November 17th, 2009 by Pitney Bowes
By Jon Winslow
When MapInfo began knocking on doors with the world’s first desktop GIS in 1986, few business managers understood the concept of geo-spatial analysis or the power of LI (location intelligence).
Today, GIS technology is pervasive in society. Thirty-one percent of Americans own a portable navigation device. iPhone apps use GPS coordinates to find nearby restaurants. You can hardly find a business website that doesn’t provide a link to an online map and driving directions. And four years since its release, Google Earth has been installed on over 500 million machines.
As for the future, industry experts predict that the GIS market will grow 50% within the next five years.
For business analysts, IT heads and developers who have relied on sophisticated location intelligent solutions for years, this sudden burst of GIS activity in the consumer market has its pros and cons.
- On the one hand, business executives and financial officers who must approve and fund LI initiatives have personal experience with mapping and spatial analysis. Discussions can quickly move from concept to concrete application as everyone has some familiarity with the underlying technology.
- On the other hand, these same executives think they know what location intelligence is based on their experience with simple consumer applications – they often don’t understand what could be done with a business-strength solution. After all, you can just download maps for free, correct?
Professionals understand that location intelligent technology does not necessarily equate to business intelligence. So in a world where a bit of information can be dangerous, GIS experts must in some cases work harder to demonstrate the value of their work.
A few weeks ago, I had the pleasure of speaking with many such professionals at the AGI GeoCommunity conference in the United Kingdom. When you are around people who understand that the hot, new “find the nearest” app making headlines today is really ho-hum ten-year-old technology, it gets you that much more energized about the leading-edge innovations that are making spatial analysis so much more valuable to business today.
These experts, who are out in front of the current GIS wave, have their eye on emerging technologies and incremental improvements that provide significant advantages. Depending on their role and responsibilities, business users are excited about what today’s advanced technology can deliver: more power, greater simplicity, increased flexibility and greater control.
- The Professional. High-end users that need to create and analyze data see 3-D visualization as a potent tool, especially when you can combine satellite imagery with complex, proprietary geo-data. The ability to instantly access and analyze stores, markets and trading areas – overlay large number of polygons – and color code areas based on revenue, demographics, proximity and penetration, for example, generates insights that lead to better, more profitable decisions. In a word, they are excited about the power.
- The Enterprise Planner. As business intelligence takes on a more important role across business functions, everyone is looking for fast, effective ways to install Web solutions. Today’s newest technologies are driven by the same sophisticated spatial analysis engines that companies have relied on for their most important decisions. Through RIA and tiling, they offer an intuitive, out-of-the box experience that is as simple and stylish as any of the consumer-driven apps. Providing user-friendly access to complex LI tools is only getting easier.
- The Developer. Individuals responsible for custom solutions and LI augmentation see advances in both functionality and flexibility. While some developers are loyal to their favorite API, they are finding that more advanced geo-spatial programs are being created to fit their expertise. Built using open-source technology, developers can easily add to and adapt these solutions without the risks of a pure home-grown application. In practice, that means a simple API designed to route trucks, for example, can be easily enhanced, edited, data-enabled or embedded into desktops and mobile devices.
- The Data Manager. As 70% of all business data contains a geographic component, data stewards are looking for ways to help people access high volumes of geo-data without losing control. Now, location intelligence solutions make it easy to access data where it is stored, whether that’s Oracle, SQL Servers, flat files, etc., and users can manage, access and administer information through queries that do not disrupt the underlying data integrity or governance principles.
While these emerging technologies and incremental improvements mean little to the soccer mom who simply needs directions to the next away game, the value of true location intelligence has never been more appreciated than today. For organizations dealing with complex challenges, this additional power, simplicity, flexibility and control translates into lower costs, improved customer satisfaction and profitable growth.
Are you out in front of the GIS wave? Learn more about the latest solutions – and be sure to let us know what trends, technologies and applications interest you most.
November 17th, 2009 by Pitney Bowes
By Chris McCartney
Consumers have become increasingly dependent on mapping applications ever since MapQuest went online in 1996. Today, maps are incorporated into search engines, company Web sites and according to a recent Forrester survey, nearly a third of North American adults own their own map-driven navigation device.
Developers took full advantage of open source technology when code for Google Maps API became available in 2005. The simplicity of Google and alternatives such as Bing Maps made it easy for organizations to provide customers with simple, intuitive Web-based mapping services.
