In a recent article about Dunkin’ Donuts versus Starbucks I read an interesting piece of information. The customers who were in Dunkin’ Donuts told the reporter the reason they stick with Dunkin Donuts is because they are from the North East and Dunkin’ Donuts is what they are used to. The same is true for West Coast residents they tend to turn to Starbucks. How can this information help your business?

If you can pinpoint potential customers and market to them more efficiently, you will see better returns on your marketing investment. A tool that can help business owners better utilize their marketing dollars is GIS (Geographic Information Systems). In fact, you may have used Google Earth - a basic version of GIS technology.

GIS tools, such as Google Earth, use location information to help users make decisions. So, how could Google Earth help you understand your customer better and make more money?

First, map all your current customers to see where they are located. Next, use demographic data to find what households have roots in the North East. Data can be obtained from moving stats, relocation stats from State or County, or internaly collected data. Using color coding, the more intense red has a higher concentration of the target market, it is easy to identify high concentrations of the target market. So based on the high concentration of red and existing cutomers east of I-95, you can target a direct mail campaign to the area you identify.

Why would using Google Earth help direct mail? Couldn’t I just guess the area and send postards to those homes, sorta like trial and error? You could, but what if you guess wrong, how much would the mailings cost? A friend of mine decided to send postcard mailers to all the households within a 10 mile radius of her store.

The cost was an astounding $5,800 for the postcard and postage. I am not sure about you, but as a manager in a small business, $5,800 is quite a bit of money for one direct mail compaign. The large dollar amount also increases the break-even point, meaning more sales to cover the cost of the direct mail.

Instead, I offered to map her existing customer’s versus the county population. Then we tied in the female population under 30 years old. The ending result was the above illustration (blue and red). The darker red areas identify areas with higher concentrations of females under 30. Once we download the information and saw the total households, the total households were roughly 2,000. Instead of her direct mail costs totaling $5,800, the costs dropped to $1,160.

Now to turn on my marketing hat for a minute, direct mail typically has a return of less than 1%, which means of the 10,000 mailed, only 100 will respond. On the other hand, more targeted direct mail can have up to a 6% return or even higher. With a 6% return, on 2,000 households you could expect to see 120 people at the store. So, with 8,000 fewer households receiving the mailer we still managed to get a higher response! Also, since the mailer is targeted to the store’s target market, the customers tend to have a higher average sale per transaction.

You are probably thinking, that is all well and good for a store but my business is not based on a store front, how would GIS benefit me? GIS has been used by many different businesses for over 20 years. Companies such as McDonald’s and Wal-mart have been using the technology to count customer cars and determine new store locations. Insurance companies use GIS to measure their risk and market to areas with lower risk. A land developer uses the information to find their next project site. Land conservation groups use GIS to rank the land they want to buy. Shipping companies use GIS to route where their vehicles will travel each day. The possibilities are endless. If you have a question on location, GIS can help you answer it.

Taking information off a spreadsheet and putting it in a picture gives business owners the ability to make decisions within minutes instead of hours.

Checkout how you can implement Google Earth in your business: http://1globalmind.com/2008/02/13/google_earth_for_business/ 

Once you try it, post your results here. Have fun!

Where do you begin? If you are new to development or new to a geographic area it can be a daunting task to find property.

In the past, developers or investors have found property through brokers, colleagues or by driving.  Advancements in technology, GIS (geographic information systems) combined with aerial photography, allow developers to search for land from their computer. 

How is this possible?  To make a long story short, many government agencies have moved their information on-line.  Everything from court records to property records.  The information is great, but searching the information can be difficult.  The only available search options are by parcel number, owner name or address.  Most often, when looking for a property, I would only know the characteristics I am looking for in a property: size (acres); general location (city) and zoning.

So, how can GIS help me find land?  GIS is an excellent tool for inputting criteria and obtaining results.  I could do the same thing in a spreadsheet document, but viewing data on a map is much easier.  To find the land I need, I would enter my search criteria in the area I want to search, say Polk County, and view my results either in tabular format or on a map. The map is important because now I can see what other buildings, subdivisions or roads are near the parcel.  Before GIS and aerial photography this was only accomplished by taking a trip to the location.  Think of the time saving potential!