Insight/ Analysis & Measurement

Energize Your Analytics With Location Data


by Linda Hecht

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Article Highlights:

  • When you add location to your analytics, you are able to see a complete picture.
  • Automated clustering, heat maps, data aggregation, and color-coded mapping allow you to churn your records into something of value.
  • Geo-enrichment involves looking at demographics and lifestyles by region or location.

It’s a great time to be a marketer. More data—mounds and heaps of data—are available for the taking from Web purchases, point-of-purchase databases, direct mail campaigns, online ads, and other targeted digital marketing techniques.

The result? Businesses of all sizes—and in every industry—can make better decisions after careful analysis.

But better doesn’t mean flawless. While a litany of tools, databases, and dashboards are available to help marketers make sense of their accrued data, blind spots still exist. Location, which persists in more than 80 percent of data, certainly falls into that category.

What do I mean? Prospects, customers, constituents, suppliers, partners, and staff all have a location. Resources and assets have a location. Location data is becoming even more pervasive with the ubiquitous use of mobile devices and social media. And what’s exciting is the pervasiveness of what we’re talking about: Location analytics benefits every specific industry you can image.  

In today’s ultracompetitive marketplace, brands and their marketers can use location analytics to boost their success by carefully listening and responding to what customers really care about. Marketers can effectively identify and visualize where customers are by analyzing demographic, psychographic, purchasing, and spending characteristics. They can perform better segmentation that charges efforts to find more customers like them.

Using location, marketers see a more accurate picture at a precise, granular level. In turn, they can become more agile. Customer databases, for example, are inherently geographic. Every transaction contains vital location information that can be used to identify your customers and their unique buying habits. Recognizing patterns and trends among your customer base helps create a perfect picture of what your prospective customer looks like. You can then tailor campaigns and messages to touch existing and prospective customers both rationally and emotionally.

Many business professionals are completely unaware of the value that location analytics offers. If they do perform some type of geographic marketing analysis, it’s typically in the form of simple data mapping. But there are much more powerful marketing methods to employ.  

Four key concepts—I’ll call them imperatives—of location analytics can help determine where you are and what possibilities exist.

1. Go beyond basic maps: Maps tell a great story based on your hard-fought data. But it’s not the complete picture and can even lead marketers astray. For instance, if you attempted to map millions of customers to a region, the map becomes useless. It’s too much data that obscures your marketing objectives. But powerful techniques—such as automated clustering (linking similar dots together), heat maps (showing point density), data aggregation (combining data to regions), and color-coded mapping—allow you to churn your records into something of value. These techniques give you another level of analysis and results.

2. Enrich your world view: Geo-enrichment involves looking at demographics and lifestyles by region or location. You also can examine how those variables will change over time, and slice, dice, and analyze the data in new ways. For instance, your CRM data might tell you about customers, products, and purchase frequency, but it won't reveal lifestyle information for each customer or customers for a region. What are their hobbies? Life interests? Habits? Do they save for retirement or spend on vacations? Geo-enrichment data augmentation gives more precision to customize products and services locally and logically.

3. Perform map-driven analysis: Query and ask questions of your data, and use it as an analytical tool—from the simple to the scientific. You can drill into charts and graphs and make changes; the map updates to reflect the changes. You also can drill into your map and have the graphs and charts automatically update to reflect the geographic area you’re focusing on. You can perform spatial queries and select areas to study. Moreover, you can perform queries with geo-enrichment—as well as perform hot-spot analysis and modeling—to really dig deep into demographic data and see where goods are selling better than others.

4. Collaborate using maps: Maps are a wonderful communication medium. They serve as a common information language, breaking down departmental barriers and allowing marketers, sales personnel, analysts, and field staff to work from the same page. Location analytics lets you easily share maps you create, including interactive, dynamic maps; maps across mobile devices; maps in presentations (such as PowerPoint), and maps shared across business systems.

Putting your data on a map is great. You’ll uncover patterns that graphs and charts won’t reveal. But you can do much, much more to find and keep your customers. Location analytics brings a real charge to your marketing efforts. That’s what’s exciting—there’s so much yet to be attained.

About Linda Hecht

Linda Hecht is the chief marketing officer for Esri. Esri's geographic information systems (GIS) software is used in more than two-thirds of Fortune 500 companies.