Do the Right Homework when choosing a location for your small business

Published on September 1, 2010 in Uncategorized. 0 Comments

Eric Steckling, Pitney Bowes Business Insight

A response to Gladys Edmunds article “Location is important for your small business so do your homework first” published today in USA Today…

Gladys has some good suggestions for marketing techniques to help increase sales, but it is important to note that the right location for a used car lot will likely be different from an auto repair shop because the factors that affect the consumer’s purchasing decision are difference.  Specifically, consumers are generally willing to forego convenience to get a good value when purchasing a large ticket item such as a car, whereas convenience may be paramount when taking a car into the shop for routine service.  Whenever thinking about location, it is important to consider the “drivers” of the customer’s decision, and use metrics that accurately reflect those factors.

For example, consider your sales drivers.  Figure out the largest sources of your business, include drive-by traffic, the Internet, referrals and other advertising. Since a fair number of new customers will come to the lot because of interest in a cretin car they see parked there, it is important maximize those visits by choosing a location on a major “heavily trafficked” road. Additionally, the site should have good visibility, (ie, not obstructed by buildings, trees or other objects) easy access and preferably at or near an intersection or traffic light so passing motorists spend more time stopped in front of your lot. Internet driven sales will be similar if you are looking at sites within one market, but it is important to note that lots located in or just outside of large markets will drive more internet sales then lots located in small isolated markets. Referral and advertising driven sales come down do how you manage your business.

Co-tenancy is not as important for a used car dealership as it is for an auto repair shop because a trip to purchase a car is not as convenience based as having your car serviced. Your customers probably won’t buy a car from you just because they stopped nearby for some fresh vegetables.

The best way to gain confidence in your location decision is to come up with a list of all possible sites your are considering, build a spreadsheet and evaluate them with as much objective data as possible. As discussed, Traffic counts in front of the site should be an important metric to consider. Traffic count data is often available through state or county websites, if not, it may require a call to the county road commission to track down the information.  Another important sales driver for nearly all retailers is the number of people within close proximity to your site. Population information is free from the Census Bureau (www.census.gov) . For a used car dealership in a mid-sized market, see how many people are within 7 miles of each site. You could also check with automotive data provider Polk inc. (www.polk.com) to find out how many vehicles (and even the age of those vehicles) are within close proximity to your sites. You can also rank the sites against one another on more objective criteria as well, such as ingress/egress, visibility, number of direct competitors, ect. as additional criteria to see how they stack up against one another.

Also don’t forget to consider the demographics of the residents near the proposed sites. Used car lots typically draw from lower income households that don’t lease or buy new cars. Take a look at your current customers and see if you can draw conclusions about what characteristics make up your BEST customers. If you typically broker high-end or luxury used cars, you will have a different customer then if you bread and butter is cars below $10,000. Demographic data can often be accessed from the Census Bureau or from 3rd party vendors such as Pitney Bowes Business Insight (www.pbbi.com).

If you have insight into sales at similar dealerships in nearby markets (maybe friends or family in the business), it is important to include those locations in your analysis to use as benchmarks against the sites you have chosen.

Lastly, once the sites are ranked, weigh your selection against the cost of the site. If the 2nd best site is only a little worse and much less expensive it may end up being a better investment in the long run.

It may take two or three days to track down all the necessary information to make an informed decision, which is a small amount of time for years of potentially higher sales.

Good luck with your search,

Eric Steckling 
Consultant, Client Research
Pitney Bowes Business Insight, Predictive Analytics
34705 West Twelve Mile Road | Suite 200
Farmington Hills, MI  48331
O: 203.796.6452 | M: 248.798.8035 | F: 248.488.5102

Cultivating Customer Insight: Pitney Bowes Business Insight Launches New Corporate Blog

Published on August 25, 2010 in Uncategorized. 0 Comments

Leslie Nogue, Pitney Bowes Business Insight

Seeking insight on how to cultivate and grow your customer relationship?  Check out the Pitney Bowes Business Insight Corporate Blog.  Featuring articles from Prince Lal, Director of Strategy and New Business Development PBBI, and Clarence Hempfield, Director of Analyst Relations & Strategy PBBI, the new blog is an invaluable resource providing insight into customer relationship management. 