Meanwhile, managers in back-office operations shied away from these basic mapping tools because they simply could not support the complex data crunching and spatial analysis necessary to make smart business decisions. Business-focused solutions (such as our own MapInfo Professional) delivered the advanced location intelligence and predictive analytics necessary to underwrite risk, design networks and plan retail expansions.
More recently, however, new technology has closed the gap between consumer simplicity and back-office sophistication – giving companies the ability to leverage common mapping applications that can handle the heavy lifting with a smile.
From a customer relationship point of view, this adds a much-needed level of consistency. Now, information presented on Web sites can reflect the realities of how a company operates. Making such accurate, up-to-date mapping and spatial analysis available to consumers helps increase confidence and satisfaction. From an efficiency point of view, the ability to access a centralized database helps improve data quality and eliminate unnecessary redundancies.
Consider this real-life example: after a hurricane, one UK insurance company experienced a wave of claims—some of which fell outside the path of the storm. Rather than alienate customers with flat-out denials, the company updated their Web mapping using GIS information that geo-coded the exact path of the hurricane. They applied a generous buffer zone, which eliminated any chance of error and invited claimants to double check themselves whether they really wanted to submit that claim. With the ability to see the same information that underwriters saw, many decided to “unsubmit” their request – saving the company time, money and hassles.
What’s special about these new technologies? Plenty. First, they are driven by the same sophisticated spatial analysis engines that companies have relied on for their most important decisions. Through RIA and tiling, they offer an intuitive, out-of-the box experience that is as simple and stylish as any of the consumer-driven apps. Built using open-source technology, developers can easily add to and adapt these solutions without the risks of a pure home-grown application.
So, are you interested in getting on the same map with you customers? For more insights, check out the recap from our recent Stratus RIA Workshop. We look forward to your thoughts…
November 3rd, 2009 by Pitney Bowes
By Sebastien Rancourt
Canadian privacy laws set ground rules on how organizations may collect, use and disclose personal information. Under the Personal Information Protection and Electronic Documents Act, for example, personal information can only be collected when it is gathered with the knowledge and consent of the consumer-and only used for the reasons for which it was gathered.
Despite these data challenges, marketers and strategic planners have found effective ways to understand customer needs and create actionable customer segments. These insights and best practices-while particularly germane in Canada-are relevant to anyone looking to improve results by targeting more effectively.
Today’s leading solutions begin with geo-demographic clusters. While cluster segmentation strategies have existed for decades, contemporary clustering methods use robust statistical data and advanced analytical power to capture, create and measure more precise customer segments based on geography, demographics and lifestyles. With the right data and analytical tools, organizations can characterize the behavior of every clustered customer-from their favorite movies and foods to their preferred attire and avocations-enabling users to more accurately predict customers’ responses to every campaign.
Professionals in retail, financial services, media planning, real estate and restaurants, among others, rely on cluster segmentation to improve decision making and business results. Yet with the enhancements made in recent years, some marketers have yet to incorporate the latest advances which can boost overall performance. In speaking with experts across Canada, we’ve identified a series of best practices to help guide your next steps.
Segment by neighborhood, not postal codes. Some segmentation strategies rely on postal codes, which can lead to problems down the road. Each month, as many as 5% of the roughly 850,000 six-digit Canadian postal codes change, as Canada Post updates this system solely on the basis of their mail delivery needs. Not only does this taint campaigns in the short-term, it makes it nearly impossible to manage year-over-year modeling and analysis.
The best neighborhood segmentation clusters begin with census data at the dissemination area levels-which are the lowest levels for which reliable census data are published-providing hundreds of reliable data variables. In addition to data accuracy, these neighborhood-based models offer year-over-year consistency, so marketers can build on past success over time.
Incorporate household-level insights. This past year, leading cluster models have found ways to use more comprehensive household level data, incorporating consumer information that goes far beyond census findings. These inputs, which conform to Canadian privacy laws, represent an unprecedented level of detail and behavior-based data-and create a more high-definition view of customers and prospects.
Maximize data points. Not all household level data is the same. Some cluster models are built extrapolating data from as few as 8,000 surveys across the full population of 33 million Canadians. More reliable cluster models will analyze self-reported data from as many as 10 million individuals-providing for more accurate targeting and a lot less guesswork.
