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How to use postcodes for Direct Marketing precision

How to use postcodes for Direct Marketing precision

As the UK’s postcode system passes it’s 50th birthday, John Taylor, Managing Director of Geoplan, looks at postcode marketing from a 21st century perspective, and how it can help marketers to effectively profile customers and then to plan, implement and measure their campaigns.

While many of us have used postcodes on a relatively basic level to carry out jobs such as efficient and accurate delivery of direct mail, what’s less well known is the scope to which detailed demographic and business data has become available alongside postcodes, and how it can be combined with internal customer databases to offer a great deal of depth to help inform marketing decisions.

Before looking at specific applications, it’s important to view postcodes in their proper context and that they shouldn’t just be used in isolation.

Marketing professionals can potentially gain a great deal of insight by looking at their own customer data alongside postcode information, so if you have a regional or local demographic drawn from your own efforts, overlaying the specific trends and patterns available from postcode data can allow businesses to understand why certain sales patterns are occurring, for instance (or even more importantly, why they are not).

For advertising campaigns, spend and performance is increasingly important as is the ability to clearly identify and quantify discreet customer segments both in terms of lifestyle, behaviours and location.

Postcode data can allow both the agency and the client to understand who, where and how many customers are a suitable target for a given product, service or campaign approach. More importantly performance can be readily measured and steps taken to refine the approach on an ongoing basis.

In market research, postcode systems can assist agencies in new business development, presentation, customer profile identification and location, quota selection, field worker deployment, payment and management.

From a client perspective the deployment of postcode mapping should deliver robust and accurate samples, cost effective and relevant research results and a view on the data that would otherwise be lost with tables and graphs.

Direct Marketing applications such as door-to-door marketing need to effectively address issues such as resource deployment.  The efficient management of sales-based territories is important, because resource costs are high, so poor planning can have a very real financial impact.

Applying postcode data and processes can allow resource to be accurately allocated, and gaps, overlaps and wasted effort can be eradicated.

It is also worth considering how it can be applied to labour, fuel and printed matter and postal/fulfillment costs.  The overall objective is that new territories can be formed or existing territories can be fine tuned to improve performance and reduce costs.

Territory planning using postcodes should aim to reduce the overall effort required to cover a given territory, via efficient planning and reduced travel time.

It should allow campaign planners to allocate appropriately sized sales teams and give them the option to allocate more time on the ground to be spent with customers, rather than just ensuring a territory has been covered.

Customer Profiling

Customer profiling is central to many marketing disciplines, and usually the objective is to understand which customers are most attracted to your offer and deliver the highest return.

Once this is understood it is possible to calculate market penetration, potential and to quantify, identify and locate the candidate customers available to you in your marketplace.

One of the key things that a universally recognised postal code structure delivers is the provision of a common key that allows you to link your own data to market data, and to location data.

Whether this is demographic or business data, it assists in defining tone of voice, positioning and content of a given message or piece of communication.

This is extremely powerful allowing you to assess market penetration, identify new opportunities and assess how to deploy resource on the ground to best effect.

The key components of profiling are the use of geodemographics for consumer markets or Standard Industry Classifications (SIC) for business, which show that people, households or companies in the same area have broadly the same characteristics.

If applied sensibly these systems can contribute to effective segmentation and can dramatically reduce waste and improve performance.  The coding system helps to identify business type and can be used with turnover, employee size, length of trading and credit ratings to form a profile of your customer base.

In both cases the first step in the process is to attach the codes to a current database.

The codes that perform the best within in the data are then matched against the population or business universe to find more of the same.  The application of this type of data can deliver input at both abroad strategic level and can also inform localised sales and marketing activity.

The effective management and deployment of a marketing budget to deliver best return is a difficult process.

The age old question and required answer, surrounding which element of the mix is working, remains as elusive as ever.

It has become particularly difficult to unravel which element of the campaign has delivered with an increasing drive towards integrated marketing and the contribution of the internet.

That being said, there is no substitute for some good planning, accurate targeting and careful coding to enable some degree of analysis.

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