82% of Spanish companies’ sales networks are poorly located, according to a study carried out by Daemon Quest’s analytical services. The report shows that in companies with an inadequate sales location, at least 42% of its shops or offices are located in places that are difficult to access, low-traffic streets, or simply in places where the company is far from its potential market. The most serious consequence of this is that they are losing up to 50% of their sales.

In order for a company to open any type of physical establishment, it is necessary to know not only where the competition is, but also where the customers are, especially the best ones, and where there are people or entities so similar as to be considered as potential customers in the future. Which streets hold the greatest concentration of this type of possible customers, what areas they are contained in, and consequently, where the company should locate itself.
Geomarketing techniques are the solution for all decisions having to do with geographical placement, because they allow us to carry out exhaustive analysis of any company’s sales network.

The process begins with making a grid of the desired city, using as a reference “blocks” and spaces that will later serve to compare according to their business potential. Current customers are placed on that grid as a “point” on the map with all the essential associated information: age, sex, occupation, studies, income and spending levels, when dealing with individuals; and information such as sector or turnover, when dealing with a company.

Each one of those grids has a series of specific buildings filled with housing, offices, and populated spaces where many other people with profiles similar to those of the company’s current customers live and work. This way, technology can help us to situate on the map all those people who could be our customers but are not yet. Each distinct profile constitutes a different potential, so that, by assigning a simple importance ratio to each possible customer based on the possibility of them becoming a consumer of our products, we can mark the city’s “hot areas” – where there is maximum and intense activity for our business – or the colder areas.

The results are surprising. A network that is apparently well-sized, with the appropriate number of offices, and which is bringing good results to the company, can suddenly be revealed as an underused structure because it does not cover the entirety of areas where the best customers are found.

Behind the term Geomarketing lies a sophisticated framework that makes use of the most powerful market tools (for example, Datamining, GIS: Geographical Information Systems, Statistical analysis such as CHAID, regression and Clustering, Datawarehouse, and socio-demographic sources), but that entire complex system is transformed into an accessible and simple product for the customer. All of that information is summarized clearly and concisely on a scorecard that is updated in real time, with which any director can visualize his or her company, and the information its offices generate, simply and with completely reliable information.

In conclusion, a well-structured Geomarketing study must cover the following phases and objectives:

• Perfectly situate each area’s typical population by purchasing power, profession, and spending characteristics, if we’re dealing with individuals; by sector and turnover, if we’re dealing with companies.
• Locate the company’s customers and identify its twins or potential customers
• Evaluate each city area by its degree of importance to the company according to its sales potential
• Identify in great detail the most appropriate places to open offices
• Define a Master Plan: expansion, closures, re-location, prioritized closures...