In the post Living Customer Experience, Prince Lal challenges organizations to evaluate if they are managing their customer life cycle or reacting to it.  In the post, Lal focuses our attention on the business processes, not just the customer experience.   Through a personal example, he demonstrates that the customer experience is often measured by the journey, not just the destination.  According to Lal, “(a)t the end of the day, a business that masterfully manages and aspires to influence the customer life cycle by generating a living customer experience strategy must have the fundamentals of business processes in place.” [read more...]

On the topic of Customer Segmentation, Clarence Hempfield’s post Five common sense processes for growing existing customer relationships, outlines Aaron Tellier’s simple and intuitive approach to customer segmentation that can and should be employed by organizations seeking to grow their customer relationships.  Mr. Tellier is the Director of CRM Strategy within Merrill Lynch’s Global Wealth & investment Management group, and he outlined this approach at  CRM Evolution 2010 conference.  In this post, Hempfield summarizes and assesses Tellier’s Retain, Repair, Confirm, Expand and Advocate Framework.  He concludes that the strength of this approach is in it’s simplicity.  He argues that while there is no “on-size fits all” framework for customer segmentation, the real dangers may lie in over thinking your segments. [read more...]

So, visit the new Pitney Bowes Business Insight Corporate Blog and let us know what you think!  Your customers will appreciate it.

World Of Data, One Simple Solution

Published on August 16, 2010 in Uncategorized. 0 Comments

Introducing Geosk™, the most efficient and economical way to access and purchase high quality spatial data.  Browse and view all available datasets, purchase data by the square mile or kilometer, and download it in the right format.  

Benefits of the Geosk™ Marketplace:

  • Access to the latest data 24/7
  • Quickly search and browse the data
  • Select only the data you want and need
  • Fast and easy download
  • Cost effective and reliable
  • Share your thoughts about how we can improve the Marketplace
So, join us for a 20 minute introduction to Pitney Bowes Business Insight’s new data-as-a-service offering. The new platform provides access to the geospatial industry’s largest data catalog on demand, enabling cost efficient, fast access to the most current geospatial data.

When?
World Of Data, One Simple Solution: Introducing Geosk
Thursday, August 26, 2010 2:00 pm
Eastern Daylight Time (New York, GMT-04:00)
Register Now

Census Changes in Canada Will Jeopardize Data Quality

Published on July 22, 2010 in Tom Exter. 0 Comments Tags: , , , , , , , .

Tom Exter, Ph.D., Chief Demographer, Pitney Bowes Business Insight

Recently, the Canadian government announced its decision to eliminate the traditional long-form Census questionnaire with a voluntary National Household Survey (NHS) in conjunction with Census 2011. While some supporters in the government agree with the change, the news has garnered backlash from demographers, geographers, statisticians and much of the population, including Canada’s Chief Statistician, who has resigned his post due to the Minister’s decision.
 

As a professional demographer with Pitney Bowes Business Insight in Toronto, I have used Canadian census results for the past 12 years, especially those generated by the long-form census questionnaire. Without the long-form census sample, valuable information used in both the public and private sector will be lost. In addition to the arguments for reinstating the long-form census presented by many Canadian organizations and professional societies including the Canadian Population Society, I would like to contribute the following considerations:

  • A voluntary survey, such as the proposed National Household Survey, would not be a sufficient alternative to the mandatory census sample survey. The traditional one-in-five household sample provides good information for every neighbourhood in Canada. In contrast, information from a voluntary sample survey would be biased, even at the provincial and national level.
  • A voluntary sample survey would have a much lower response rate, relative to the mandatory long-form census, and those who do respond would be, by definition, self-selected. Using information from a self-selected sample of unknown and really unknowable bias in health care planning, for example, would have adverse impacts on health care delivery in Canada.
  •  Filling out the long form may be onerous, but it is not an “invasion of privacy.” The rigorous confidentiality standards of Statistics Canada actually protect the privacy of Canadians because the individual responses are highly protected and only used in privacy-friendly ways (aggregated to relatively large geographic boundaries, for example) to generate information for businesses and government agencies.

Overall, the long-form census data are a significant contributor to the Canadian economy in both the private and public sectors. Businesses rely on census information to grow and help their customer base. Government agencies plan the delivery of services and the allocation of funds to government programs. The quality and utility of the long-form census data are also a testament to the highly professional staff at Statistics Canada who collect, compile, analyze, and disseminate the data to businesses and communities alike.

