Adding a new twist to the old real estate mantra of “location, location, location”, a marketing insight services company, Knowledge Factory, argues that applying geo-demographics (the convergence of geography and demographics) to the customer database is one of the most expedient ways of finding answers and gaining real competitive advantage. 

“It is surprising how often executives are unaware of what a useful tool it can be,” says Dave Osborn, executive head of business development at Knowledge Factory.
“Yet they get very excited when shown the increases in sales that campaigns informed by applying relevant geo-demographic information to customer databases can produce.”
Geo-demographics is the correlating of demographic data – information about the population segmented by factors like age, sex or income – with concise geographic data.
Physically locating demographic information through this technique allows it to be represented visually and analysed from a spatial perspective.
One of the basic tenets of geo-demographics is that people with similar values, means and perspectives naturally gravitate toward one another and form relatively homogeneous communities.
By developing an understanding of the common characteristics of people living in geographical areas or ‘clusters’, marketers are able to target audiences more precisely and improve the efficiency of their campaigns.
“As the number of players and channels proliferate and competition intensifies, companies need to enrich their existing transaction data – who is buying what, where – with geo-demographic data to identify areas that have the highest potential for new customers or to up-sell and cross-sell to existing customers,” clarifies Osborn.
He points out that geo-demographic profiling is not limited to mail order marketing or other direct marketing initiatives either.
“Retailers and franchisers can now identify ideal locations in a fraction of the time it used to take,” explains Osborn. “For these businesses, our geo-demographic segmentation tools enable them to identify trade areas with the same characteristics as their successful outlets, thereby greatly improving the likelihood of replicating such success.”
As well as helping improve customer targeting, campaign response rates and store location, maximum advantage of geo-demographics can be gained when combined with thorough analytics techniques, to help companies make better strategic, tactical and operational decisions.
“The real power of this method lies in the fact that geographic location can be used as a common denominator – as a way of linking and correlating data from disparate sources across the organisation.
“These volumes of data can be combined and analysed and the patterns revealed by this process used to enhance the organisation’s business intelligence insights. One example of this is being better able to predict future customer behaviour.”