Have you ever wondered how some restaurants (and other businesses) manage to display their ads at just the right time and location? Well, the fact is, this is no mere coincidence. Knowing how to grab your customer’s attention is one thing, but knowing when to do it is yet another.
In this article, we’ll discuss how to boost your sales through geofencing marketing.
What is geofencing marketing?
In essence, geofencing is location-based marketing that allows you to reach people who are currently in a specific area. With the right software, restaurant marketers can send targeted promotions to mobile devices of your existing customers or marketing communication to people who aren’t your clients yet.
Since you define the area of geofencing yourself, you can target people who are within walking distance of your restaurant and serve ads directly to their mobile apps. The goal is to get more potential customers through targeted promotions based on geographic location.
How does geofencing marketing work?
The first step is to define the virtual boundaries. This can be as small as a store or as large as a city. Geofences are typically created using GPS, RFID (Radio Frequency Identification), Wi-Fi, or cellular data.
The advertiser can then create a virtual fence around the designated area (e.g. a restaurant), either by creating a circle around it or by defining the desired latitude and longitude.
When the app that uses restaurant geofencing detects that a user enters the virtual fence, it will use one of the following chosen ways to interact with them:
- SMS texts
- Mobile device in-app push notifications
- Texts in messengers or email
- Serving ads on social media or Google
Most digital marketing platforms like Google, Meta (Facebook), X (formerly Twitter), and Snapchat indeed support geofencing technology as part of their advertising solutions. Below is a brief overview.
- Google Ads: Allows advertisers to target users based on their location, including geofencing capabilities where ads are shown to users within a specific radius of a location.
- Meta (Facebook) Ads: Supports location-based targeting, enabling advertisers to reach users in specific geographic areas, including geofences.
- X (formerly Twitter) Ads: Offers location-based targeting for ads, including the ability to set geofences around certain areas.
- Snapchat Ads: Provides geofencing capabilities through its “Snap to Store” and other location-based advertising options.
These platforms incorporate geofencing directly into their advertising tools, making it easier for advertisers to create and manage location-based campaigns without needing special geofencing software.
How restaurants can benefit from geofencing
Even though implementing geofencing for restaurants doesn’t require a huge investment, it can still be difficult for the marketing team to add another channel of communication and manage all of the multichannel campaigns.
The benefits of geofencing offset the increased complexity of operations. Below are the five major benefits of implementing geofencing marketing for your restaurant.
- Targeted marketing: targeting is an extremely important part of marketing. A targeted campaign can enjoy a 670% increase in CTR in comparison with a non-targeted one. This is because you can constrict the demographic that is seeing the ad or message to the people who are more likely to purchase from you.
- Boost sales: Geofencing technology produces double the CTR of ads that aren’t location-based. It’s a wonderful opportunity to target potential impulse buyers who are within walking distance of your restaurant and can generate sales and increase exposure among people who live or work close to your business.
- Minimize order time: Restaurants are time-sensitive, especially when it’s a pick-up order. Geofencing for restaurants lets you see when a customer enters the area, thus allowing you to start preparing the order. This makes it possible to have the order ready exactly when they arrive at your establishment.
- Competitive advantage: Thanks to being the first to appear in the view of a prospective customer, you gain an advantage over the competition.
- Dynamic Pricing Strategies: If you have dynamic pricing, geofencing for restaurants can provide an additional source of data to change prices. You can log how many devices are in your area at any given time and adjust the pricing for certain positions when there’s more foot traffic.
How to implement geofencing into your restaurant marketing strategy
Setting up a geofencing area in your advertising app isn’t difficult. But before you go ahead and do it, you need to do a bit of planning and create a geofencing strategy.
Understand your target audience
Understanding your target audience will help you make better decisions as to what content to produce, be it video ads, direct copy, or simple coupon codes.
This knowledge helps you create an ideal customer profile and journey, allowing you to narrow down your target audience and craft tailored marketing materials. Start by understanding what customers search for on Google using a keyword list generator.
This will reveal their interests and provide insights into competitors’ SEO strategies. Use these keywords to run targeted Google search ads. Additionally, monitor online sentiment on social media and review sites and conduct surveys to analyze attitudes towards your brand and competitors.
Define goals
Next, you have to define your goals. This could be promoting an event, increasing restaurant foot traffic, or boosting online orders.
