The concept of geofencing might’ve started as a GPS-based tracking application but it became a marketing technique soon after. The idea is simple: choose a geographically-based area and focus marketing campaigns within those boundaries. For digital marketers, geofencing campaigns open up a whole new world of possibilities.

Benefits of geofencing marketing campaigns in a dealership setting include the ability to target regions near the store or a neighborhood that has affluent car buyers. When someone crosses into the area you’ve targeted, ads on their social media feeds can give you the impressions and clickthroughs you need to drive added sales and fixed operations revenue. 

Common practices for geofencing campaigns can include creating a fence around an office building that employs high-income earners or the demographic that your team finds easiest to convert.
It can be certain events or college campuses, all with easily identifiable audiences.  

But if you haven’t seen it already, it can be used in targeted campaigns against your store by other dealerships. It’s actually a rather ingenious practice that can pull high-intent customers away from your store.  

How the competition could be using geofencing 

Imagine you have a direct competitor just five miles away that sells the same franchise. When a customer is at your store, engaging with your staff, playing on their smartphone while a salesperson grabs the keys for a test drive, they see an ad from your competition miles away that promotes a blockbuster clearance sale. There’s a seed of doubt planted, making it harder to close the deal until they check out the competition. 

It’s quite possibly a geofencing campaign. It’s possible that your direct competition has set up a ‘fence’ around your perimeter, picking off ready-to-buy customers. It could also be happening by other dealers nearby that sell different brands, coercing your customers to come test their metal. 

Although it’s virtually impossible to trace its efficacy through geofencing-based ad campaigns since it’s more impression-based than clickthrough, there’s no doubt that the psychology behind it is sound. SO how can you combat it? 

Identify the opponent 

For dealers, the first thing to do is determine if you’re being geofenced. Ideally, have a family member or friend visit the dealership and browse their social media, identifying any car or dealership ads that come up. If there are ads from local dealers, same-brand or off-brand, it’s possible their either running a localize ad or a geofencing campaign on your lot. 

Since you can’t see the back end of the ad, it’s difficult to know what type of campaign it is. Establishing a trend offers the most accurate conclusion.  

Fight fire with fire 

Fight back against other dealers invading your space with their marketing. It involves a two-tiered approach:  

  • Flood your customers with YOUR information. It may seem redundant, but create localized or geotargeted campaigns that include your store. Whenever they see your ad in their social feeds or in a browser, it takes away the opportunity for another dealer to take your place.  
  • Target your competitors. As with any effective strategy, put it to use for yourself. Establish localized and geofencing campaigns around dealerships near you as well as any same-brand dealers within the area you want to service primarily.  

Almost all online campaigns are an attempt to undercut on price, though, so it has the potential to affect your PVR. Your best option for fighting against other dealers trying to steal your customers is to emphasize the customer service and experience that goes hand in hand with your competitive pricing. 

Did you enjoy this article from Jason Unrau? Read other articles from him here.

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