What 'geo-fencing" is -- and how it can help your business

"Let’s go invent tomorrow instead of worrying about what happened yesterday." ~ Steve Jobs

Geo-fencing is a new technology that can really make a difference in your business. In simple terms, geo-fencing allows you to target customers with smartphones within a geographic area you select. It allows you to push notifications to your customers using a mobile app of your choice.

For example, a dry cleaner could establish geo-fencing boundaries around their store and send customers notice that their dry cleaning is ready to be picked up when they cross into that area. Or, for another example, the restaurant The Village Inn could push out offers for a free piece of pie to clients in the neighborhood.

Another application of this technology is being used with people under house arrest. If the individual with an ankle bracelet moves outside the area they are confined to, it lets their probation officer know.

As promising as this technology is, there are a few issues with it. First, your customers have to be willing to receive your notifications, and it can be a tremendous drain on their battery life and data because their phones must continuously check locations to see if they are inside a geo-fenced area. One possible solution here is network-based geo-fencing, which uses carrier locations rather than phone GPS. Although network-based geo-fencing is slightly less accurate, it does not drain your customers’ batteries, and it works on all phones, not only smartphones.

A second challenge is the cost of building an application that uses geo-fencing technology. That can run anywhere from $50,000 to $150,000. However, it may not be necessary to reinvent the technology as newspapers and marketing firms typically offer already-established systems. This really brings down the cost of utilizing this technology.

“Beacons” are another option. These are low-energy devices that use Bluetooth signals to detect a customer’s location and send them a notification.

So what does all this mean? Simply that technology like geo-fencing, even though it is in its embryonic stage and undergoing constant evolution, is going to change the way businesses interact with their customers.

Knowing the potential benefits of geo-fencing, I recommend all business owners do a cost-benefit analysis to see if this new technology is right for your operation. You might not want to get on board now, but it really is worth researching and considering.

Now go out and learn a bit more about this technology. Collect information and get some quotes so you can determine whether you want to use it now or wait until it matures.

You can do this!

Dr. Osteryoung has directly has assisted over 3,000 firms. He is the Jim Moran Professor of Entrepreneurship (Emeritus) and Professor of Finance (Emeritus) at Florida State University. He was the founding Executive Director of The Jim Moran Institute and served in that position from 1995 through 2008. His newest book co-authored with Tim O'Brien, "If You Have Employees, You Really Need This Book," is a bestseller on Amazon.com. He can be reached by e-mail at jerry.osteryoung@gmail.com.

Tags: Florida Small Business