The Geodemographic profile is a tool used as a predictor of purchasing behaviour that performs part of an organisations marketing and operational toolkit.
The marketing or advertising department will use the profile to determine when and where advertising should take place in order to achieve maximum results. The demographic makeup of the market should guide advertising content as well. In addition, localised marketing strategy can be customised per retail outlet. Companies with internal customer data can use geodemography strategically when overlaying customer data on top of market data. Understanding the differences between current customers and the total market provides marketers with the ability to target content specific campaigns at customers vs potential customers from the point of view of growing market share.
Operational departments will use profiling to better understand cannibalisation between stores, as well as to identify locations for new outlets. Any feasibility study or impact analysis should include the geodemographic profile for the catchment or geographic area, as a predictive modelling tool. Geodemographic profiles are useful to merchandisers as a guideline for what ranges to stock per individual outlet.
Caution! Geodemographic profiles of large geographic areas are generally too broad for business application. Its important to understand the local geographic area well enough in order to use the profile as a micro marketing tool. If the area being analysed is too large, any useful data trends or anomolies will be averaged out.
Unscrupulous slick sales people are doing damage to the GIS industry. By selling quick fix smart phone apps claiming GIS capabilities, with no statistically verifiable data, in fact, with no spatial data whatsoever. These charlatans are providing grossly averaged out findings that claim to be micro geographic. On closer scrutiny, none of the data is geocoded or micro-geographic. Neither is the digital marketing database that the said micro-geographic findings entice advertisers to purchase.
Therefore a retailer looking for location based demographic data relating to their catchment area, are receiving non-geographic averages, and in purchasing “micro-geographic” customer database marketing, ie sms marketing to the consumers living within the vicinity of the store, are actually receiving a database of consumers within the broader geographic area, and can therefore expect little return on their investment, as this spend is not going to bring about a call to action to consumers living 5-20kms from a store, as opposed to a very real call to action that would be created if the consumers did live within 1-3kms of the location as claimed, given a real value proposition.
The advertiser purchasing this campaign may have little knowledge of the capabilities of a true Geographic Information System nor the power of truly geographic data, and micro-geographic marketing. Then again, the sales people of this product, too, have as little knowledge. And as there are few real measures of broad digital media effectiveness, it’s difficult to quantify the lack of response to such campaigns.
The uninformed advertiser assumes GIS and Location Intelligence cannot provide the solution to getting more bang for their buck. Do not be mislead and misinformed. Contact Spatial Insights as we can, in fact, accurately and scientifically profile micro-geographic catchment areas, as well as measure customer response, and target advertising and marketing messages through efficient media channels within the prescribed geographic catchments areas.