The significance of this decision for all users of Canadian demographic data cannot be overstated. Readers are encouraged to voice their concerns directly by writing to:
The Honourable Tony Clement
Minister of Industry
House of Commons
Ottawa, ON
K1A OA6

PBBI Canada is interested in your perspectives and questions as well. Please address them to tom.exter@pb.com.

Christmas in July?

Published on July 22, 2010 in Leslie Nogue. 0 Comments Tags: , , , .

Leslie Nogue, Pitney Bowes Business Insight

This week, Janet Cho of The Cleveland Plain Dealer, published an article titled “Retailers offer Christmas in July specials to woo reluctant shoppers”.  In the article, Janet identifies an emerging trend from retailers, such as Toys R Us, Sears, Kmart, Target and Things Remembered, who are all promoting Christmas this week in an effort to clear out inventory, boost sales, and invigorate reluctant shoppers.  Along with Santas on store signs decked out in a swimsuit, flip-flips and shades, these retailers are offering massive Christmas themed discounts, and even 24-hour Black Friday sales.

But will this work?  Deb Purcell, Director of Client Services at Pitney Bowes Business Insight talked to Janet about this trend.  Deb argues that most families are concentrated on back-to-school items and wardrobes.  Asking consumers to plan for a holiday six months in advance may be a stretch on the family budget.  The full story…

The Cleveland Plain Dealer is one of Ohio’s largest newspaper websites, Cleveland.com.   The site receives 1,645,430 unique monthly visitors.

In the press: Marketing Via Invoices and Billing Statements

Published on June 30, 2010 in Leslie Nogue. 0 Comments Tags: , , , , .

Leslie Nogue, Pitney Bowes Business Insight

The July edition of Marketing AdVents features a byline authored by Pitney Bowes Business Insight’s Director of Strategy, Suresh Nair.  In the article, Suresh discusses the manner in which companies are beginning to use statements and invoices as a marketing vehicle.  By combining transactional information with targeted communications in transactional documents such as statements, invoices, and notifications, organizations are able to generate sales, reduce churn, and build customer loyalty.

Suresh argues that marketers need to own the bill, encouraging them to influce the content, format and customization of the white space typically found on statements and transactional documents.  He also outlines just how effective transactional document marketing can be, given the 95% open rate on these types of documents.  Read the full story…

Spotlight on the Customer: Denny’s

Published on June 25, 2010 in Leslie Nogue. 0 Comments Tags: , , , .

Leslie Nogue, Pitney Bowes Business Insight

The Challenge
Denny’s, one of the largest, full service, family-style dining chains in the U.S., sought to expand its brand through new restaurant prototypes, new deployment environments and new markets. In 2007, Denny’s Franchise Development group launched the Franchise Growth Initiative (FGI) to optimize its company restaurant portfolio while ‘seeding’ franchise growth in key markets. To help evaluate and identify which company operated units to sell to franchisees, Denny’s needed to develop a more efficient and effective method of assessing existing units.

The Solution
Denny’s turned to Pitney Bowes Business Insight to provide the sophisticated predictive analytics and site modeling capabilities needed to help guide its refranchising efforts. For franchisees, Pitney Bowes Business Insight conducts sales forecasts and sales transfer studies, providing an objective third party assessment of a site’s potential opportunities and challenges. Denny’s works with Pitney Bowes Business Insight as a continuous partner to help the chain re-energize its brand and navigate the turbulent waters of the restaurant industry. Read more…

On the Hunt for Unique Economic Indicators

Published on May 26, 2010 in Kyle Bingham. 0 Comments Tags: , , , , , .

Kyle Bingham, Pitney Bowes Business Insight

Economists look at a variety of sources for indications of economic recovery – sources like national statistics on unemployment filings and consumer confidence scores. Lately, local indicators have been catching my attention. I live in a small town of 4,000 in the state of Michigan, a state which has the highest state unemployment rate in the country. Since 2007, four homes on my street have gone into foreclosure, but in the last year, all four of those properties have been sold. Although the sale prices of those homes are significantly lower than their values 3 years ago, the sales themselves may signal that the overall supply of foreclosures is decreasing. But while some local indicators are signaling economic improvement, others are showing that the economy is still struggling.

