7 Location Intelligence Use Cases

With Geomarketing, location analytics or location intelligence we mean the joint analysis of company data, market data and spatial data which is highly profitable for any business that uses them. We will see some examples and practical cases.

Through the benefits of location intelligence, the importance of market data and free resources , we present specific successful cases and examples of the application of Location Intelligence.

1. Location intelligence for Expansion of retail network

I have already presented the methodology for franchise expansion analysis, I won’t repeat myself. I simply remind you that it is one of the most profitable geomarketing applications in the short term. The presence of potential market and competition in a new location is, probably, the most determining factor for the survival of the business in the medium term.

You can take a look at this location intelligence demo in Valencia, a very simple case of describing the competitive situation and demand around existing centers and a potential new center. Here is a screenshot of it to whet your appetite.

The final project is much more complex, including more relevant data and more complex analyses, and constitutes a clear case of success, maintaining a pace of 40 establishments opened annually over the last four years, having closed only one in the period.

2. Geographical origin of clients and share

To know which areas clients come from and how much the contribute to sales is one of the most immediate applications of Location Intelligence. An example of Location Intelligence on a large scale, with geocoding of clients by census tract, can be seen in the following image:

To know the origins of clients and contributions to sales from each of the different areas allows for the optimisation of local actions, to value the impact of rival businesses, to measure the capacity of real attraction from the points of sale…

3. Location intelligence, pharmacies classification and demand prediction

Another use case of Location Intelligence is the points of sale segmentation, having previously enriched them based on the trade area features. In this specific example, a pharmaceutical company wants to segment all of the pharmacies it works for, as well as those which it doesn’t work for, with the goals:

• Understanding its position from the point of view of the market as well as the client – how do they see us?
• Estimating the potential demand of each pharmacy and focusing its efforts on the greaterst potential
• Directing the product with the higest probability of sale to each type of pharmacy

The result is a strategic segmentation of pharmacies made up of homogenous segments that differ amongst each other. The cross between sales and this typology of clients allows for the identification of growth opportunities, as well as current weaknesses, and sets up a marketing plan based on Location Analytics. This spatial analysis is reflected in bringing the ideal product offer to each type of pharmacy, increasing segment activity and the rate of success with respect to commercial actions.

Lastly, all the knowledge will be put within reach of the organisation via a business intelligence platform which integrates mapping of pharmacies and the segmentation resulting of the previous process.

4. Location Intelligence for mailing and emailing optimization

This case uses extensive Location Intelligence. We have shown how to select high-potential mailing areas, in terms of the target of our product or service. An example of a mailing area based on potential demand could be similar to the following map, where areas are selected based on the variables which define the target for a furniture store brand:

In the succuessful case shown, the method was previously tested with a small number of shops and campaigns, resulting in an increase in the rate of visits resulting from the measures taken, as well as the sale of the promotion period. Currently, they are segmented systematically and are measured as a result of the mailing, improving them continuously.

5. Selecting high potential customers in direct sales with Location Intelligence

A direct and online sales company and delivery service requires going to capture customers of high potential. For that, we segmented the customer portfolio and we identified sociodemographic features of the customers with the highest lifetime value, those who stay the longest and those who accumulate the most spendings.

These profiles we look for in geographic areas to define capture areas where the highest presence of this type of client are. This way, we take value into account which in the long-term a client would have in the moment to invest in capture.

Finally, a Location Intelligence / mapping tool allows both decission makers and sales agents to query, edit and optimize the sales areas and routes to optimize their work.

It is a perfect example of location intelligence, because through an initial phase of analytical consulting, Location Intelligence software was set up, in which commercial businesses can consult on the areas to visit and trace routes via mobile phones, fill in results of visits, comments, correction… All of this is of use in terms of improving the segmentation system, adjusting distribution routes, among other applications.

6. Location Intelligence for an industrial B2B company

Although there are not many companies which use Location Intelligence in the industrial sector, the spatial relationship between a company, their providers and their customers is key if we want to segment businesses:

• From the point of view of costs, logistics and delivery processes
• From the point of view of sales and distance to be covered by commerces

A clear example of location analytics in industrial markets constitutes the following case of segmentation and Location Intelligence combined:

1. Segmentation of activities, sizes, industrial processes of the company’s top clients
2. Sizing of each segment in the market, quota and growth opportunities
3. Identification of the presence of the top segments on a geographic level, for example by postcode

The result at the end of this process would be this map, which shows the production centres, the distance of 100km surrounding – which marks a logistic profitability threshold – and the presence of potential clients in the form of businesses by postcode.

The commercial businesses benefit from the application when deciding their actions, planning routes, event registering new businesses via phone app. From a strategic vision, it facilitates decision-making with respect to new production centres, profitability of clients with a high logictic cost, pricing, outsourcing… Ultimately, Location Intelligence works for selling more and better.

7. Location Intelligence on e-commerce, getting to know the online client

You might think that Location Intelligence is not applicable to online businesses. But on the online channel, it is of great importance to know and to segment clients, and at the same time to carefully collect information. It is feared that clients will drop out upon being asked for their data. It is hardly ever considered that through a client’s geollocation we can get to know them better. Furthermore, with this, it is permitted to elaborate clients’ profiles with a higher quality of life, as opposed to those with a lower quality of life. It is even possible to develop predictive modelling of client value upon obtaining their address, establishing rules based on predicted value.

The following graphics show client profiles of an e-commerce business with respect to the total population. We can see considerable differences which allow us to identify online client profiles:

Applications of Location Intelligence on the online channel would principally be:

1. Broaden knowledge of clients with socidemographic assumptions of where they live through geocodification, as has been described
2. Optimise collection points based on where clients reside
3. Develop dynamic pricing models, of which the cliente pays based on the logistic costs of the e-commerce business
4. Unique omnichannel client vision, selection of service and/or communication channels

If you are interested in the application of Location Intelligence, you can check out our Location Intelligence software demos or either contact us for advice. Thanks a lot for reading this far!