Big Data in Action: Geo-Fencing

Oct 16, 2012

The rhetoric around Big Data has reached a fever pitch but little attention has been paid to its applications in the real world. The “Big Data in Action” series will showcase NewVantage Partners’ expertise into innovative applications that can help improve enterprise processes or products.

Geo-fencing is a relatively new technology that is being used by enterprises. For those that are unfamiliar, a geo-fence is a virtual perimeter for a real-world geographic area. These perimeters can be set up around any structure, store or location to identify people travelling through the area. This is a major boon for marketers as geo-fences can be integrated within Big Data initiatives to provide a clearer window into their customers’ behavior. The Holy Grail for marketers has been to gain a holistic understanding of each of their customer’s motivations in order to predictably influence their actions. Geo-fences represent the latest innovation in helping them reach that goal.

The process is relatively simple: organizations create an opt-in program whereby customers indicate they are open to receiving promotions on their mobile phones or devices. Marketers can then work with telecom carriers to set up a geo-fence around a specific location to push coupons or rebate offers to these consumers whenever they are within a set distance from one of their stores. These offers can be tailored to the customer’s past purchases for greater effectiveness; for instance, a home furnishing store could offer 30 percent off of a carpet that matches the drapes the person bought three weeks ago. Geo- fencing empowered with Big Data insights is a powerful tool that can be used to drive interest in future purchases.

Geo-fences also represent a giant step forward in measuring marketing effectiveness. Unlike standard advertising logic which emphasizes constant exposure to a consistent message on the Internet, radio, magazines and TV to motivate customers, real-time coupons provide a captive audience for a highly targeted – potentially personalized – offer. Marketers can track the time it takes a person to receive a marketing promotion to purchase the project to start building predictive models for consumer behavior that would greatly benefit future promotions. It’s a vast improvement in improving the targeting and adding transparency to the consumer feedback loop.

Mobile device data is a tremendous opportunity for marketers today. The vast majority of consumers are familiar with location-based applications and are open to receiving timely marketing messages if delivered in a timely manner. Big box retailers like Best Buy and Lowe’s are already using geo-fences effectively as a means to measure customer’s behaviors both in and out of the store and NewVantage Partners expects that trend to continue to grow as marketers refine their tactics.

By Harvey Koeppel

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