Collecting data about your customers and potential customers is quite important, but some of that data is going to be more useful than others. One of the most useful types of data for today’s business is geographical data. This is especially true if you run a brick and mortar store rather than a purely eCommerce business. Being able to target customers who live within a specific radius of your store can be incredibly helpful. But that’s not the only reason geographical data can help you reach a better audience.
Schwan’s and Geographical Data
One company that makes use of geographical data is Schwan’s, a frozen food delivery company. Schwan’s has made use of geographical data for quite some time. One of their earliest ways of marketing using this data was in what’s known as customer suppression. This may sound like a negative tactic, but it actually has nothing to do with suppressing customers themselves. Rather, it involves suppressing data the company already has for a geographical area so that they aren’t spending time and resources on marketing to people who are already their customers.
Schwan’s worked with Media Horizons to integrate all of the data they had collected online and through meeting with their customers on a regular basis. By doing so, they were able to see what customers already had exposure to their brand. For online marketing, this allowed the company to target those who weren’t familiar with Schwan’s more easily. By doing so, the company was able to reduce its customer acquisition costs by 65%, a very significant savings.
Geographical Data Reveals Other Demographics
Think about where you live. If someone asks you questions about certain parts of that town or city, it’s very likely you could tell them something about the people who live there. You might be able to say that the neighborhood is fairly wealthy or that one part of town is predominately rental property where college students live. Knowing where a customer lives may provide you with information about their race, income level, and other demographics that can be useful when deciding if you want to target that neighborhood with a marketing campaign. In some cases, all you really need is someone’s zip code in order to know if they should be a part of your targeted segment or not.
You Can Determine Past and Future Behaviors
Another way of using geographical data is to determine a location’s past and even future behaviors. This is used in elections all the time. Experts look at the voting history of a district to determine if that district will go to the Democrat or Republican candidate. Sometimes they’re right, and sometimes their prediction is off. Using data, though, allows them to make a much more educated prediction than they could without information.
You can use geographical data to also determine behaviors if you have enough information. Having just a year’s worth of data may not help you make very accurate predictions, but five years’ worth might. You can look at this information to get an idea of things such as when families start having children or move into the neighborhood. You may even be able to determine at what age someone starts shopping at your store.
Schwan’s routinely sends out surveys to customers to receive feedback on their service and their products. Once these surveys come back, the data is analyzed and can be used to predict what new products customers may want. Schwan’s also uses this information to get a good idea of what inventory their trucks should carry and which new areas might respond more favorably to certain products.
Likewise, the data may show that some areas are no longer as interested in the services Schwan’s provides. By pulling back, the company can better focus its time and resources to help current customers. At the same time, this information may be used by the marketing department to start an outreach program to these customers, former customers, and potential leads. It’s possible this decrease in sales isn’t due to customers leaving Schwan’s but to many new customers moving into the area. A new marketing campaign in the area may reach new customers or convince former customers to return.
What Can You Do with This?
After you’ve used geographical data to extrapolate these other factors, what do you do with that information? The best thing to do with it is to create multiple segments and marketing campaigns aimed at very specific people. Instead of sending the same mailer to everyone in a neighborhood, consider creating specific mailers for certain individuals. If you see that your product is mainly purchased by women over age 40 who live in the area, only send mailers to them. There’s no need to waste the materials and postage cost on those who aren’t in that segment because you’re likely to see very little conversion.
Schwan’s engages in these campaigns from time to time to reach out to new audiences. For example, housing records are public information, so the company could purchase a data set that includes addresses for homes that have been sold within the past year. Launching a campaign for the geographical areas with the largest number of records in this data set could attract a large new audience.
