The importance of where: 12 ways geographic data can improve decision-making

People commonly associate “Location, location, location” with the real estate business. But in fact, geography is crucial to decisions in every industry—not to mention public policy. Where do I concentrate my sales efforts? How do I determine the best site for my store? How should I deploy my police officers? What’s the fairest way to redraw a Congressional district?

In the past, decision-makers had to rely on limited information and fairly rudimentary analysis. No more. Sophisticated software now allows them to map vast amounts of data against specific locations so they can make meaningful comparisons and more informed decisions.

Seemingly unrelated data points take on new meaning when they’re visualized in relation to geographic coordinates. Hidden patterns become clear, new factors reveal themselves, and decision-makers gain both valuable insights and a persuasive way to present them.

Nearly 70 percent of all business data can be analyzed in this way, according to IDC, an independent technology research firm. As accuracy increases, it is not surprising that organizations now rely on geographical data analysis to improve decision-making across a multitude of activities.

1. Site selection: Opening a new store or branch location can cost millions of dollars, with payback often calculated in years. Companies can now analyze market demographics, competition and consumer buying habits across alternative geographies in order to predict events well into the future. This is especially important in times of economic uncertainty, when many companies are deciding whether or not to close or relocate stores or branch locations.

2. Customer segmentation: Marketers can go beyond simple postal codes to identify households at the neighborhood and street level that are most likely to become new customers or to purchase additional products and services. Color-coded maps overlay multiple levels of data, including revenue, Census information, proximity and customer penetration—making it easy to visualize how market demographics correspond to sales potential.

3. E-tailing: The exponential growth of online shopping adds another dimension to marketing decisions. While consumers may transact in a “virtual world,” they still access the Web from specific locations. Understanding the relationship between where online customers live and work vis-à-vis the location of retail locations and competitive outlets makes it easier to develop strategies that best leverage both on- and off-line efforts.

4. Crime fighting: While governments have long used geo- technology to support public works decisions, such as highway and sewer planning, a number of specialized applications now incorporate location intelligence in the area of crime mapping. In many municipalities, citizens now have a centralized portal where criminal intelligence and information is shared by law enforcement at the local, state and federal levels—giving law enforcement agencies the insight needed to solve and prevent crimes.

5. E-government: In the public sector, location intelligence is used to plan for growth, improve public services and share information with citizens. New government legislation, such as INSPIRE in Europe, is changing the way public organizations manage and share their GIS data. Many agencies have found ways to keep costs down, serve citizens and comply with new government mandates.

6. Customer onboarding: The opening of a new account is a critical time in the relationship between a customer and a company. Geocoding applications help validate the exact location of new accounts so correspondence and shipments reach customers in a timely fashion. Increasingly, organizations are also using location-based information to make real-time decisions on which products or services to cross-sell in the first 90 days, when customers are most open to expanding their relationship with a business.

7. Tax management: State and local tax jurisdictions involve complex rules and boundaries that have no relationship to postal codes—and the failure to collect or pay appropriate taxes can result in significant penalties. This need is especially prevalent in certain industries, such as telecommunications, where miles of fiber optic cable may cut across hundreds of distinct tax jurisdictions—each with unique rules and tax rates.

8. Risk management: In financial services, predictive analytics based on geo-demographics now provide an early warning mechanism to detect borrowers who may be at risk of bankruptcy and default. In the insurance industry, companies have integrated spatial analysis into underwriting and claims management systems—instantly calculating the distance between a home and the nearest fire hydrant, flood plain or fault line.

9. Customer care: In many companies, telephone reps now navigate intuitive, user-friendly mapping applications to make on-the-spot decisions based on location. In most cases, these technologies are employed to identify cross-sell opportunities and provide accurate information to customers regarding network access.

10. Fraud detection: Due in part to the recent recession, fraud attempts are on the rise and more organizations are integrating customer data quality and location intelligence into their fraud management systems. In the credit card industry, geo-based analytics can instantly assess whether two credit card purchases could have been made by the same person using the same card based on time and distance.

11. Routing and fleet management: As consumers shift to online shopping, location intelligence is increasing part of the delivery system, as retailers and shippers calculate optimum drive routes and determine where to locate distribution centers—decisions that provide for faster deliveries and lower costs.

12. Customer self-service: With an ability to integrate vast amounts of data, analytics and customer-friendly mapping applications, customers can now view the same information used by back-office personnel. In one instance, an insurance company shared details on a hurricane’s path online, discouraging individuals from submitting false claims.