Site selection done right requires many things, but at the top of the list is knowing your customers.
When you’re a brand-new concept, the approach is different than if you have one or more successful locations established, but either way, you need to have a good handle on who is likely to buy from you and what leads them to you.
Here are a few tips that will lead you through the process.
1. Collect internal data.If you are just starting, you’ll have limited data to work with. But if you have one or more locations, study your current customers to identify patterns. You can learn a lot about your customers by comparing your different locations too. How do you collect this data? There are a few ways:
- Surveys – Surveys help you gather some of the qualitative data that helps you make good business decisions, such as customers’ opinions and behavior rationale. Learning more about the customer experience is helpful when deciding on what services/products to offer, pricing, and more. But surveys can also help you learn about your customers’ other shopping preferences, how far they’re willing to travel to reach your location, and more.
- Loyalty programs – Loyalty programs are a win-win for your customers and you. They help you track your customers’ transaction history, spending patterns, location, and demographic information. Paired with the qualitative data that surveys provide, this quantitative data is even more insightful.
Remember: if you have members, patients or other customers that provide their home or work location, you can learn a lot about them by pairing this data with third-party data such as demographics. That leads us to tip #2…
2. Collect third-party data.Learn everything you can about the people who are (or who you think are) your customers. How? By securing third-party data. If you don’t have your own data (we’ll talk more about that in a moment), there are many types of third-party data sources out there, including:
- Demographic data – Demographic data is offered by providers like Synergos Technologies, Inc.’s PopStats. When you’re considering a site, you can learn about the potential customers within that trade area, including their age, education, employment data, household income, household size, and more.
- Mobile data – In today’s mobile world, cell phone activity offers invaluable insights into consumer’ activities and trip patterns. That includes where they visit and shop. You can get mobile data from providers like Vista by UberMedia.
- Employment data – It’s also important to understand the types of businesses (and people who are employed by those businesses) around your site. This type of data comes from source like STI: WorkPlace.
3. Study similar businesses (i.e. analogs).
These might be competitors, but often times they may be just like you but operate in other parts of the country. The benefit of the latter is that they may be more likely to share information with you if they don’t perceive you as a threat. Although you may not know exactly who this similar business appeals to (or where they are most successful), you can assume that if they tend to locate near malls or in high income areas, that they’ve learned that they do better in these types of locations.
Studying your competition and similar businesses is always important, and especially if you are just starting out or have only one fairly new location (and therefore, little to no historical data to reference). Ask yourself these questions:
- If you’re new, what business concept is most similar to what you want your concept to be?
- If you’ve been in existence for a while, where else do your customers shop/dine/frequent?
Once you’ve answered these questions, create a customer profile for that competitor. Draw trade areas around a few of their typical locations and get to know everything you can about those trade areas. What are the socioeconomic characteristics? What is the local job market like? What are the trade area population’s income, eating-out expenditures, lifestyle information, household size, etc.? (Next up on the blog, we’ll be talking about trade areas, so stay tuned…)
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To choose the best retail sites (and other sites), you need to know who you’re serving. That customer analysis is essential to your site location strategy. The more you know about your customer or potential customer, after all, the better it is for business. But even before you’re open, that customer data will help you select locations in areas with the highest concentrations of your target customers.
Need help? Call SiteSeer. SiteSeer can help you use valuable data (both your own and third-party data) to learn more about your customers and competitors in order to make the smartest site selection decisions—now and as you expand.