Geo-fencing is a term that has been around for a while in the logistics and fleet/employee management world, historically describing the virtual areas that a company car was allowed to be driven or an employee was allowed to traverse. Companies would track employees and property using GPS beacons, transmitting their coordinates, and making sure that they fall within the virtual boundary outlined on a map.
These days, the term has evolved into a broader area of technology, meaning any transition through a virtual boundary. It can be tracked using a GPS transmitter, like those on trucks, or other smaller methods, like mobile smart phones. Devices these days with GPS receivers and internet connectivity can use software to pinpoint a users location, as well as cell-tower triangulation to get pretty close.
How does this fit in with marketing? Location is the new black. Pushing offers, sending messages, alerts and reminders that are contextually relevant, sharing with friends nearby, finding social connections nearby and a myriad of other uses. Information on demand--- before the customer knows they want it. Imagine if you're walking down the street, having opted-in to receive offers from Shoppers Drug Mart. You get a txt message that reminds you that your spouses birthday is one week away and you can get a Birthday card at the shoppers coming up on the right and get 3X bonus Optimum Club points. Finally, you're getting timely reminders, to the right channel (mobile) at the right time (social context of a birthday coming up) in the right place (location just up the street for purchase) with the right offer (they know I'm an avid collector and know the right lever to get me to purchase). This is marketing that you actually want.
Sure, it's great to find out that Starbucks is having a 10% Off offer when I check in to a Foursquare location near a Starbucks-- but we're missing a few points. The point of Geo-fencing is that I will only get that message when I enter the 'Send Zone' and those zones are only tight radii surrounding store locations. Relevance becomes everything.
How else can we use Geo-Fencing? Sure, retailers have a natural solution-- customer approaches store=blast offer, but what about CPG brands, non-profits, government, schools, service providers, and other users of mobile? Is a Geo-fence right for everyone? Nope. Just like billboards aren't right for everyone, a mobile Geo-fence program isn't right for every use either. It's all about the location of the user, not the location of the marketer.
Think about what you would want your ultimate customer/user to know and when you want them to know it, and WHERE you would want them to know it. Then work backwards from there.
If I'm in the Skin Care business, pushing a new and innovative sunscreen, maybe my focus isn't the selling, but a service? Maybe I geo-fence all the beaches and parks in my market, and when my customers enter a fenced zone I message them with the current UV rating for that area and a sunscreen recommendation.
If I'm in the retail business, maybe I set up a Geo-Fence around my biggest competitors stores, so that I can send extremely lucrative offers (like, really crazy stuff) to my opted-in customers, but ONLY when they're shopping in my competitors locations? How's that for a retention and loyalty program?
The sky is literally the limit with location. Creativity and user experience that is memorable and more importantly useful, will keep your customers happy and satisfied with your brand.