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What Are Geographic Information Systems?


Geographic Information Systems, better known as GIS, broadly refers to technologies, processes and methods that can be used for data analysis across numerous industries and governmental services. GIS is difficult to define because numerous types of GIS exist for different purposes and for different types of analysis and decision-making. For marketing departments, GIS offers the ability to collect, store, edit, analyze, share and display data about geographic location that can assist corporations and businesses with the best means of targeting and understanding their core customers.

How Is GIS Relevant for Marketers?

Understanding not only where your best customers are, but who those customers are, is an invaluable marketing tool. Targeted GIS software has numerous applications for marketers, from location-related purchasing patterns to population density estimates when choosing retail building sites.

GIS provides answers to fundamental questions in marketing management related to the target market and its potential. Insights assist businesses in the decision-making process for the following:

  • Direct marketing.
  • Advertising.
  • Promotional campaigns.
  • Salesforce needs.
  • Customer service.
  • Product development.
  • Outlet expansion.
  • Budget allocation.

By integrating GIS into marketing software, businesses can learn why some products and services are more popular in some areas than others. This directly translates to better efficiency for marketers who can locate customer service centers in specific geographic locations as well as greater convenience for customers when marketers align purchasing or service needs with demographic areas.

How Can GIS Help Target Customers?

The ability of marketers to understand their customers' demographics, purchasing patterns and other behaviors allows businesses to retain existing customers, locate new customers and meet purchasing demands. For companies that incorporate GIS, "Profiling" and "Segmenting" are two tracking methods for gleaning insights into behaviors that offer opportunities for cross-selling, loyalty programs and promotional campaigns.

Profiling

Crafting precise marketing campaigns is essential for successful outcomes, and profiling allows marketers to not only understand buying patterns, but even predict future behavior. GIS images pinpoint geographic locations with a higher density of best customers.

Using GIS to profile customers allows marketers to do the following:

  • Map most frequent customers.
  • Target best customers for loyalty campaigns.
  • Analyze the best customer sales.
  • Analyze relationships between customers' preferences and underperforming products.

Segmenting

Marketers can also use the process of segmentation to identify customer groups by integrating demographic, geographic, purchasing and spending characteristics into GIS applications that can improve multi-channel marketing efforts.

Segmenting customers allows marketers to do the following:

  • Group customers by product preference.
  • Display subsets by product.
  • Analyze customer groups by territory.
  • Target messaging to best segments.

Integrating data from other sources, such as call records or campaign responses, not only offers businesses a better understanding of demographic behavior but also illustrates the sales potential of specific territories.

Targeted GIS also allows marketers to test advertising campaigns to specific customer segments before committing resources to a blanket marketing campaign. By testing a representative sample of the target demographic, businesses can test all facets of customer responses to their advertising, including approach, timing, frequency and effectiveness. GIS can allow marketers to track test results to modify future advertising campaigns and other marketing approaches.

How Can GIS Help Analyze Customer Behavior?

Understanding customers' likes and dislikes is the foundation of successful marketing. Where they buy, how often they buy, how much they spend, and how they make their purchasing decisions can all be analyzed by using GIS. A study of customer tendencies and traits in relation to demographic information allows marketers to make better decisions to meet the changing needs of customers.

Once businesses understand customer behavior, they are better able to predict future demand. This can lead to improved product development and more effective advertising campaigns. Understanding where the best customers shop will aid businesses as they plan store expansion or customer service centers. Allocating resources where customer demand is high can help businesses save money and can also aid in retaining the best customers through improved relationship management.

What Is the Future of GIS?

Since its inception over three decades ago, Geographic Information Systems continues to evolve as new and more advanced technologies become available. As GIS becomes more multi-dimensional and continues to progress alongside measurement technologies, information gathering will become more quantitative to enable analytics. The amount of collected and stored data continues to increase exponentially, but the collection of data is useless without the ability to gain insights from the vast amounts of information.

What does this mean for the marketing profession? Insights gleaned from GIS could lead to predictive analysis, including:

  • What is the next big trend?
  • Where will my future customers shop?
  • What types of merchandise will my future customers demand?
  • Where should I allocate my resources?
  • Where should my next retail chain outlet be located?

As technologies continue to advance, data collection will occur in real time. Businesses will have the ability to forecast where products are needed, which will impact warehouse and distribution strategies, such as whether to increase shipping fleets, add or change shipping routes, or relocate distribution centers.

Providing marketers with relevant, timely and accurate information will drive businesses' decision-making process, but it's not enough to simply collect data; the ability to gain insights into customer behavior is essential for businesses to thrive now and into the future.

Learn more about SOU's online MBA with a Concentration in Marketing.


Sources:

CBS News: Using Geographic Information in Marketing

USC Dornsife: The Relationship Between GIS and Marketing

Esri: GSI for Direct Marketing

PR Newswire: Geographic Information System (GIS) Market Worth 10.12 Billion USD by 2023

Esri: Looking Forward Again: Four Thoughts on the Future of GIS in 2015 and Beyond

GeoComputation: Integrating Rank Correlation Techniques With GIS for Marketing Analysis

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