Geofencing And Beacons: Capturing The Lost Customer

By James Carlini | Oct 15, 2017
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Years ago, I talked about capturing the lost customers in regional economies and creating a more vibrant local economy across multiple venues. For example, you have one venue that is generating a lot of daily customer traffic. Let’s say it is a conference/convention center. It gets 10,000 people to come in for a convention.

How do we keep these people around to patronize the surrounding businesses and restaurants around the convention center? How do we get them to stay and spend some money instead of driving back to where they came from?

Most of the time, you get 10,000 people to come to an event, and the same people leave after the event happens. If we could capture a good percentage of those people, look how we could improve the local economic environment. If we could capture just 25­–30 percent of the crowd and send them to different venues for a free appetizer or some two-for-one drinks, look how much more business the restaurants and bars would do. Look how much more sales tax revenues the municipality would get from the increased amount of sales. It definitely creates a win-win situation for the businesses as well as the local municipality.

All of this capturing the lost customer concept can be implemented electronically today by understanding how to set up electronic geofencing and beacons to communicate to people’s smartphones and establish cross-marketing to additional businesses to them to patronize. In effect, you create a “virtual resort.”

New approach to the crossmarketing of products and services

There is a whole new way to electronically market to customers’ smartphones when they walk into a convention center or a retail mall or any multivenue business campus. There are new electronic devices to install in order to build out what I call the “virtual resort.” Just like in a resort, you want all the customers to stay within the resort’s defined perimeter and spend their money inside the resort. Geofencing and beacons can produce that same effect electronically, and you can promote the other surrounding businesses.

Geofencing sets up a perimeter where, as soon as you walk or drive through it, it knows you’re there and can send your smartphone an e-coupon or some other electronic notice of a special discount. Some stores are already doing that. You walk into the store, and your smartphone gets a notification that there is a special sale or that, if you spend $100, you can get another $30 off your purchase. (Functionality such as this requires users to have the store app on their smartphone.)

You can see how that would work in a single-store environment. Now, let’s get creative and see how that could work in a multiple store/multiple business environment.

You go to the convention center for a tradeshow or the stadium to see an event and you get several e-coupons for businesses adjacent to the event for food and drinks or even merchandise for that day only. Once you do a transaction with one of those venues, they may ask you if you want to join their customer list, which is nothing more than to get you to subscribe to their contact program.

Maybe you only go to that convention center once a year. If the businesses can entice you with some discounts and other incentives, maybe you will start going there a couple of other times a year. The more times you go down there, the more repeat business they get. You can see how this can potentially add to substantial increases in sales and revenues.

Beacons are just a way of defining a location. A beacon sends out a continuous signal telling you “here I am.” Think of a beacon as sort of a sensor or trigger that, once you locate it, your smartphone reacts to it and performs some other operation like accessing a database or application. For example, you walk into a Macy's store, and when your smartphone detects the beacon, it accesses the Macy’s app and tells you there is sale going on.

One company defines a beacon as sort of a lighthouse, always sending out a continuous signal, “I am here… I am here… I am here.” It is a passive device with no data-gathering capability. It is just there to define a location. Look at beacons as defining a specific or small area like a single store or even a department within a store and geofences as defining a larger area, like the north section of a Mall or a business section of downtown.

By using geofencing and beacons, municipalities and business venues can create a whole different level of economic development and cross-marketing capabilities to increase business and generate more sales tax revenues. We are only at the beginning stages of implementing this for companies and municipalities that are first adopters.

The faster you understand the benefits of setting something like this up, the faster you will be able to offer to install these types of systems to your customer base.

About The Author

James Carlini, MBA, is a strategist for mission-critical networks, technology and intelligent infrastructure. He has been the president of Carlini & Associates since 1986. He is author of "LOCATION LOCATION CONNECTIVITY," a visionary book on the convergence of next-generation real estate, intelligent infrastructure, technology, and the global platform for commerce.

His “Platform for Commerce” definition of infrastructure and its impact on economic growth has also been referred to by the US ARMY Corps of Engineers in their Handbook, “Infrastructure and the Operational Art.” (2014)

His firm has been involved with applying advanced business practices, planning and designing mission critical network infrastructures for three decades.

He served as an award-winning adjunct faculty member at Northwestern University’s Executive Masters and undergraduate programs for two decades (1986-2006).  He has been the keynote speaker at national and international conferences.

He also appears in civil and federal courts as well as public utilities commission hearings as an expert witness in mission critical networks, network infrastructure and cabling issues.

He began his career at Bell Telephone Laboratories (real-time software engineering), AT&T (technical marketing & enterprise-wide network design support for major clients) and Arthur Young (now Ernst & Young, Director of Telecommunications & Computer Hardware consulting).

Contact him at [email protected] or 773-370-1888. Follow daily Carlini-isms at





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