Overall, organizations that employ these best practices will benefit from a multidimensional framework that makes it possible to sort through the complexity of Canadian consumer culture without having to manipulate literally hundreds of census and survey variables.
One such solution is PSYTE HD, the Pitney Bowes Business Insight segmentation system created using an innovative two-step clustering process. The 59 clusters identified, including Canadian Elite, Joie de Vivre, Urban Verve and Next Gen Rising, leverage the largest and most robust repository of Canadian consumer intelligence to date-making it easier for organizations to locate new opportunities, connect with customers and communicate more efficiently. We invite you to learn more and look forward to your feedback.
October 20th, 2009 by Pitney Bowes
Cross-posted at http://li.pbbiblogs.com/
At this year’s insights ’09 user conference, we shared the stage with Microsoft and demonstrated how organizations can “power up” their Bing Maps to make better decisions using spatial analysis.
Developers were particularly interested in learning how our leading software development kit turned the maps generated through Bing and Google into powerful business tools. In a sense, making it easy for developers to transform cartographic images into true location intelligence.
While there are advantages to comprehensive desktop applications, Web 2.0 does provide an environment where you can interact and modify and your map tile images instantly. So it’s not surprising that the use of low-cost, web-generated imagery offered through Bing Maps (formerly Virtual Earth) and Google is common.
What’s missing from Bing and Google? Two things. Your data and a powerful analytics engine. That’s where SDKs comes into play. No matter how much you can accomplish in a browser, you need to do more if you want to make decisions that will advance your business.
Consider a retailer choosing a site for their next location. After you plot in your existing sites, you may want to overlay competitors, customers, market demographics, use SQL JOIN clauses, create buffers, run point-in-polygon analyses and more—that’s where middleware and enterprise mapping comes in to play.
The right developer tools allow you to integrate your own data and conduct complex spatial analysts. A tile-based Rich Internet Application architecture ensures that map retrieval is fast, client side interactivity high, and server-side processing reduced. Designed for enterprise use, the tile-based approach provides for the navigation of sophisticated quantitative data in a consistent and intuitive manner—without sacrificing cartographic quality.
Tile servers are becoming increasing popular for web mapping because they allow the application to pre-render parts of the map and store them as images. The ability to combine web, proxy and private caches based on site and user needs provides developers with many options and possible configurations. In other words, with the right tools your favorite mapping applications can now do the heavy lifting needed to solve today’s complex business challenges. If interested, you can learn more and download a free eval of the latest PBBI solution at http://www.pbinsight.com/welcome/mapxtreme7/
October 15th, 2009 by Pitney Bowes
Al Beery and Brian Hill, Pitney Bowes Business Insight
Over the next few months, consumers will head to the malls, superstores, and in increasing numbers, to their laptops—and retailers will be looking for any edge they can find to increase sales and margins during this holiday shopping season.
Given the sluggish economy, cost pressures and changing consumer behaviors, there has never been a better time to leverage Location Intelligence in your business. Retailers, manufacturers and shippers will find ways this year to move product to more people in smart, cost-effective ways by analyzing the relationship between distribution centers, retail sites, critical customer segments and household locations.
This is especially critical in light of expected shifts in customer behavior. The down economy means that many customers are buying less, they’re more price-conscious, and they are more selective about what they buy. Many customers are also buying more online—increasing the role of logistics and fleet management,
Using location intelligence to chart how these trends are impacting your business is often the key to greater profitability. Better Location Intelligence can help you to:
• Better project performance of existing retail sites
• Determine optimal locations for new retail sites
• More effectively allocate marketing dollars
• Chart more efficient delivery routes
• Reassess distribution-center locations in light of the increased proportion of direct-to-consumer shipping
In fact, companies that invest in top-quality location intelligence solutions often see positive ROI inside of six months. And many achieve a six-figure return on their investment within the year. Add in the intangibles—happier customers, happier delivery people, and happier customer-service personnel—these all result from greater efficiencies, better communications, and better information sharing throughout your organization.
More information on how Location Intelligence and other data-quality improvements can enhance day-to-day and long-term business performance are available in our White Paper Special Delivery: Just-in-Time Savings or by speaking with your local PBBI representative at 800.327.8627 or via email at email@example.com.
