For 8 out of 10 marketers, location-based marketing has emerged as an excellent marketing strategy to personalize promotions and send more timely messages to consumers to boost customer engagement. As a result, companies are continuously increasing their budgets on location-targeted mobile ads. 

As a case in point, the ad spend on location-based promotions went up from $21.4 billion (USD) to approximately $32 billion in 2023. 

One of the popular ways to do location-based marketing is SMS geofencing. In this post, we will discuss SMS geofencing in detail, how it works, and how eCommerce businesses can implement it. 

What is SMS geofencing?

SMS geofencing is a location-based marketing strategy where brands send geo-targeted text messages to customers whenever they are in specific areas.  

As part of SMS geofencing, companies create 'geofences' or virtual boundaries around which they want to do marketing.  Whenever a consumer enters this geofence, they get an automated message.  

For example, a retail store can send automated geo-targeted text messages to shoppers whenever they are near a store. Geofencing enables hyper-targeted marketing for better conversions.

According to the latest data, geofenced advertisements have achieved an average CTR of 7.5%, significantly higher than the average CTR for Facebook ads across all industries, which stands at 0.9%. 

Moreover, it drives significant results for brick-and-mortar businesses, increasing store traffic by 20% and doubling in-store visits while boosting mobile ad engagement by 50%.

How does SMS geofencing work, and can eCommerce brands set it up?

SMS geofencing technique typically uses GPS, cellular network data, or Wi-Fi positioning to track consumer location and accordingly send messages.

eCommerce brands can embed location tracking services in their app or use background location services with user permission to track the location of consumers and then trigger SMS whenever they enter any geofences. 

However, that's not always feasible. The opt-in rate means how many people choose to allow any kind of app tracking is approximately 25%. Consumers are not always comfortable allowing live location tracking. In that case, brands are supposed to look for alternatives to do location-based SMS marketing.

How to do location-based SMS marketing for eCommerce brands

While you can't always track the live location of consumers, you could still use the static location data of customers for marketing. You can ask for customers' current location information while they are signing up for the SMS list. 

Here is a step-by-step guide to how to plan location-targeted campaigns: 

1. Choose an SMS marketing platform

The first step is to choose an SMS marketing platform that will enable you to capture customer locations and run these campaigns.

Key features to look for in an SMS marketing platform are:

• Embedded opt-in form for the website to get customers' registration for SMS
• Segmenting users based on location
• AI-based copywriting assistant for quick campaign creation
• Scheduler for SMS campaigns
• Inbuilt reporting module to draw campaign insights

2. Collect data

You can collect consumer location information during the sign-up process. SMS marketing platforms allow the creation of embedded opt-in forms on the website. 

Then, add a location field (state, zip code, city, etc.) to the opt-in form to gather this data.

Alternatively, you can also use the profile addresses of consumers as the location for marketing. 

3. Segment data

Once you have gathered customer data, now it’s time to put that data to work. Segment subscribers based on location to run targeted campaigns for any location. 

4. Create campaigns

You have the most important information now, i.e., location segment. It's time to create campaign messages. SMS marketing platform provides ample templates for creating messages. 

Further, top SMS marketing platforms also have AI-based copywriter features that quickly create campaign messages based on some inputs (type of campaign, target audience, intent, etc). 

While marketing teams can take charge of campaign creation, these in-built templates and AI can fast-track the creation process.

5. Schedule campaigns

Location-based campaigns can be both ad-hoc or automated. You can plan ad-hoc campaigns based on seasons, festivals, events, or trends. 

For instance, promoting summer wear for the states facing heatwaves. Schedule these campaigns in the SMS marketing platform. 

Having location information also allows marketers to personalize automated campaigns like cart abandonment, new user sign-up, winback, and more based on area. 

6. Measure and optimize

Lastly, don't forget to track important KPIs of campaigns such as open rate, click rate, converted rate, and revenue. 

This information will help you identify what's working and what's not for running more effective location-based campaigns. 

Run effective location-targeted campaigns with Plivo CX

Plivo CX is an SMS marketing platform offering end-to-end features for all location-based campaigns.

With Plivo CX, you can:

✅Get customers to opt-in and share location details

✅Segment subscribers based on location for better targeting

✅Create personalized location-targeted content for campaigns with in-built templates and AI-powered copywriter

✅Launch campaigns with ease

✅Build reports to track key metrics

You get an end-to-end solution that complies with all government regulations for safeguarding customer data. 

What’s best is that we use a proprietary premium carrier network, assuring you higher deliverability and affordability. You can over 220 countries/territories with higher deliverability for as little as $0.0065. 

Schedule a demo today to start planning your location-based marketing campaigns.

Frequently Asked Questions (FAQs)

1. Is geofencing marketing legal?

Yes, geofencing marketing is legal if you comply with local laws and regulations: 

• Obtain customer consent: You get customer consent to track location.
• Provide opt-out options:  Customers can opt out of tracking anytime.
• Comply with privacy laws: You are following data privacy acts to safeguard customer data. 

2. What is the purpose of geofencing?

Geofencing allows brands to send hyper-personalized messages to consumers based on their current location. It increases the chances of engagement and conversion. 

3. How can businesses use geofencing?

SMS geofencing can be used in a variety of sectors:

1. Retail: Notify nearby customers about ongoing sales, special offers, product restocks, or new arrivals to encourage store visits.

2. eCommerce: Recommend nearby physical stores to customers based on their location.

3. Hospitality: Hotels and restaurants can greet customers with check-in information, special promotions, or menu recommendations when they arrive.

4. Events: Organizers can provide guests with event schedules, site maps, and updates as they arrive, ensuring a smooth experience.

5. Transportation: Passengers waiting at specific stops or terminals can receive real-time updates on routes, delays, and promotions. 

4. How can businesses use geofencing in conjunction with other marketing?

Geofencing can be effectively used to personalize the following marketing channels:  

1. SMS Marketing: Trigger SMS messages based on user location within a geofence.

2. Email Marketing: Send targeted emails to customers based on their location or recommend nearby stores.

3. Social Media Marketing: Run targeted social media ads to users within a specific geographic area.

4. Push Notifications: Send push notifications with location-based offers to users of your mobile app.