The rapid growth of location based technologies presents many new opportunities for business operations and marketing strategies.

Geofencing is the practice of creating virtual perimeters around digital maps or models of real geographic locations. Often, these borders interact with the location services on an individual’s mobile device. One essential premise of geofencing is that an individual’s physical location can provide data that can aid in business operations and marketing.

With regard to business operations, geofencing can be used to ensure that workers are in the right place at the right time, and provide information to the workers that can help them accomplish tasks as efficiently as possible. Applications in the business operations space could include the following:

  1. Sharing economy - An online short-term vacation home rental service could program geofences around hosts’ homes to ensure that the rental process goes smoothly. When guests arrive, the host might be notified. When guests leave the home on their final day, they might receive a notification inviting them to write a review. If the guest never shows up, the customer service team can figure out what is happening.

  2. Delivery dynamics - A traditional national delivery company could program geofences around it’s typical routes. Using the driver’s mobile device, the company could detect if the driver says on course and provide support to drivers who do not stay within the designated area.

Geofencing

In addition to business operations, geofencing also has quite interesting applications in marketing in bringing in learning about customer segments, advertising to existing customers, and attracting new customers. Some use cases include the following:

  1. Great Graduations - Suppose a restaurant is located close to a university. Around the time of graduation or other major school events, the restaurant could create a virtual geofence around the event’s location and advertise event specific promotions on the web (for example, 15% off graduation brunch) though services like Google’s AdSense. Or the restaurant could create a custom, sponsored filter for social media that is geofenced around the designated location. This kind of event targeted advertising has proven success.

  2. Brick and mortar - Even if no events are taking place, brick and mortar retail locations can use geofencing to attract nearby potential customers. They can use notifications, filters, or other means of targeted advertising to promote their business and make sure nearby customers with preferences aligned with the store's offerings stop by the locations.

There are, however, some challenges to keep in mind when considering geofencing. For example, whenever tracking an individual's location companies must comply with privacy laws like GDPR and ensure that customers understand how their information is being used. Beyond this, legislators around the world, including those in the United States' Senate are considering requiring certain drone companies to incorporate geofencing into the software to prevent them from flying in certain locations. Thus geofencing in not only linked to business opportunities, but also regulatory issues that all businesses should be aware of.

Overall, even though there are some challenges, location tracking and geofencing does offer many promising use cases across many different domains of society and business.