September 24th, 2009 by Pitney Bowes
by Brian Diepold
Cross posted at http://analytics.pbbiblogs.com/
Among other effects, the current recession is likely to have an immediate and lasting impact on the branch deployment strategies in our industry. The immediate impact is fairly easy to predict. That is, net branch growth rate will decline significantly, most likely with some contraction over 2009 and 2010. But, what should we expect to see happen after the recession?
In the period just after past recessions, we have experienced a short-term spike in branch growth, likely due to some catch-up effects, followed by a return to the normal trend. It would be easy to assume that we could be in for the same kind of response after this recession.
But, I think there are several factors working against a return to the old patterns of branch growth. Most importantly, we have the ever-present alternative channel argument. While the maturing of remote banking may play a role in future branch growth, I believe that the dominant effect will be driven by overall residential development patterns.
If we look at the pockets of high branch growth over the past decade, much of the net new branches have logically followed the suburban development patterns. With every new McMansion development, branches followed to serve those communities. Unfortunately, many of those communities are being hit the hardest by the collapse of the real estate market. Prices are dropping much faster in the outer fringe development than they are in the urban core in many places. One could argue that these developments represent much of the excess inventory in the residential housing market today. As a result, it’s unlikely that we will see more of these developments popping up any time soon.
As the real estate market corrects itself, one of the numbers that is going back up is the percent of the population that rents instead of owning a home. Renters tend to reside closer in to the urban core in more densely populated parts of the market. Coincidentally, banks already have mature branch networks in these parts of the market. That is not to say there will be no new branches built, but simply that the decisions may move towards relocations, renovations, and need-based in-fill of the network, rather than continuing to grow with the residential development.
This is a unique recession, and as a result there will be unique events that unfold during the recovery period as well. One of them, I believe, is going to be a modest transformation of residential development patterns. We should see a move back towards more densely populated residential development. I don’t expect this to be a radical change, but as it changes on the margin, that should have an impact on where we look for new branch opportunities.
The result for branching is a new normal that probably doesn’t include a return to steady branch growth. There will be some branch growth, but I expect it to be more in line – finally – with household and population trends.
September 8th, 2009 by Pitney Bowes
By Steve Seabury
While the 2010 U.S. Census is still months away, a recent advance in data analytics demonstrates how amazing things can happen when customer and location intelligence comes together.
For years, real estate specialists and strategic planners have relied on spatial analysis to make decisions that required significant investments. The power of location intelligence proved invaluable on many fronts. The stability of neighborhood demographics enabled decision-makers to hone in on trends that could impact long-term profitability. The precise nature of geocoding provided for year-over-year consistency. Plus, the ability to visualize and map customers, prospects and competition against existing and planned sites let to key insights… insights that have enabled banks, retailers, utilities and many other industry executives to exceed expectations.
At the other end of the spectrum, marketers turned to household segmentation models. Robust demographic data at the household level could be used to create clusters—segments of consumers who shared similar lifestyles, characteristics and needs. This lifecycle approach made it easy to target the ‘retired affluent’, ‘young families’, ‘single post-grads’ and dozens of other key markets. And with records updated quarterly (or even more frequently), marketers could respond quickly to life events.
Now for the first time, these distinct approaches have been combined to deliver enhanced network performance management and customer analytics solutions. Using deeper, more precise demographic data, organizations can make more informed and timely decisions about critical real estate and marketing initiatives. These next generation demographic data tools incorporate advantages from both disciplines and can help organizations overcome today’s top challenges, for example:
- Enables marketers and strategic planers to work from the same platform
- Compares changes in household make-up with neighborhood shifts to uncover pockets of opportunity
- Normalizes household data to block out the noise of short-term events to create more accurate projections
- Eliminates the need for ZIP Code targeting, which rarely reflect true neighborhood and lifecycle segments
- Links store network performance with customer relationship management strategies
Of course, creating the best of both worlds requires you to start with the best in both worlds. That’s why Pitney Bowes Business Insight teamed up with the Gadberry Group and Acxiom® Corporation and their PersonicX® segmentation system.
These data sources compile consumer data from over 100 sources, including public records, the U.S. Census and self-reported data. Measurements for accuracy and completeness are part of a sophisticated multi-source build process where individual data attributes are compared across multiple providers. While mapping and analytic tools previously dealt with neighborhood and block-level data, these new tools drill down to race, ethnicity, gender, education, marital status, occupation, income and lifecycle on an individual household level.
