While many businesses are moving to an on-line economy, there are nevertheless a great number of product lines where simply being in the right place on the ground is, and will always be, important.
Is your business located in the right place? If it is, or you don’t have a choice to shift it right now, then what Customer opportunities are you missing? Do you know why your customers use you? And how can you find out?
One of the critical parts of business intelligence is finding out why your customers use you. You can create questionnaires and surveys but these are notoriously unreliable. Firstly people have to be committed to spending the time to fill it in, and secondly people often give the answers that they think you want to hear. Also if you haven’t asked the right questions you won’t get the right answers. Laslty, you can’t ask the people who don’t use you why it is so. However if you know your customer’s location, where they live or work then many of these questions can be answered for you.
A great way to visualise business data is through using spatial analysis tools to create new insights. In the case of this business we calculated the market penetration of the business’s target market demographics which can be visualised as a contoured map, such as the one shown. While there was some variance, the business exceeded 50% market penetration within 1.25 km driving distance. As the driving distance away from the business increased, market penetration dropped off at a steady rate to a distance of 4km clearly showing the importance of customer location to the business. Beyond this location played no part in the customers choosing to use the business, which accounted for 30% of the purchasers.
By identifying which customers are coming to you where your location plays no part in their decision gives you a source of information about why your customers are choosing you over your competitors, in this case the green dots.
Being able to segment and understand your customers using maps is going to give you a valuable edge over your competitors.
What is your customer profile? Who are the customers that you are targeting most?
Are they wealthy or poor? Old or young? Single or Partnered? Parents or Empty Nesters? Educated? Employed, Self-employed, Unemployed or Retired? Do they belong to a particular ethnic group? Using the Census data we can tell what proportion of the population meets your target market.
In an ideal world how often should your customers be purchasing your products? If you know where your customers live or work then it is possible to determine what your market penetration is and where. Which means you then have the insight on where to target your marketing, how much you have to gain (or retain) and how much you should invest in pursuing that market.
If you don’t know where your customers live or work then that becomes the first problem to solve. Fortunately this is a relatively easy to overcome and will give you a strategic edge over your competitors. And to do it before they get in first.