Where can I find new customers?

How to identify your best customers?

The approach you take to bringing together location and demographic data will depend on the type of business you operate and your business’ life-stage.

Creating a customer profile for a new business

If you are starting a new business and don’t have a customer database yet, there are two ways to use geodemographics to pick the best potential site for your venture.

The first approach is to look at our demographic classification data and pick your ideal profile or “pen portrait” of a customer. This group can then be plotted in an area to identify hot spots of your ideal customers and let you intelligently select a new business location.

The alternative approach is to look at competing businesses and analyse the catchment areas around their stores. You can plot a realistic travel time around their sites and identify the demographic groups with the highest penetration in those areas. Those groups who index above the national average should give you a good indication of your competitor’s key audience.

A word of caution though; only choose competitors who seem to be thriving and select their longer-serving branches – you don’t want to share the risk of their latest test outlet.

Catchment mapping for an established retailer

If you run a retail store and do not have access to customer postcodes, catchment mapping provides an ideal way to identify prominent audiences for your store.

Plotting a reasonable drive-time around your local store gives you a realistic “catchment” of your current audience. You can then look at the demographic groups within this area and by comparing them to the national average - or “index” - you can see the main audiences that your store has access to. This becomes even more valuable if you have multiple stores as you can compare performing and underperforming stores to look for the difference in audience around them.

An alternative approach is to collect customer postcodes from an incentive, survey, loyalty scheme or competition and approach the project as you would for a customer database - see below. Beware though, that respondents to such things are not always representative of your entire customer base - only those inclined to respond to such offers.

Enriching a customer database with geodemographic data

Targeting your new best customers

So, now you know who your best customers are and have mapped them to geodemographic groups. The next step is to take those high-value groups and work out where else you might find hot spots of them. Our geodemographic data is modelled over the whole of the UK, so we can find hot spots of any customer group, wherever you are working or thinking of expanding to.

Geodemographics to target campaigns and promotions

Knowing your existing customers’ locations also means that you have an understanding of how far they are willing to travel. So, a low-hanging fruit would be to use this travel time to create an isochrone radius around your outlet(s) and check for any under-represented groups of that profile type. These people would be prime targets for marketing activity without any need for additional investment in business infrastructure.

You could also extend the drive time slightly and craft an incentive or offer to try and draw in these prospects from further out.

Location analysis for a new site

If you are looking to open a new outlet, you can find hot spots of your ideal customer type and shortlist those locations for a new store. Add in your competitor’s stores on the map and a reasonable drive-time catchment around them and you can discount any high-competition areas. With this approach you can ensure that your new store is located in a fertile area, likely to sustain itself, and has a good chance of healthy profit.

A similar approach can be taken to those wishing to downsize their network in order to identify those stores with the most potential - and most worth keeping.