Driving Sales: How to Use Geofencing to Target Your Ideal Customers at Your Dealership


The Power of Geofencing for Dealerships

As a dealership owner, you’re always looking for ways to reach and connect with potential customers. With the rise of technology, there’s a new tool at your disposal: geofencing.

Geofencing is a location-based marketing strategy that allows businesses to send targeted ads or messages to users who enter a specific geographic area. By setting up a virtual “fence” around your dealership’s location, you can target users in the surrounding area with customized ads that are relevant to their interests and needs.

How Does Geofencing Work?

Geofencing works by using GPS or RFID technology to establish a virtual boundary around your dealership’s location. When a user enters this boundary, they trigger an action on their mobile device, such as receiving a push notification or seeing an ad in their social media feed. The boundary can be set up in various shapes and sizes, depending on your preferences and goals.

The Benefits of Geofencing for Dealerships

One of the biggest advantages of geofencing is its ability to reach potential customers at the right place and time. By targeting users who are physically near your dealership, you can increase the likelihood that they will visit your location and make a purchase. Additionally, geofencing allows you to personalize your marketing efforts based on user demographics, interests, and behaviors.

This means that you can create more effective campaigns that resonate with potential customers on a deeper level. Another benefit of geofencing is its cost-effectiveness.

Unlike traditional advertising methods like TV or radio commercials, geofenced ads only target users who are within the designated geographic area. This saves you money and ensures that your advertising dollars are being spent wisely.

Geofencing is an innovative marketing tool that can help dealerships reach potential customers in a more personalized and effective way. By setting up a virtual “fence” around your dealership’s location and targeting users in the surrounding area with customized ads, you can increase foot traffic to your location and ultimately drive sales.

Setting up Geofencing

Choosing the Right Location to Set Up Geofencing

When it comes to setting up geofencing for your dealership, location is everything. You want to make sure that you are targeting an area where your potential customers are likely to be.

One strategy is to select a location based on proximity to competitors. For example, if there is another dealership across town that sells similar vehicles, you may want to set up a geofence around their location.

Another consideration when choosing a location is foot traffic. If your dealership is located in a busy shopping center, creating a geofence around the entire complex could be an effective way of reaching potential customers who may not have originally intended to visit your dealership.

Selecting the Appropriate Radius for Your Dealership’s Geofence

The radius of your geofence determines how far out from your dealership’s physical location you will be targeting potential customers. A larger radius will reach more people but may result in less relevant leads, while a smaller radius will result in more targeted leads but fewer overall impressions.

When selecting the appropriate radius for your dealership’s geofence, consider factors such as population density and traffic patterns. For example, if you are located in a densely populated city with heavy traffic, a smaller radius may still provide ample opportunities for exposure.

Creating a Custom Geofence Using a Geofencing Tool

Creating a custom geofence allows you to tailor the size and shape of your targeted area based on specific criteria such as street boundaries or major landmarks. There are many online tools available that allow you to create custom geofences with ease.

When creating your custom geofence, consider using natural barriers such as rivers or mountains as boundaries. This can help ensure that only relevant users within your desired area receive ads and eliminates the possibility of ad waste.

By creating a custom geofence, you can ensure that your advertising efforts are reaching the right people in the right place. This can help drive traffic to your dealership and increase sales.

Targeting Your Audience

Identifying Your Target Audience

One of the primary benefits of geofencing is that it allows you to target customers who are in close proximity to your dealership. However, it’s not enough to just target anyone who happens to be nearby.

To maximize the effectiveness of your geofencing campaign, you need to identify your target audience based on a variety of factors, such as location, age, gender and interests. Start by analyzing your dealership’s customer database and identifying common characteristics among your most loyal customers.

Are they typically younger or older? Do they generally have high incomes?

Are they interested in specific types of cars or services? Once you’ve identified these commonalities, use this information to create a buyer persona for each segment of your target audience.

Creating Tailored Ads

Once you’ve identified your target audience(s), it’s time to create tailored ads that appeal specifically to their needs and preferences. This is where having a strong understanding of each buyer persona comes in handy. If one segment of your audience is primarily interested in luxury cars, for example, then you’ll want to create ads that highlight the features and benefits associated with luxury vehicles.

Similarly, if another segment is more price-sensitive, then you’ll want to focus on promoting deals and incentives that will appeal specifically to that group. It’s also important to consider the timing of your ads – for example, promoting winter tire specials during the colder months when drivers are more likely to be thinking about their safety on the road.

In addition to tailoring the content of your ads based on customer needs and preferences, make sure all creative elements – such as images or videos – are eye-catching and attention-grabbing. Remember: you’re competing with other businesses for customers’ attention while they’re out and about.

Key Takeaways:

  • Identify your target audience by analyzing your dealership’s customer database.
  • Create a buyer persona for each segment of your target audience based on common characteristics.
  • Tailor the content of your ads to appeal specifically to each buyer persona.
  • Consider timing and creative elements when creating ads, such as promoting winter tire specials during colder months or using eye-catching images or videos.

Measuring Success

Geofencing is a powerful tool for targeted advertising, but it’s important to measure the success of your campaigns to ensure you’re getting the most out of your investment. Key metrics to track include click-through rates (CTR), conversions, and return on investment (ROI).

CTR is a measure of how many people clicked on your ad after seeing it. A high CTR indicates that your ad is relevant and engaging to your target audience.

To calculate CTR, divide the number of clicks by the number of impressions (i.e., how many times your ad was seen). A good benchmark for CTR varies by industry, but generally falls between 0.5% and 2%.