Local indicators abound. Recently, I took my vehicle in to get fixed at my automotive repair shop. When I quizzed the repairmen about business, they said it couldn’t be better. In the recession, it seems people are holding onto their vehicles longer to avoid high car payments, which translates into more trips to the shop for repairs.

Here’s an odd economic indicator: according to my uncle, a hearse driver in the central Wisconsin town in which I grew up, business is down because more people are opting for cremation, a cheaper alternative to burial.

Time magazine had an article that highlighted some odd economic indicators, like the increase in hikers on the Appalachian Trail. An article in Kiplinger.com took another amusing spin on economic signals, with 10 unique indicators to watch during the recession. I had no idea that, in some areas, the increase in bug bites may be attributed to the recession! A recent article in The Wall Street Journal cited an economist in San Francisco who can gauge the local economy by examining passenger tallies from the transit system near the Union Square shopping district.

Obviously, it is more relatable to talk about indicators at the local level, but what is interesting is that we don’t hear about these so-called indicators when the economy is doing well. Maybe in good economic times, people are too busy making money to notice. While it is fun to debate the local economic drivers, it is also important to follow the traditional market indicators. Pitney Bowes Business Insight has developed its own product, called MarketPulse, which correlates economic indicators with market-by-market sales performance of retailers and other operators.

What indicators are you seeing as both positive and negative? traditional in nature and more unique? Is your barber cutting more haircuts? Are there more moving vans at the local truck rental (more people moving into town than leaving)? How are sales at the local gift shop? Did your Girl Scout troop sell more or fewer cookies this year? Are parking tickets up or down in your town? Hopefully, all the signs point to an economy in recovery. Whether they get back to pre-recession levels, though, is fodder for another blog post.

Predictive Analytics to the Rescue

Published on May 20, 2010 in Brian Hill. 0 Comments Tags: , , , , , , .

Brian Hill, Pitney Bowes Business Insight

I recently read an International Franchise Association article that outlined what franchisors should be doing to help their franchisees obtain funding for new capital projects in today’s risk adverse environment.

The suggestions were good and spoke to the fact that educating lenders about the brand and providing lenders with supporting documentation beyond the FDD is required today to help push things through a system that is still dealing with lots of uncertainty.

Another sound recommendation hinted at, but not expanded on, would be for the franchisor to provide the lender with some indication of the new store’s likelihood for success. An earning’s claim? No, we know these words are heresy, but predictive analytics can go a long way towards this objective without having to provide an actual projected revenue or earnings .

What are the dynamics of the trade area – are they favorable? How many of this brand’s best customers reside proximate to the new location. Where are the competitors and how do they help or hurt this location? What are the unique site characteristics of the physical store itself as well as the retail environment that will help this unit perform well? How does this unit compare to other units in the chain in similar markets sizes and conditions?

A well-thought out predictive analytics plan can help a franchisor more than just evaluating real estate for their own corporate stores, that very knowledge may be the difference between helping a franchisee get funding or not.  Lenders have also gotten wise to this and are now starting to do their own advance real estate research too. It’s a wonder this isn’t a lending industry standard already!

Spotlight on the Customer: Prizm LP

Published on May 13, 2010 in Leslie Nogue. 0 Comments Tags: , , , , , , .

Leslie Nogue, Pitney Bowes Business Insight

The Challenge

Priszm’s KFC restaurants have achieved a coupon redemption rate unprecedented for QSRs, as well as the overall restaurant industry. To continuously improve this rate, Priszm needed to update its 10-year-old trade zones and develop a repeatable system to drive its direct mail campaigns.

The Solution

Priszm enlisted the help of Pitney Bowes Business Insight (PBBI), the leading global provider of location and communication intelligence solutions, to help the company more accurately target flyer distribution, which would increase the coupon redemption rate and drive sales. PBBI focused on the modeling and underlying data analysis to improve the planning aspect of Priszm’s direct mail program for its 430 KFC restaurant locations. Now, the company is able to utilize a wealth of information for each trade zone, including customer demographics and psychographics, store performance and competition, enabling the company to more accurately target direct marketing efforts. With the help of PBBI predictive analytics solutions, Priszm has broken all industry records, sometimes achieving as much as a 17 percent coupon redemption rate. [Full Story...]