Directions Magazine
Hello. Login | Register

Articles

All Articles | Post Comment

The Power of Two: Combining Demographic and Location Analytics for Marketing Insights

Wednesday, January 15th 2014
Comments
Classified Ads:

Summary:

Erie Mutual Insurance Company integrated demographic data into its analysis of its prime consumer segments, so it could identify prospects and determine appropriate marketing by location. Union Gas was able to leverage location and demography to target expansion of its weatherization conservation program more effectively. This article provides a synopsis of each company’s approach to its respective location analytics challenge.

Marketing industry leaders DMTI Spatial and Environics Analytics (EA) recently formed an alliance to provide businesses and not-for-profits with the most comprehensive demographic and location intelligence about consumers anywhere in Canada. The agreement gives clients access to EA’s authoritative demographic datasets—such as DemoStats, CensusPlus, HouseholdSpend and DaytimePop—on a record-by-record basis. At the same time, clients will be able to access DMTI’s location services to enhance their customer files with on-the-ground data. DMTI’s product roster includes Location Hub, a platform that offers current address information, and CanMap, a suite of detailed mapping data for Canada. Together, the two companies’ offerings give marketers unprecedented insight into where and how target consumers live.

On a practical level, the new partnership will allow businesses to submit a customer or prospect file and receive data such as age, income and spending preferences appended to each record, while also having each record cleaned and accurately mapped. Information provided by the combined data products will help financial institutions, charitable organizations, retailers and other businesses better understand their customers and patrons, more accurately estimate product potential and wallet share, and identify consumer segments receptive to their products, services and appeals.

The new alliance will help businesses take advantage of big data—that massive amount of information now available for analysis and strategic planning.  Whether from internal or third-party sources, this stockpile of data can enable businesses not only to discover insights about their customers and prospects, but also to identify the right locations for opening new stores, optimize the merchandising of existing ones and choose the best marketing messages for the consumers in specific trade areas. By leveraging this mountain of demographic data, businesses and not-for-profits can gain highly accurate insight into who their existing and potential customers are, how they live and how best to target marketing efforts to connect with them. 

Insurance Industry Example: Erie Mutual

Several years ago, the Erie Mutual Insurance Company embarked on a “re-engineering” campaign to improve its sales and marketing efforts. Erie Mutual currently serves more than 3,300 policyholders in the Haldimand-Niagara region of Ontario with its team of sales agents, underwriters and loss prevention officers. But after nearly a century-and-a-half in business, Erie Mutual found itself struggling to develop new business. While other insurance companies were moving to Web-based platforms and downsizing their sales force, Erie Mutual wanted to increase its agent network to deepen the relationship between policyholders and the company.

“We didn’t have a good grasp of our customers and prospects,” says John Dunton, the president and CEO of Erie Mutual, from his office in Dunnville, Ont. “But we were launching a growth strategy which was high-touch and relationship-driven. We knew we were facing a big challenge.”

To meet that challenge of becoming more customer-centric despite a lack of customer information, Erie Mutual turned to location analytics. While many insurance companies are awash in data about policyholder accounts—the square footage of homes, the number of cars—their databases typically lack critical demographic information for a targeted marketing strategy.

The effort to gain that customer intelligence began in December 2012 when Erie Mutual engaged EA to analyze its customers based on their predominant demographics, behavior and attitudes. The analysis provided Erie Mutual with a 360-degree perspective of its prime consumer segments. And those segments helped Erie Mutual understand the size of its market and provided insights into policyholders for targeted marketing campaigns. Data-based maps showed the locations in Haldimand-Niagara where Erie Mutual would likely find “look-a-like” prospects. That information helped determine which media and messages were best for communicating Erie Mutual’s value proposition in which neighborhoods. Sales agents also were able to identify customers for cross-selling products and rank postal codes for reaching promising prospects. Today the company is considering launching a loyalty program to deliver more value to customers.

Location data can be especially valuable when analyzing customers and markets. Marketing and real estate analysts have long recognized that location intelligence can provide a more robust picture of a business’s customers, but few organizations take advantage of location data in enterprise-wide applications. That’s a mistake.

When businesses combine demographic and location information, they can custom tailor their marketing efforts to a specific audience within a geographical location.  A charity, for instance, can greatly benefit from linking location and demographic analytics gaining key insights about its donors, their household income and the types of charities to which they contribute, for example.  By connecting these data points to a location, marketers can better capture the attention of their most receptive donors while at the same time reducing their marketing costs by focusing on a smaller, more targeted donor audience. Applying the power of demographic and location insight can result in greater success and profitability. 

Natural Gas Industry Case Study: Union Gas

To further demonstrate the impact of combining demographic and location intelligence, consider the experience of Union Gas, a major Canadian natural gas storage, transmission and distribution company that has operated in Ontario for over a century. Its distribution business serves about 1.4 million residential, commercial and industrial customers in more than 400 communities across northern, southwestern and eastern Ontario.  Not long ago, Union Gas launched a program to promote a weatherization conservation program to a specific segment of its customer base.  Executives wanted to expand the program to reach the target base in the most effective and efficient manner possible, but they weren’t sure how to accomplish this.  Additionally, they needed to determine the best areas to focus their marketing and messaging based on their customers’ property characteristics and neighborhood demographic profile. 

A holistic solution enabled Union Gas to visualize existing customer addresses and cross-reference those addresses with neighborhood and property characteristics to identify the right neighborhoods in which to promote its conservation program.  The results were significant.  Compared with a typical response rate of 1%, this program’s uptake, rates increased to 4% and, in some areas, 8%. Some 11.5 million cubic meters of natural gas were saved—a consumption reduction equal to the removal of 3,800 cars from the road for one year. 

“Through the use of DMTI’s location-based services, we have been able to broaden the awareness and uptake of our programs with highly targeted communications,” says Dave Simpson, general manager of sales and marketing at Union Gas. “This is a win for our customers financially, and it improves the environment by saving energy.”

Without the help of demographic and location analytics, achieving these positive results would have been much more difficult. 

The Power of Two

Enriched insight enables companies like Erie Mutual and Union Gas to develop the tactics to identify their target audience, connect with them and ultimately meet their strategic goals. Combining demographic and location analytics can provide businesses with the missing piece of the puzzle behind successful customer acquisition, merchandising, cross-selling and site location analysis. With all the data available, there’s no reason to go to market without knowing exactly where the best customers are located.


Did you enjoy this topic? Check out these Channels:
Energy and Infrastructure, Location Intelligence

Bookmark and Share


Stay Connected

Twitter RSS Facebook LinkedIn Delicious Apple Devices Android Blackberry






Recent Comments

Census Stats in Action: Infectious Disease

Multispectral Imaging Could Reveal Secrets Of Martellus Map
Rutgers Researchers Show that How Fast You Drive Might Reveal Exactly Where You are Going
NASA/ISU RECOVER Program: Broad range of uses for natural disaster recovery
AidData Taps Students to Train Local Organizations to Track Development Spending
Apple, Sensors and Geodata Overload
A Global View of Earth and the Environment: An Interview with Barbara Ryan, Director, Group on Earth Observation (GEO)
Redefining Geospatial Data Versioning: The GeoGig Approach
Understanding Geographic Relationships: Counties, Places, Tracts and More

DirectionsMag.com

About Us | Advertise | Contact Us | Web Terms & Conditions | Privacy Policy
© 2014 Directions Media. All Rights Reserved