In many ways, incorporating Gadberry and Acxiom data into PBBI predictive analytics models will enable organizations to bridge the gap between real estate decision-making and marketing strategy – incorporating the best of both.
For more information on the newest technologies, visit http://go.pbinsight.com/household-derived-demographics.
July 29th, 2009 by Pitney Bowes
Chris Cherry, Pitney Bowes Business Insight
The Federal government has allocated $7.2 Billion in stimulus funds for use in expanding broadband infrastructure in un-served and underserved areas across the United States. Applications for funding are due August 14, 2009.
To apply, enterprising telecom companies must complete a 39-page application and supply very specific information about the markets they will serve. This information includes maps of areas to be served as well as data on numbers of households, population, population density, and average income—all at the Census Block level. The data must illustrate both market need and market type, and companies must demonstrate that 75% or more of the funds they receive will be used in rural areas.
Previously, the effort required to compile this level of precise data could have been overwhelming. Today, however, leading-edge location intelligence solutions are making this aspect of the application process simple. “Demographic Data Bundles” – an offering specifically designed to compile and present the required maps and Census Block Level Data for these applications – can make all the difference.
Dozens of telecom providers have approached us since news of the stimulus funds application came out, and many are already using Demographic Data Bundles to garner their fair share of these much-needed funds. It’s very exciting for us, because not only are we helping them turn these applications around faster and more painlessly, we’re showing them how location intelligence can help them identify where to grow their businesses and do so most profitably.
If interested, information on the application for broadband infrastructure funds can be found at http://broadbandusa.sc.egov.usda.gov/.
Are you using location intelligence today? Where has it made the biggest difference for your business? Use of geo-coding and location intelligence is growing more prevalent every day. It’s used for marketing, logistics, strategic planning – the list goes on and on. In fact, as of last year, 80% of data maintained by companies had a geographic component, and GPS and mobile commerce solutions are pushing that percent higher every day.
To learn more about location intelligence and demographic data bundles, check out http://analytics.pbbiblogs.com/2009/07/28/deadline-approaches-for-broadband-communications-stimulus-funds/
July 14th, 2009 by Pitney Bowes
By Deb Purcell
It’s certainly been a tough year for businesses of all kinds. Real estate sales are down. Retail performance is down. And more than 20 large retail chains have gone into liquidation and shut down more than 3000 storefronts.
Yet, there’s a definite silver lining for 2008 survivors. It comes in the form of decreased competition for both good customers and better real estate. Trends indicate that, while things may be bad, they are getting better; and, with the massive shifts in the business landscape, there are real opportunities out there for the taking.
So, what are the keys to growing a business in today’s still-tough times? Here are a few important thoughts:
Opportunity #1: Know and serve your customer: Serving your customer may seem obvious, but have you really considered how your customers’ needs may have changed with the economic downturn. Today, it’s all about price. Everyone is shopping for a better deal – and the winners are those who present the best price/value combination. Keeping a customer costs less than getting a new one. Show empathy for you customers’ situations by offering them true value, so they don’t need to look else where, and give them incentives to come back and see you soon and often. Loyalty may be lacking today – but this presents an opportunity to strengthen customer relations for the longer term.
Opportunity #2: Turn others’ losses into your gain: Store closings have always meant abandoned customers and real estate, but the dynamics are different today. Many store closings have taken place in otherwise healthy markets – they are a result of corporate liquidations, not local-market decline. Careful geographic analysis can help you to identify now-underserved markets that fit your customer profile. And, with vacancies up and costs down, lease renegotiation is the name of the game in real estate today. Explore your opportunities now, before customers settle into new shopping patterns and the window to lock in lower lease rates closes..
Opportunity #3: Prepare for Market Recovery and Underlying Macro Trends: The recession may have hit everyone, but the degree of impact and ultimately recovery rates will vary. As you look for new opportunities, look for recovering markets – markets where the underlying trends will bode a strong rebound. And, as you plan, remember that, while the recession is at the top of everyone’s mind today, other dynamics – growth in online retailing, demographic shifts in the population in age and diversity, and “green trends” will continue to impact retail markets. Use the current slowdown as an opportunity to plan effectively for these known long-term trends.
Comments and questions welcome – would love to hear where else you see opportunity to rise from the ashes of 2008/2009…
Cross posted at http://analytics.pbbiblogs.com/