How maps can improve sales

There is a saying “Half the money spent on advertising is wasted; the trouble is you don’t know which half.” The statement attributed to John Wanamaker, who is considered to be the father of modern advertising, illustrates how difficult it is for a business to come up with an optimal advertising strategy that will deliver maximum results, at the minimum cost, and with minimum wastage.

If you try using “a bit of everything” you are spreading your resources too thinly. Focus too much on a single advertising channel and you are potentially missing out on some big opportunities elsewhere.

For example, online social media engagement for promotion of business is the latest communication channel rapidly gaining in popularity (and hype) but should it be the only channel? Will it deliver in your line of business and for your geographic market? It’s one of those dilemmas: “damn if you don’t engage, damn if you do…” so, one way of prioritising which advertising and promotional options to pursue is to compare alternatives based on total reach, proportion of target population reachable through the channel, duration and timing of exposure, and overall costs involved.

Although the optimal mix of advertising and promotional activities will depend on what you are selling, the target audience you are pursuing (ie. whether global or local) and the scale of you operations, however there is one simple activity that should always be seriously considered – contacting your potential clients directly (either cold calling, sending snail-mail or just arranging for letterbox drops). Why? Because of simplicity of implementation of this option. And not to mention that the campaign can be personalised, can be localised (either for testing or to stage a rollout if your budget or response handling capacity is limited), you can easily measure the results and it can be very inexpensive.

The rest of this article is a case study on how maps and simple spatial analysis techniques can improve efficiency of direct marketing activities and ultimately, sales results. Traditionally, such methods have been restricted to only large companies due to the cost of analytical tools and/or specific skill set required to undertake the analysis. However, with the advent of free mapping solutions and increasing volumes of free data liberated by State and Federal governments with Creative Commons licensing, the capability to undertake spatial analysis is well within reach of business enterprises of any size.

Case Study

Challenge: Your target market is property investors in Canberra and you have a budget for a letterbox drop of promotional materials about investment loan refinancing options to 10,000 prospects. Your objective is to maximise effectiveness of the campaign (ie. get the best return on your bucks!).

Solution: The key to the success of your campaign is to know which are the areas that offer the best opportunity to reach your target audience. The easiest way out would be just to pick the most affluent postcodes and do your mailbox drops there. But is this the optimal approach? And which are those “affluent postcodes’?

There is a good range of free information available from the Australian Bureau of Statistics that could help with the campaign but for this particular campaign there is even better free data source: statistics on personal returns from the Australian Taxation Office that show numbers of property investors in each postcode.

Equipped with that data you can do a simple analysis classifying and sorting the postcodes based on a couple of variables: overall proportions of people claiming rental investment expenses in each postcode and the value of their claims in relation to the ACT average. This will allow to pinpoint specific postcodes with the highest probability of reaching the target audience (ie. the highest proportion of taxpayers claiming the highest loses).

Focusing just on the postcodes with the largest number of property investors is not the most optimal approach since population counts in each postcode vary dramatically. So, the absolute number of investors in a given postcode may be high but proportionally to the overall number of people in that postcode, there may not be many prospects there. And besides, you would also want to find people with the largest mortgages to optimise your efforts. Therefore, that extra analytical step can be very beneficial. This way it is possible to derive a meaningful ranking measure of postcodes based on the concentration of people with sought after characteristics in each postcode.

Mapping the results will help to visualise the location of your target audience and to manage distribution of promotional materials. Thematic map shown below is an illustration of the outcome of a simple analysis outlined above and shows detailed boundaries of target postal areas (dark red polygons indicate areas with highest concentration of target audience).

[full report can be downloaded for free from: aus-emaps.com/reports/ ]

Conclusion: The campaign should focus on postcodes 2600 and 2603 (with approximate number of 10,500 taxpayers and 2,675 total potential clients). Targeting these postcodes will give you the most optimal, 1 in 4 chance, to reach your audience.

This case study demonstrates that running campaigns in an ad hoc manner cannot deliver optimised outcomes. Even if you have limited resources, simple analysis and mapping of the results can help immensely in maximising the return on your efforts.

Social network phenomenon

“Social networking” phenomenon is driving astronomical growth of many online companies, from the leaders of the pack like Facebook, to numerous peddlers of “make quick money online” self-help guides. The bigger the network/ mailing list, the larger the company value and profits. But what is really behind this phenomenon? I am leaning towards a conclusion that it has nothing to do with “social” but rather with our limitation to deal with information overload…

Let’s look at this objectively. The capacity for individuals to participate in various social exchange networks was available from the early days of the Internet: forums, discussion boards, chat services and the like. However, the limitation was that these were mostly thematic based networks. With rapid growth of themed content on the Internet it all became very fragmented and difficult to follow…What Facebook, Twitter and the like brought to the mix was the capacity to participate/ follow many themes from a single portal! So, rather than helping user engage in “social networks” what those companies are really doing is assisting in information exchange! As simple as that. Just think about it. A person “following” a company on Facebook or Twitter has nothing to do with “social interaction” with that company – it’s not about “belonging” or “association” / “being part of a social group”. It’s all about access to specific information of interest to that individual (humour or other forms of entertainment, news, events, specials, etc.)!

Same applies to relationships between individuals – sociologists claim normal individuals are not capable of true social relationship with more than 150 counterparts at a time. Yet social network sites are full of people with thousands of contacts… Again, it is all about information and trusted channels of access to information, not about social interaction! The fact that individuals can participate in discussions and exchange messages is a part of the deal – some take advantage of it, others do not. True, the focus on “friends” helped Facebook to grow those personal networks at a rapid rate to propel the company to number 1 network facilitator but I will argue the key driving force was “the need to know” and not “the need to belong” (opening up the network to others and not only college students was the best and most logical decision to make since it is not about who you are but rather what you need to know!).

The information overload is what in my opinion is driving the popularity of the thing labelled as “social networking”. People want to know what is happening in their immediate environment, places of interest, topics of interest AND people they associate with (friends, colleagues, celebrities, etc.). At the same time people want to participate in some of those forums personally. Not enough time to read/see/do everything so the only way to keep up is to revert to “skimming over main headings” and to “following” limited number of information themes (on demand, user initiated).

What is helping in managing communication complexity associated with information overload is wide acceptance of abbreviated message format. It could be argued that the format was first introduced by Google Search – we all are so used to it: title and a short description of content. Just compare the main content pages of Facebook, Twitter, LinkedIn or Google Search … they all follow the same “short message format”!

I believe “social network” is a bit of misnomer as it implies only personal interactions of a casual nature. It is more than that! And the implications of this view on the state of affairs are far reaching. Let me just share a few observations. Firstly, for publishers and participants in networked information exchange it highlights the importance of catchy titling with informative but short secondary tag line to draw attention of “skimmers” (the principle is nothing new and has been applied in print advertising for ages…). Short form content sharing and aggregation will only grow in popularity. This is a great opportunity for content aggregators and gadget makers and another warning for those considering locking their content exclusively behind pay walls (although can also be seen as a great opportunity if enough of short content is left in the public arena!).

Secondly, it implies that the importance of Google and other search engines (and hence SEO for marketing) will be diminishing as “search” is starting to loose ground to “personal recommendations”. A new information referral model is emerging on the Internet where “opinion leaders” (ie. those with large personal networks) are starting to play more significant role in directing online traffic. The bad news for online advertisers and marketers is that it is a very fragmented channel of communication. It also means that the concentration of online advertising power will be shifting to network facilitators, such as Facebook, and away from search focused sites. Some food for thought…