SMS Geofencing: What It Is and How It Works

From GPS to sharing location on social media, most of us are aware that our phones can track our location.

From a marketing perspective, knowing when your customers are close by enables you to use a variety of localized marketing tactics to grab their attention — and this is where geofencing comes in.

While business owners aren’t able to track their customers (don’t panic), you can trigger an action for when an individual’s phone enters a particular location. Ever been to a new city and found yourself scrolling through local ads? Welcome to geofencing. 

Don’t worry if you’re still confused. The rest of this article will break down geofencing so you can know what it is and how to use it.

What is Mobile Geofencing?

Mobile geofencing refers to using a cell phone’s location to serve relevant ads to the user. A geofence is just a fancy word for a virtual border around a physical area. 

When mobile users enable their location services, they’re allowing apps to track where they are. And as users move about in the physical world, they may enter locations where brands are advertising their products and services.

It sounds scarier than it is. In reality, we’ve been using location-based services for years. However, with 85% of U.S. citizens having a smartphone, the technology has adapted to being mobile-centric.

Since geofencing enables developers to create a virtual boundary around a location, business can trigger an action when mobile users enter that location. These actions include sending a location-specific marketing text message through SMS geofencing.

What Is SMS Geofencing?

SMS geofencing works by sending out text messages when a customer enters a specific location.

Before you get ahead of yourself, there are two rules for every business using SMS as a marketing tool.

1. You must get consent to send SMS marketing messages to your customer.  If you are new to business text messaging, the first thing you learn is that every one of your subscribers must opt-in to receive text messages from you.
   
   One of the quickest and easiest ways to obtain consent, is by setting up a keyword (pictured below). A keyword is a specific words or phrase which, when texted into your allocated number, signs up the customer to receive your marketing SMS.
   
   If one of your opt-in methods is a keyword, you can trigger a message immediately to request the location of your customer. This, as you’ll see in point 2, is critical.
   
2. You must get permission to use their location. Once your customer has opted in, you then need to request permission for their location. Location is not automatically enabled via message, so to track your subscribers they need to enable it.

We get it, most businesses would love to send out a blanket SMS to anyone within a 5 mile radius, but unfortunately, that is not possible.

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How Does SMS Geofencing Work?

Once you have both types of permission from your customer, you’re ready to go.

To track your customer’s location, your SMS provider will have to tap into the customer’s GPS or RFID signals. As messages do not permanently have location information switched on, this ‘location lookup’ process is necessary to determine when your customer enters the geofence. 

This means, instead of tracking your customers 24/7 — which is both costly and time consuming —  you can tap optimize your chances of successful SMS geofence marketing by choosing when to look up their location.

For example, if you’re a coffee shop using geofencing, you’ll want to check customers’ locations in the morning and at lunchtime. You can then send out a local promotion to customers within your geofence.

If you’re a sushi restaurant, you would check customer locations just before lunch and dinner, to catch customers when they’re in the mood for food and in your geofence.

How to Use SMS Geofencing

If you’re ready to introduce SMS geofencing to your marketing strategy, here are the best practices we recommend you follow: 

1. Use A/B Testing

Because you can’t track your customers all hours of the day, it’s worth testing when is best to switch on location lookup. If you have multiple locations, different areas may vary depending on the time of day, or even day of the week. 

It’s not a one-size-fits-all solution. The best way to reach your customers is by testing out when it is that the most people use your offers and promotions.

2. Personalize Your Messages 

Just because you’re sending out a mass text, it doesn’t mean you should generalize. You already have insights into where they are – use that to your advantage and customize the text message to trigger action. 

It could be wishing them a happy Friday ‘Start the weekend right! 🍕’, or sending a text dependent on their time of day, ‘The 7AM life is hard for us too, here’s 10% off your morning coffee.’ Whatever you do, use what you have to make the messages feel personal.

3. Be Precise

Geofencing is not a free-for-all. To garner the best results, you need to be specific. Reaching 10,000 people won’t matter if only five of them are local to you. 

Establish a boundary in or near the location of your business so that nobody has to travel far to visit you (trust us, they won’t bother).

4. Re-Locate Your Geofence

As with using A/B testing on the time of day, you can also choose different geofences to reach your audience. 

If you feel like you’ve reached everyone within a specific area, or they aren’t engaging with your text messages, move the geofence elsewhere to see how that performs. 

Why is SMS Geofencing Effective?

There’s a reason SMS geofencing is used by Uber, Starbucks, Pizza Hut and more. It’s one of the most effective ways to increase marketing performance.

Pizza Hut trialed sending out a text promotion to customers within half a mile of its restaurants. The result? A 142% increase in sales.

That isn’t just a fluke either. Factual’s Location-Based Marketing Report established the following:

• Almost 9 out of 10 marketers attribute higher sales, growth in customer base and higher engagement to location-based marketing.
  
• 82% of marketers are currently using some sort of location data, and 94% have planned to use it in the future.
  
• Mobile is the top channel for leveraging location data.
  
• Marketers believe quality of data, e.g. specific location or demographic or a customer, is two times more important than the next purchase criteria; ease of use and price.

Leveraging geofencing for marketing is simply about contacting your customers at the right time and place. By knowing their location, there’s no need to guess when or if it’s the best time to contact them.

Use Location-based SMS Marketing to Optimize Your Marketing Efforts

Though SimpleTexting doesn’t have a built-in feature for geofencing, you can use several location-based SMS marketing tactics within our SMS platform.

To get started, sign up for our free two-week free trial, no credit card required. If you like what you see, you can take full advantage of our suite of SMS marketing features when you upgrade.