Using Geographic Information in Marketing

Last Updated May 29, 2007 7:27 PM EDT

Geographical Information Systems (GIS) offer an innovative, user-friendly enhancement to database marketing. Special GIS software converts data into maps that show you where your customers are located and how customers in different locations may have different purchasing patterns. These insights can help you plan and measure your direct marketing, advertising, and other promotional campaigns, including testing approaches in different locations. GIS can also help you better manage your sales force and customer service operations.

What You Need to KnowWhy is customer location so important to marketing planning?

Knowing where your best customers and prospects are located allows you to target your direct marketing effectively and allocate budget and other marketing resources efficiently.

What's so special about GIS?

GIS offers a higher level of accuracy and allows you to integrate more complex data as a basis for planning regional sales and marketing activities. The software is extremely flexible, in that it can be used in conjunction with any data that has a spatial element, such as an addresses or ZIP codes. GIS software also enables you to analyze data at many different levels, making it a much more powerful planning tool.

Considering that we plan our sales and marketing programs according to market sector, would GIS have any benefit for my organization?

Many companies now align their sales and marketing resources by market sector so that they can provide their customers with customized service. Adding a geographic element can help improve productivity in customer service and make it possible to target locations where extra promotional effort may result in more sales.

What are the other uses of GIS?

GIS can be used to improve the location of retail outlets. If you're planning to open a retail branch, GIS can help you predict how many and what kind of products customers in a particular service area would be likely to buy—according to their age, class, and other factors. You can use the same data to help customers find you—for example, inviting customers to enter their ZIP code on a Web site to find the nearest retail outlet.

What to DoLocate Your Customers

GIS offers a relatively easy and quick way to pinpoint where your best customers and your most promising prospects are located, as well as reveal a great deal about their demographics based on their location.

If you have a database with addresses or ZIP codes or any other spatial references, GIS software allows you to show all of the locations on maps. Logistics and distribution specialists have been using GIS for many years, for example, to plan delivery routes. Now, you can use this same system to help you plan marketing, service operations, and more.

Classify Your Markets

GIS mapping can show you if particular products or services are more popular in some locations than in others. With this information, you can adjust your customer service operations for greater efficiency and more convenience for customers. You can realign your promotional efforts to capture additional sales.

Carry Out Test Marketing Campaigns

GIS allows you to test your marketing or advertising approach in a certain location before committing resources to a full campaign. You can test the offer, creative approach, response mechanism, frequency and timing, and other aspects of a campaign. The test campaign can be carried out on a representative sample of the target market, in a defined sales or geographic territory, or in a particular sector of the target market. You can conduct a split campaign, varying some aspect of the promotion from location to location.

GIS allow you to monitor the results of different types of testing with an unparalleled level of precision, providing informative, detailed maps. You can see exactly how certain marketing approaches work with certain target groups and modify your future efforts accordingly.

Assign Your Sales Force Using GIS

Many companies have a geographic sales structure, with sales representatives assigned to geographic territories. This system is simple to administer and saves the sales representatives travel time, but resources are usually allocated evenly among territories, rather than being directed to where the sales potential is greatest. GIS helps address this problem by targeting where sales resources should be directed—and can also identify where additional customer services resources may be required.

Integrate GIS with Call Data

Many telephone service providers can give you detailed information about customer calls coming into your organization: who called, when, and from where. Toll-free numbers can increase the number of customer call-ins as well as help you target where customers are calling from. Using GIS in conjunction with your telephone system, you can develop geographically based profiles of customers and prospects, which you can use to test market different promotional campaigns quickly and easily.

What to AvoidYou Focus on the Wrong Territories

GIS can help you avoid the common error of allocating sales and service resources evenly across territories, when you should be targeting territories with the greatest potential for increased business.

You Collect Insufficient Information

For GIS to be effective, you need to have customer and prospect information that includes a spatial element, such as an address or ZIP code. Make sure that you have an adequate system in place for gathering customer data, and that you capture the right geographic information to feed into GIS.

You Don't Realize the Full Potential of GIS

GIS can be used to plan and monitor sales performance, allocate retail resources, measure campaign effectiveness, and evaluate test markets. To take full advantage of these capabilities, you should integrate data from other sources, such as call records or campaign responses, so that you have a complete picture of the performance and potential of a territory.

Where to Learn MoreBook:

Longley, Paul A., et al, eds. Geographical Information Systems: Principles, Techniques, Management and Applications. Wiley, 2005.

Web Sites:

GIS.com: www.gis.com

Romeo, Jim. "Target Marketing with GIS." Geospatial Solutions, May 2005: www.tetrad.com/pub/documents/geospatial.pdf

Comments

CBSN Live

pop-out
Live Video

Market Data

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Market News

Stock Watchlist