By: W. Eric Martin
Originally Published: Deliver Magazine - July 2007
To reach the right customers, you have to know where they are
Customers move with the wind, sometimes literally. When Hurricane Katrina struck southern Louisiana in August 2005, for example, the population of New Orleans fell from 485,000 to just a few thousand within days.
That’s a problem — especially if you’re a marketer whose business depends on reaching them. Of course, not all demographic changes are as severe and immediate as those caused by natural disasters. Neighborhoods also shift due to aging residents, the influx of new ethnic groups, or the appeal of a new hot spot across the country.
All these changes affect how direct mail campaigns reach new and existing customers. One way to look at customer movement is to take census data and grow it out over time — that is, to use the data to predict who will be living where in the future, explains Devon Wolfe, who leads the retail arm of Pitney Bowes
MapInfo. The company is a provider of location intelligence solutions, which is a combination of data, software and services that help marketers better visualize and understand this data. “One sample map is a dot density map in which every household is a black dot and an overlay of red dots shows areas of growth,” he says. “You can see the changes both positive and negative.”
For high-growth areas, Wolfe suggests turning to demographic companies that use new-mover databases, which include information on the age, sex and so on of who’s moving. “Many major providers feature these data sets and have a good idea of what’s happening on the ground,” he says. Another possibility is to look at change-of-address filings with the U.S. Postal Service.® “You can map out these changes and see what the trend looks like,” says Wolfe.
For a more precise look at current-population trends, Wolfe suggests tapping into household databases provided by credit card providers. These databases list the homeowner’s age and let you target more precisely. By comparing current and past information, you can determine whether your customer base is growing and, if so, which geographic areas deserve more attention.
With a major disaster like Katrina, don’t assume that every household in its path is affected the same way. “Katrina was a localized phenomenon,” says Wolfe. “St. Bernard Parish is 90-percent devastated, while Metairie looks like nothing happened.” Looking at delivery statistics from the Post Office™ provides some information about household activity in the area — and therefore gives marketers clues of where they can direct their efforts — but because abandoned houses and apartments can still receive mail, Wolfe says that other measures are necessary.
Some data providers have turned to remote sensing — that is, aerial and satellite technologies that can monitor activity on the ground. “In the immediate aftermath of Katrina, aerial photos showed where the flood waters were,” says Wolfe. “You could overlay those areas with the demographic data you have, and understand the magnitude of the number of people affected. Now you can take aerial photographs and tell which houses have been repaired, which lets you assess what was lost and who’s coming back into the area.”
Wolfe says that only large-scale disasters permanently affect a region’s demographics. “With the average hurricane that hits southern Florida, a category 1 or 2, you see a spike of vacancies, then people come back,” he says.
Using the demographic research of a company like Pitney Bowes MapInfo gives you a good starting base for contacting customers, but you have to learn how to parse the data for best results. “If you’re a retailer, you don’t want to look at blanketing ZIP™ Codes, but rather determine how far away a ZIP Code is from an outlet and how much that household is worth,” says Wolfe. “You can have a household close to you that’s not really right for your profile, but that household will shop more than someone who’s a good fit and farther away.
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