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Cloning Your Best Customers - Can it Be Done?

Mar 09, 2012

If you keep good customer records - name, address, how much they've spent with you over a period of time - you can use simple GIS analysis to determine what your best customers have in common and where you can find more of them. Basically, GIS (Geographic Information System) analysis means utilizing maps to display and analyze various types of data.

 

A simple spreadsheet with the information I mentioned above can be used to create a map showing where your customers are located. After that, there are various tools that can be applied to learn more about these customers - the average household income for their neighborhood or how much they spend annually on the types of goods and services you provide, for example. There are also ways to find other areas of town that share similar characteristics with your best customers.

 

Think about it this way: if you run an auto repair shop, wouldn't you like to know if there is a neighborhood in town that spends an unusually high amount on vehicle maintenance every year? Wouldn't it be advantageous to be able to target a direct mail campaign to this neighborhood since you already know they're more likely to use your shop?

 

GIS Analysis can help you make these decisions. The process, at its core, is quite simple. First, your raw customer data (name, address, amount spent with your business) is represented geographically on a map. This gives you a basic idea of where your customers are. Next, there are a number of "layers" that can be placed on top of the map. Think of it like placing a sheet of tracing paper over a picture - you still see the picture, but you can add more to it by drawing on the tracing paper. These layers can contain a variety of data, but let's use annual expenditures on vehicle maintenance as an example. When this layer is applied to your customer map, let's say you notice a high concentration of customers in a "hot" area (one with above average expenditures on vehicle maintenance) and then notice another neighborhood in town with similar expenditures but very few of your customers. You've just found your next target for a direct mail campaign.

 

GIS analysis can be a powerful tool and can help you make informed decisions about your business instead of just guessing. Contact the Market Research Center at mrc@uwyo.edu to learn more.



Tags: GIS
Category: Market Research

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