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July 12, 2022

Consumer Targeting: Geodemography and the Power of GIS

The concept of Place. It defines where you are now. It’s the marker that grounds every moment in your history. It’s the Alpha and the Omega of every trip you’ll ever take, whether you’re alone, brushing your teeth, needing groceries, or wanting to experience the proverbial “event-of-a-lifetime.” Place is constant and affects everything and everyone, and yet identifying the “right” place when it comes to marketing is a ubiquitous challenge for even the most experienced marketer.

“How do I find the best location for my business?”

“Where do I find people who are most likely to buy my product or service?”

“What communication channel will reach most of my customers?”

“Who are my nearest competitors and where are their customers coming from?”

The answer is DATA.

Geodemography is the branch of market research that assigns the attributes of small areas – usually neighborhoods – to the consumers who live within them and, based on this assignment, divides the consumer marketplace into meaningful segments that are locatable and reachable. Think “Birds of a feather flock together.” The discipline leverages spatial and mathematical patterns that define how people live and shop to help analysts make inferences about consumer behavior. The spatial aspect relates to mapping and the Graphic Information Systems (GIS) that brought location intelligence to business databases.

So why, in an age where it seems everyone is collecting and compiling their own customer information based on actual behavior would anyone consider using data that’s inferred? Why has the number of users and the range of applications for geodemographic cluster systems grown?

The answer is DATA.

According to the U.S. Small Business Administration Office of Advocacy small businesses make up 99.7% of U.S. employer firms and 49.2% of private-sector employment. Over three-quarters of small businesses are non-employers. Many small businesses simply don’t have the manpower or resources to make the collection of customer data viable and geodemographic data provides a reliable way to profile their customers in terms of demographics and behavior.

Among businesses that do collect customer data, it’s often incomplete. Except for financial services, customer income is usually not tracked nor is ethnicity, household size, presence of children, educational attainment, or lifestage. Geodemographics provides all this information and much more. Privacy is also a concern for businesses and consumers and geodemographic data is a privacy-compliant way to enrich transactional databases.

Geodemographic data can also help your business grow by defining your best potential customers based on a profile of your existing customers. Cross-sell, up-sell and retention strategies are all enhanced using cluster analysis and models supported by geodemographic data. Your business can take advantage of popular segmentation systems, such as PRIZM® Premier to understand, find and activate customers and prospects.

PRIZM® Premier defines every U.S. household in terms of 68 demographically and behaviorally distinct types, or "segments," to help marketers discern those consumers' likes, dislikes, lifestyles and purchase behaviors. Used by thousands of marketers, the PRIZM® Premier segmentation system provides the "common language" for marketing in an increasingly diverse and complex American marketplace.

The results of analysis using geodemographics and segmentation are actionable. Clusters are easy to understand, and the segments are uniquely positioned for direct marketing as well as mass targeting, which appeals to businesses regardless of product or service. Additionally, the results are measurable because marketers can tie segments back to the ground (ZIP Codes, stores, markets, sales territories, etc.), as well as to channels and to their own transactional data. Campaigns tied to segments can be measured and modified on an on-going basis.

FuelVM is a brand marketing firm with a solid data practice that brings your business over 20 years’ experience in geodemographics, segmentation, consumer profiling, and GIS. Your business can rely on us to provide comprehensive market insight for every B2B and B2C initiative. We don’t just provide DATA. We use DATA to help you grow your business and achieve your goals for sales and performance.

Need help? Get FUEL VM on it today.

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