Depending on the goals you choose for a geofencing advertising campaign, you’ll have to craft slightly different messages and track different metrics to gauge how successful the restaurant geofencing campaign is.
Set up geofences around the desired area
Choose a location-based service for your geofencing initiative and set up your operational area based on your restaurant’s location. If your restaurant is in a city block with walking traffic, set up a geofence for a five-minute walk (around 400 meters).
In a shopping mall, make the radius small to cover the mall or nearby area (100 meters with GPS, 50 meters with Wi-Fi). For non-walking areas where people drive, create a larger geofence up to a few kilometers.
Use your business app or SMS marketing apps for precise geofencing. Advertising tools like Meta and Google Ads allow a minimum radius of one mile. Incorporate loyalty programs and menu specials in your geofencing initiatives to attract and retain customers.
Craft personalized messages and offers
Once you understand your audience and have set up geofencing, it’s time to craft the ad creatives. Geofencing lets you personalize offers since potential customers are close to your business.
Create time-sensitive offers, like a small discount lasting 30 minutes to a couple of hours, to prompt impulse visits and build repeat customers. If you’re using your restaurant app, personalize notifications with the customer’s name or favorite menu items. Additionally, use local marketing messaging to introduce deals, announce events, or highlight ongoing sales.
Track the data
When everything is ready, start your campaign. Make sure you track the campaign performance using your restaurant analytics software; that’s the most important part of making your geofencing campaign work repeatedly.
You’ll want to track at least a couple of these metrics, depending on the goals of your campaign:
- Impressions
- Click-through rate
- Website visits
- App visits
- Calls
- Online orders
- Walk-ins
If these metrics are on an expected level, continue monitoring to gather more data. If they fall short of your goals, you’ll have to figure out how to fix them. Follow the link for a complete list of restaurant metrics.
Restaurant geofencing marketing examples
Geofencing for restaurants can be a pretty straightforward way to show customers your business is nearby and ready to serve them. However, it can be used more sophisticatedly than simply sending promotional text. Let’s take a look at some creative uses of this tech.
Burger King rivalry
Advertising of larger brands is at its peak when it comes to friendly rivalries with other brands. This is exactly what Burger King’s Whopper Detour campaign did with a clever use of competitor geofencing.
The company wanted to increase app downloads so they offered consumers their signature Whopper for one cent when they downloaded the app. The only catch was that you could only download it around a McDonald’s location.
This combination of GPS technology, amazing discounts, and a good pun created over half a million app downloads and showed a 37 to 1 return on investment.
Dunkin’ Donuts changing loyalties
Back in 2017, Dunkin’ also did a competitor geofencing campaign that revolved around its competitors’ locations, and not the ones it owned. But the company did it with less PR and more of a cunning approach.
It hired an agency to build a pool of people who frequented rival doughnut and coffee shops in the past month, specifically those that were close to a Dunkin’ Donuts location. They then served ads to those people and offered coupons to redeem at the location.
This ad campaign specifically targeted people who were either loyal to competitors or didn’t care what doughnut shop to shop at.
Starbucks personalized offers
Starbucks makes geofencing ads that can be considered industry standard. When a customer of this successful coffee shop walks in the vicinity of a location, the app might send a promotional offer for their favorite drink.
This is the most relevant example of geofencing for restaurants, but it requires some planning to implement. You need to understand customer preferences to make it work. Preparing your restaurant marketing plan and determining your target market will help you, especially if you’re just starting out.
Key Takeaways
- Geofencing Marketing: Location-based service targeting potential customers in a specific area with promotions. Uses GPS, RFID, Wi-Fi, or cellular data to create a virtual fence. Sends SMS texts, push notifications, emails, or social media ads when users enter the area.
- Major Platforms: Google, Meta (Facebook), X (formerly Twitter), and Snapchat support geofencing.
- Benefits: Increases click-through rates, boosts sales through impulse buys, prepares orders as customers approach, gains competitive advantage, adjusts prices based on foot traffic, and enables collaboration with nearby businesses.
- Implementation: Understand your audience with keyword tools, social media, and surveys. Define clear campaign goals. Set up geofences based on location specifics. Personalize messages with time-sensitive offers and notifications.
- Key Metrics to Track: Track impressions, click-through rate (CTR), website visits, app visits, calls, online orders, and walk-ins.
