Connecting the Dots: Why Geocoding is Critical for Businesses
Many companies have found geo-location or geo-targeting
technology to be of value in Internet advertising. Pay-per-click search
engines like Google and Yahoo offer the ability for advertisers to
deliver targeted advertising banners based on the location of the
website visitor's IP address.
For marketers, geocoding is critical in targeting specific
demographics. Appending demographic census track data to latitude and
longitude coordinates helps marketers target the right demographics -
those who would be most likely to respond to their offer or marketing
Insurance companies are relying increasingly on geocoding techniques to
help set premiums and make underwriting decisions based on the physical
location of the insured property. Take Hurricane Katrina and
storm-surge damage, for example. Most insurance carriers have their own
set of rules and criteria when it comes to underwriting, such as
property elevation and determining the distance of the property from/to
the coast. Such an imprecise standard may leave carriers insuring
properties that may not be situated in a flood zone, but are actually
in a storm-surge zone - where the flood exclusions in their policies
would not apply.
"With mapping applications in such widespread use, companies have a
need to translate existing address data to their respective lat/long
coordinates," says Bud Walker, product manager for Melissa Data, a data
quality and geocoding service provider.
"The benefits of high-accuracy address geocoding are manifold and serve
a diverse set of applications such as market segmentation,
demographics, spatial, dispatched services, nearest location queries,
sales districting and zoning, tax jurisdictions, elections, etc.," says
A Web Shoe-In: Geocoding as a Store Locator
One of the most widespread uses of geocoding technology is in
store/dealer locators. Businesses use geocoded data to ascertain
proximity to potential customers, distance to suppliers and
competitors, service areas and delivery routes. You've probably
experienced a locator lookup yourself - maybe to find a restaurant, pet
shop or the Sprint Nextel store nearest your home or business.
However, to adequately serve its 52 million customers, Sprint Nextel
often has multiple stores located within the same ZIP Code. So which
neighborhood store is closest to a particular customer's home? Using a
geocoding solution to power the Store Locator on its website allows
Sprint to turn the street addresses of its stores into usable
locational information - so customers can actually determine which
store is closest in relation to their home address.
But what if the address is wrong? Without accurate addresses, it would
be difficult to obtain accurate geocoding. For instance, a geocoding
application might not recognize the difference between 123 Elm St. and
123 S. Elm St., which could be two totally different addresses located
miles apart. A bad address diminishes the accuracy of a store locator -
it's the biggest reason why some store locators get it wrong.
That's why businesses are more proactive about integrating routines for
address verification with their geocoding initiatives.
Dansko - the footwear manufacturer and distributor known for its
popular "stapled clogs" - successfully integrates address verification
technology as part of its geocoding solution.
Dansko distributes its footwear to more than 3,500 retail locations.
The company sells its products through specialty retailers and online
shoe venues. Dansko uses an address verification API to validate and
standardize its retailers' contact data, which include each store's
address, city, state, phone number and ZIP Code. The footwear
manufacturer wants to ensure that its retailers' information is uniform
and correct before it geocodes the data. Once the addresses are
verified and corrected, Dansko uses a geocoding solution to append
latitude and longitude coordinates - allowing the company to zero in on
the exact location of each retailer's store.
The company's website - Dansko.com - features a "Find a Store" lookup
function, which enables shoppers to locate Dansko retailers by entering
a ZIP Code or city. After typing in the ZIP Code or city, the "Find a
Store" function will do a radial search from 10 to 50 miles and display
a listing of local retailers that sell the Dansko brand - right down to
the shoe style and color level. To do this, Dansko checks its shipping
history to see if a set minimum quantity of a particular shoe/color was
shipped. This would mean that the retailer carries the shoe in its
By integrating address verification and geocoding technology into its
website, Dansko creates a more enhanced and personalized experience for
online visitors and drives foot traffic to its retailers' stores.
It's all in the Delivery: Geocoding as a Routing Tool
The use of geocoding applications as a delivery/routing tool has proven
to be a necessary component for businesses that rely on having their
products delivered on time and to the right location. Geocoding also
enables companies to perform route sequencing technology, which
calculates the most time efficient, optimal way to deliver or visit
For snack foods giant Frito-Lay, the use of geocoding technology is
vital. Frito-Lay utilizes geocoding techniques to ensure efficient
delivery of its consumables and manage and control the flow of goods.
Frito-Lay uses geocoding technology with its routing application to
zero in on the precise location of its vendors' addresses - and doing
so has helped increase the rate of accurate deliveries by 80 percent.
Obtaining precise geographic information is also a must-have for the
same-day delivery industry. Just ask CXT Software. The Phoenix,
Arizona-based courier software and mobile resource management
technology firm wanted to increase dispatch efficiencies by determining
the exact location of its delivery personnel.
CXT Software integrated a geocoding solution into X Dispatch, its
flagship product. X Dispatch is an enterprise-level software
application that allows a dispatcher to see the active orders and
drivers on the same screen. The software applies advanced algorithms to
the geocoded location of each order and driver, which allows the
dispatcher to select the best driver for each job.
"Geocoding allows the quick plotting of the address on a map," said
Lyndon Edmonson, chief financial officer for CXT Software. "Distance,
whether it is from a map or some other algorithm, is more quickly
ascertained with latitude and longitude than other methods. Precisely
knowing where a pickup or delivery is, and where the driver is,
increases his proficiency and aids in his ability to make good
Based on a recent analysis report, the company's use of geocoding
technology improved a customer's overall operations; revenues jumped 7
percent, online orders increased 25 percent - while costs dipped by 4
Wherever You Are, There You'll Be: Geocoding as a Local Search Tool
Other businesses use geocoding technology to deliver more relevant
content to online visitors, to create better relationships with Web
visitors and to improve customer satisfaction and retention rates. By
offering more relevant content to the site visitor, retailers can
prevent - or at least decrease - website and transaction abandonment.
HelloMetro - a global network of city search guides - provides website
visitors with the ability to identify local restaurants, hotels,
businesses and attractions in targeted ZIP Codes and neighborhoods in
all major cities in the U.S. This is the power that geocoding provides.
HelloMetro's "hyperlocal" searches are powered by Maponics, a custom
mapping and GIS data company.
The "hyperlocal" search functionality gives users more relevant
information about a specific neighborhood or ZIP Code - right down to a
map, local reviews and contact information.
Businesses require the highest level of accurate locational information
available. Using geocoding technology can help a business answer
fundamental questions, such as: What is the geographic area we serve?
Are our sales territories and client clusters properly aligned? What
are missed or overlooked areas where potential clients might exist? By
geocoding client data you can see patterns emerge and create new
opportunities for businesses. Utilizing a geocoding solution can help
businesses strengthen customer relationships, improve profitability and
increase effectiveness - all of which are critical in expanding
business in a down economy.
Published Tuesday, September 30th, 2008
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