Conversions are actions taken by users after clicking on your ad, such as filling out a form or making a purchase. Tracking conversions helps you understand which ads are driving actual business results.

To track conversions, set up conversion tracking within your advertising platform or use third-party tools like Google Analytics. ROI measures the return on investment for each campaign.

It’s calculated by subtracting the total cost of running the campaign from its total revenue and dividing that number by the campaign cost again. This will give you a percentage that represents how much profit you made for every dollar spent on advertising.

Tracking Metrics

To effectively track these metrics, make sure you have conversion tracking set up within your advertising platform or use third-party tools like Google Analytics. Use utm_source and utm_medium parameters in URLs to better understand where traffic is coming from. Monitoring metrics in real-time can help you optimize campaigns mid-flight based on their performance relative to KPIs (key performance indicators) such as click-through rates and conversion rates.

Analyzing Data

Once data has been collected over time, take some time to review it in order analyze patterns that may be emerging. Consider using data visualization tools, such as charts or graphs, to help provide a visual understanding of the numbers.

Use data to identify trends and patterns that can be used to optimize future campaigns. For example, if a specific ad is consistently under-performing in terms of click-through rates or conversions, consider adjusting its targeting or messaging.

Optimizing Future Campaigns

Based on your analysis of the data, make adjustments to future campaigns in order to optimize their performance. This could include tweaking messaging and targeting parameters like location or demographics, changing ad formats and styles, or targeting higher-engagement users for retargeting ads.

Measuring success is essential for any geofencing campaign. Tracking key metrics such as click-through rates (CTR), conversions and return on investment (ROI) helps you understand whether your advertising dollars are being well spent while giving you the opportunity to make adjustments so that you can increase your campaign’s effectiveness over time.

Keep an eye on metrics in real-time so that you can optimize campaigns mid-flight based on their performance relative KPIs such as click-through rates and conversion rates. Use data collected over time to analyze patterns emerging within your campaigns so that you can create better-targeted ads moving forward.

Best Practices

Keeping ads relevant and engaging

One of the most important best practices when it comes to geofencing for targeted advertising at your dealership is to keep your ads relevant and engaging. This means tailoring your advertisements to the interests and needs of the people within your geofence.

For example, if you’re targeting customers who live in an area with high traffic, you might want to focus on ads that promote fuel-efficient vehicles or offer free maintenance services such as oil changes. Another way to keep your ads relevant is by using dynamic creative optimization (DCO).

DCO allows you to create multiple versions of an ad that can be served based on the user’s location, behavior, or other factors. This ensures that each customer sees an ad that is personalized and tailored specifically to them.

Avoiding over-targeting or spamming potential customers

While it’s important to target specific audiences with your geofencing efforts, it’s equally important not to overdo it. Over-targeting or spamming potential customers can quickly turn them off from your dealership entirely.

Instead, focus on creating a balance between targeting specific audiences and reaching a broader demographic. To avoid over-targeting, consider limiting the number of times someone sees an ad within a certain timeframe.

You could also use frequency capping tools within your ad platform to ensure that users aren’t bombarded with too many ads in a short period of time. Additionally, make sure that the content of each ad is different enough so that users don’t feel like they’re seeing the same thing repeatedly.

Staying up-to-date with changing technology and trends

It’s crucial for dealerships using geofencing for targeted advertising to stay up-to-date with changing technology and trends in their industry. The world of digital marketing moves quickly, so it’s essential to be aware of new tools, platforms, and strategies as they emerge. Make sure you’re always evaluating the success of your geofencing campaigns and adjusting your tactics as needed.

Consider attending industry conferences or webinars to stay informed about the latest trends in digital marketing. You may also want to work with a digital marketing agency that specializes in geofencing and other targeted advertising tactics to ensure that you’re staying ahead of the curve.

By following these best practices for using geofencing for targeted advertising at your dealership, you can create highly effective campaigns that generate leads and increase sales. Remember to keep your ads relevant and engaging, avoid over-targeting or spamming potential customers, and stay up-to-date with the latest technology and trends in your industry. With a little bit of effort and attention to detail, geofencing can be a powerful tool for driving business growth and success at your dealership.


Geofencing is an incredibly powerful tool for dealership owners looking to target their advertising more effectively. By creating a virtual fence around your dealership and using it to deliver relevant ads and promotions to potential customers in the nearby area, you can increase foot traffic, drive sales, and build your brand. One of the biggest benefits of geofencing is its ability to reach customers at the right time.

By delivering ads when customers are most likely to be in shopping mode, you can increase the chances of them visiting your dealership over a competitor’s. And with mobile devices accounting for an increasingly large percentage of all online traffic, geofencing is more effective than ever before.

Another advantage of geofencing is its targeting capabilities. By setting up a custom perimeter around your dealership and narrowing down your audience based on location, demographics, interests, and behavior patterns, you can ensure that your messages are being delivered to people who are most likely to be interested in what you have to offer.

Geofencing gives dealerships the ability to track their campaigns with a high degree of accuracy. By monitoring key metrics like click-through rates, conversions, and ROI on an ongoing basis and making adjustments as needed based on this data, dealerships can optimize their campaigns over time for even better results.

Geofencing is an essential tool for modern dealerships looking to stay competitive in today’s fast-paced digital landscape. Whether you’re just getting started with targeted advertising or looking for ways to take your existing campaigns to the next level, be sure to explore how geofencing could benefit your business!

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