Primer: Geospatial Analysis
Mapping data yields more than just good directions; it can yield customers. A look at the benefits of geospatial analysis.What is it? A way to determine where your customers live or work by correlating their street addresses with their physical location. Its done by adding data from mapping software or the Global Positioning System to the customer information you already have, such as purchasing history, creditworthiness and income. By combining demographic and geographic information, marketers can, for example, draw a line around a particular region and ask the database for the names and income ranges of customers who live within that area. Existing databases can track street addresses and ZIP codes, but cant usually tell, say, whether East Main Street and West Main Street are next to each other or miles apart. Wheres the benefit? By knowing a customers physical location, you can gain tremendous insight into that persons needs, says Fred Limp, director of the Center for Advanced Spatial Technologies (CAST) at the University of Arkansas. If, for example, a customer at 123 Main St. just bought a riding mower, a neighbor at 321 Elm might, too. A normal database query would tell you the two addresses are in the same ZIP code, but not that they are around the corner from each other in a development with unusually large lawns.
How would I use it? The most-cited example, according to Limp, is to help select retail locations by analyzing neighborhood demographics surrounding each potential spot. Without searchable location data, youd have to rely on ZIP codes to identify the area to be examined. "But then, once you put in the data, you can also ask: How many customers make more than $100,000 and live within two miles of the store?" Limp says. Making those kinds of connections can also help a wholesaler identify where its losing sales because there arent enough distributors, or allow an insurance company to set rates according to the disaster risk for a particular house, not just a neighborhood, says Henry Morris, group vice president for applications and information access at IDC.