When you ask for this type of data, let your recipients know what you’re using it for and ask for their consent. This is the only way to make sure that location-based marketing is not perceived as creepy or intrusive.

Examples of location-based SMS marketing

Getting started is the hardest part. If you want to get into location-based SMS marketing but are still lacking ideas: Here are a few examples of how you can use location-based data.

Last minute offers

Do you have a certain product that is about to expire or do you urgently need to clear some space in your warehouse? Make a special offer to customers who live close to your store. How? Create a group that contains recipients who have the same zip code as your store.

Matching the weather

The weather is unusually nice or it’s been raining for three days? Make reference to the weather where your recipients live. If you can, offer matching products or entice them with a bad weather discount: How about 10% off rain gear or a free umbrella with your purchase?

Locally important events

Is there an important folk festival celebrated in the region? Are there regionally significant holidays? Find out about the locations of your customers and the festivals that are celebrated there. Anyone can offer New Year’s discounts – you are close to your customers!

Educated guess

Do you ask your customers about their whereabouts and preferences? If you collect, maintain, and combine this data well, you can make educated guesses about which customers might be near your store and when.

What is your idea?

Do you already have experience with location-based SMS marketing or even geofencing SMS campaigns? We would love to hear your story!

All the best
Your sms77 team

Header picture by Jeremy Bezanger via Unsplash

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