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Finding new great customers

Apr 5, 2012 - By Brett Housholder

Question -- "I keep pretty decent customer records and know who my best customers are. How do I find more customers like them?"

-- Mike, Casper

Answer -- If you keep good customer records -- name, address, how much they have spent at your business through a period of time -- you can use simple GIS analysis to determine what your best customers have in common and where you can find more of them.

Basically, GIS (Geographic Information System) analysis means using maps to display and analyze various types of data.

A simple spreadsheet with that information can be used to create a map showing where your customers are located. Various tools are available that can be applied to learn more about these customers, including such information as average household income for their neighborhood.

Think about it this way: If you run an auto repair shop, wouldn't you like to know if there was a neighborhood in town that spends an unusually high amount on vehicle maintenance every year? Wouldn't it be advantageous to target a direct-mail campaign in this neighborhood since you already know they are more likely to use your shop?

GIS analysis can help you make these decisions. The process is quite simple.

First, your raw customer data (name, address, amount spent with your business) is represented geographically on a map. This gives you a basic idea of where your customers are.

Next, there are a number of "layers" that can be placed on top of the map. Think of it like placing a piece of tracing paper over a picture. You still see the picture, but you can add more to it by drawing on the tracing paper.

These layers can contain a variety of data, but let's use annual expenditures on vehicle maintenance as an example. When this layer is applied to your customer map, let's say you notice a high concentration of customers in a "hot" area and then notice another neighborhood in town with similar expenditures, but very few of your customers. You've just found your next target for a direct mail campaign.

GIS analysis can be a powerful tool and can help make informed decisions about a business instead of just guessing. For more information, e-mail the Market Research Center at mrc@uwyo.edu.

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Editor's note: Brett Housholder is Wyoming Entrepreneur market researcher, part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming. To ask a question, email at wsbdc@uwyo.edu or call at 1-800-348-5194.

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