Ditch the spread sheets! When it comes to understanding your customer base, maps can show you the way to increasing sales
If you walk into a Tesco in Knightsbridge and a Tesco in Cleethorpes, the two will not look the same. This won’t be because of the personalised preferences of the manager sorting the layout one Friday night, or because the delivery of the bread always comes before the biscuits.
It’s because Tesco has swathes of data informing them about both the area, the demographics, and spending habits of the locals which it uses to create optimal layouts. These layouts speak volumes about the people making their way around the store, and cleverly boost sales for each store.
“Tesco does a huge amount of work around demographics because they know how demographics can help to sell products,” says David Hodgkinson, principal advisor in KPMG’s Customer & Channel Management practise.
“Tesco scours the country working out where to put its next stores. It’s no accident when a new Tesco store pops up on your drive towards Morrisons or Sainsbury’s.
“Big retailers have it down to a fine art.”
The intrinsic value of data
The value of data has started to slip into the public psyche.
Google and Facebook have been hitting the headlines with regards to their use of data and suddenly consumers are waking up to the fact that with the free services they use, they are the product – as information they freely give is sold to advertisers.
But as we have seen with Tesco and other big retailers, it’s not just the internet giants that can find infinite value in the collection and analysis of data.
No matter what your business, collection and analysis of customer data can boost sales, help save money where necessary, and help you make informed decisions.
“We work a lot with the financial services, especially banks, and they are very interested in area dynamics and how groups of people in certain places use their services,” says Mark Guinibert, customer & channel partner at KPMG.
“We have had a lot of conversations with banks about not having a ‘one size fits all’ attitude towards branches. Looking at customer and local data can show whether the area is more suited to a small self-service branch or whether they need a more personal service.”
How to collect data
There are many kinds of data that you can collect about your customer data base. For the purposes of this article (and in the interests of not writing a thesis) I’m going to focus on regional data.
Regional data helps you assess where your customers and your assets are in relation to each other, to competitors, to untapped resources, to transport links, and so on. Keeping on top of this kind of information can help you in various ways…
Clusters of customers
When assessing your customer base, finding out where they live (or work) is highly useful. This can help you to establish if there are customer hotspots which could help you to focus marketing towards a certain area – such as direct marketing or even billboard advertising.
It will also help you to understand the affluence of your customers: use a service like Zoopla.com to look at the average house price of the area and you’ll have a better idea about the demographic you’re dealing with.
It can also help you to see the groups of people that you aren’t reaching so you can come up with a plan to target them.
Collecting the data: If you don’t naturally obtain addresses through order forms you can try targeting customers with loyalty cards, competitions, surveys etc.
Footfall figures look at the amount of pedestrians who walk through a certain area.
If you’re setting up a customer-facing business that relies on passing trade, being able to predict footfall will help you determine the location of your business – or whether you need to move to capture more potential customers. Clearly, the higher the footfall of an area, the more chance you have of a passer-by wandering into your premises.
By examining footfall you also can establish how busy you are likely to be throughout the year, month, and even day. If there are daily or seasonal peaks you can ensure that you’re prepared with appealing window displays, or, for example, promotional staff handing out samples on the street. You can also plan how many staff you are likley to need on-site at any given time.
Collecting the data: Footfall figures can be obtained from the British Retail Consortium’s Retail Sales Monitor. Other sources are your local Regional Development Agency, Chamber of Commerce or council.
Understanding transport infrastructure in your area of business is essential. It can help you to plot delivery routes, establish how easy or difficult you are to find from a customer’s perspective, and determine whether you need to invest in customer parking spaces if you are difficult to access.
With London 2012 approaching fast, this could take on a whole new level of importance as traditional routes for suppliers and customers are disturbed. Of course, the same could apply when road works and station closures impede customer and supplier journeys.
You can also combine your postcode data with geographical plotting to discover how far customers are willing to travel to visit you – are they walking long distances from the centre of town, or driving far from home? In other words, are you a destination business? And if not, how can you become one?
Collecting the data: Download Ordnance Survey’s free guide to using OS OpenData mapping data now.
Understanding how to use and analyse your data
“Companies need to look at what they collect and how they use it,” says Guinibert.
“We’ve seen it only too often, especially within the financial services, that a lot of data is gathered but it is not used. The information is not made available to the people within the company that can make valuable use of it.
“It’s generally a structural issue. Without a plan in place it can be very hard to use the data to build an overall picture of the customers and the geographic areas.”
Looking at information on a spread sheet is more likely to make you dizzy than give you invaluable insight into your customer base.
In large part, analysing data is all about identifying trends and points of consistency. There are a lot of Customer Relationship Management software packages that can help you to break down data from a variety of sources, pinpointing common themes and other useful information.
Mapping out your data and overlaying data sets to give you a geographical perspective is extremely helpful.
Ordnance Survey offers a free service which allows you to utilize their geographic intelligence in order to get a clear picture of your customer base.
It offers maps relating to postcodes, street maps, electoral boundary maps – a whole plethora of data which combined with your own information can help to map out your data visually.
“Location based data is extremely important,” explains Hodgkinson. “It’s the basis of a lot of in-depth customer analysis.”
It can mean putting your new store in the best possible place, better mapping out delivery routes, getting a clear picture of where your customers are and where perspective clients are to be found.
If you have as much information about your customers as possible, you can sell without giving people the feeling that they are being sold to, by offering what they need and want.
With the right kind of plan and the right kind of software your business will become a whole lot more effective.
This article was brought to you in partnership with Ordnance Survey, our Financial Services Rankings Partner