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Defining your geographic target market


Where are the existing customers coming from?  How far do they travel?  Where are the calls coming from?  The answers to these questions help in better understanding where and how to find more of them. 

The boundary line of your “market territory” can be drawn on a map.  Your market territory may include area’s that are further from your store location in one direction, and closer in another direction.  It may reflect the location of your nearest competitors. 

If you’re using, or planning to use postal direct marketing, then it’s important to know your market territory in terms of the postal boundary lines.  This helps because you can potentially save a lot of money in postage.

Direct marketers look at zip code and carrier routes to include, or exclude area’s they define as their geographic market territory.  If you can concentrate marketing efforts to saturate a carrier route or zip code, your cost to deliver this marketing message can be reduced.  Ideally, you’ll want to mail most of the consumers within a give route or zip code, then not.  You want to try to avoid mailing on a few pieces in a zip code.  These few pieces will likely incur a higher postage rate than the other postal codes with a greater saturation of pieces per population.

When defining your geographic market territory, consider how far your clients will drive to reach you.  If your business doesn’t have a store location, then there are certainly other considerations.  If clients call you, you may want to define your market territory by the time-zone you’re located in.

But assuming you do have a store location and are trying to draw consumers into your store-front, some businesses look at the drive-time from their store the market.  Also considering the distance from the competition, and still others look at the specific neighborhoods that might appear more appropriate for their audience.  If wealth is a factor in affording your products and services, neighborhood income and home values can be considered.

We recommend looking at your existing customers. How many miles do they drive to get to your store?  How long does it take to drive to your store?  You may have a lot of customers coming from a certain area of town.  What is it about that area over other areas?

There’s a lot be learned by your existing customers.  But you should be collecting their names and addresses whenever possible, so to try to determine where they are driving from.  If you’re doing a direct mail campaign to the local consumer population, you may want to focus on certain areas, and not others.  Profiling your existing customers will help you better understand where new customers might come from, and where they won’t.

Some market territories can be defined by the boundaries of a PUD (Planned Urban Development).  Others might consider the Historic District around town or even school boundaries.  But while these area’s may be ideal to target, they may not correspond with the typical postal boundaries, none-the-less, they still may be identified.  While the postage may increase, we are able to carve out a polygon on a map to target these PUD’s, Historic Districts, or school boundaries.

Lastly, consider rivers and other landscapes in your community.  Will people cross the bridge to get to your location even if it’s a short distance?  Will they drive around a mountain or some other landmass to reach you?  If not, using the mapping technology and drawing a polygon that best describes your market territory is likely the best option.