January 23, 2017

How to increase customer base with geographic segmentation?

Geographic segmentation

All companies, whether large or small want to increase their customer base. This can be done based on simple data collection and analysis based on geographic segmentation.

Once you have found your target market with the use of geographics, you can use the particular data of that geographic to try to find potential markets in other geographies for your company’s product. The more match there is in two geographies, the more likely your customer base will increase.

The easiest and most efficient way to do it is to expand outward. Look at your surrounding neighbors. What do they have? In most areas like states and cities, there will be local associations for business, in general, and associations for specific types of industry. If you want quick access to the geographics data of another locality, your best bet is to ask for help from your neighboring business associations.

Explore the local geography first

It would be a smart thing to get in touch with your local business associations who are the best source when trying geographic segmentation. These organizations generally have data of the businesses operating in their geography.

If you do get the data you need, you can start looking for information that would match the data you originally have (data of the geography where you are already selling in good numbers). Here you will have found a cluster of people who have the same data as your present customers. When you finally expand, you will know where to go and how to get there.

Sources of geographic segmentation

To increase your customer base through geographic segmentation, you need to approach people who know a lot about the local geography. The data collection is the main step to increase customer base. Once you know what type of businesses or public reside in the area, you can plan business expansion.

Generally, the people who have the most information of the local areas are the guys working in marketing, promotions, and customer research. You can take recommendations from the local business bodies as to who they would recommend for your marketing needs.

Once you have a few names of marketing agencies or research companies, then you need to talk to these companies to get maximum geographic data to make geographic segments. These people might be associated with you in future, should you decide to establish a market presence in their locality. These three companies have, at one point or another, probably worked with each other on different projects.

Thus, the best sources of data for geographic segmentation are

  • Marketing Firms are the people who get to see geographics data in their raw and sorted forms. They will, along with the researchers, have a hand in compiling the data. They will also have a hand in geographics data comparisons. If you are searching for geographics data in all their forms, marketers are the people to see.
  • Research companies are those organizations who will have a ton of statisticians employed. It is the research company that gathers the data. Raw data comes from them because they are the ones who do the footwork for physical surveys, email surveys and other, clandestine data mining missions. They will also compile all the raw data and manipulate them into a more recognizable form, like geographics data.
  • Advertising firms are pretty much the last cog in the wheel. Depending on what the marketing and research specialists tell them, they will advise a very aggressive advertising campaign or, a light advertising campaign. They do not really handle the data themselves, but they will have records of them from time to time.
  • Publishers of the really technical business magazines are another good source for geographics data. If going to the publisher is too much of a hassle, you can try going through their relatively old issues first. Not so old, because you need as close to current geographics data to read your market correctly.
  • Libraries – People like to compile statistics. It is most likely that your very own city library has copies of publications containing geographic data. When you travel to the area you want to expand to, your best bet is the local library situated there. If you do manage to find geographics information under all those other books, consider yourself lucky, because you just saved yourself a lot of time and money trying to gather and compile statistics by yourself.

Once you have found your sources, be sure to remember who they are and/or what publication your geographics data came from. You will need updated information, after all. Be sure to remember your sources so you will have an easy time of updating your geographics data.

Now that you have all that you need, you can begin the process of geographic segmentation. You can start finding spots of data that have similarities to your original geographics data. Once you find several places that meet your criteria, you can begin expanding, marketing your product to people with the same geographics, but who have never heard of your product before, or could not get their hands on your products easily.

In the same manner, you can use the data on hand to market other products which your company might launch. The bottomline remains the same – once you have found the right geographic for your product, you can start looking for places with the same demographic.

It would be good if you had access to a computer with a geographics segmentation program installed. Again, just ask the local business associations, the researches and marketers, for information on programs that you will most likely need.

It is also quite possible that there is a central entity, which compiles all the demographic, geographic and psychographic data. More often than not, organizations like these share their information for a subscription fee. Hooking up your computer to their network, or getting the detailed research report would be sure ways for you to get access to great information, as you need it. Depending on what kind of access accounts they provide, you can have city, state, nationwide, or even worldwide geographics data at your fingertips.

Overall, geographic segmentation is one of the simplest form of segmentation today and it can be used only for sales basis or to increase your customer base. Through this form of segmentation, you can come to know why customers are not buying your product in some geographies, whereas in others, why it is selling like hot cakes.

Example of using geographic segmentation to expand your customer base

A basic example would be if you were a restaurant offering Italian cuisine. You know that your first restaurant worked best in places which were premium and which had shopping malls in the vicinity. Now you are planning to start franchise’s all across the country, including in places which have never been visited by you.

The net result would be that you will insist that all franchise’s send you the geographic data. This geographic data of regions across states can help you decide which areas are premium, why some of them are more suitable, and how others having competition will need more focus on marketing. Thus, through geographic segmentation, you know which areas will be best for expansion and useful for increasing the customer base.

Also read: Geographic segmentation and segmenting by geography

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About Hitesh Bhasin

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