Six Reasons to Geocode for Better Selections

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Considering the benefits of geocoding, it is amazing how few lists include the address latitude and longitude as an option. Many list companies and service bureaus offer location-based selections using ZIP+4, not the individual address.


As a result, many people with different addresses show up at the same location. ZIP+4 level geocoding is fine when you are mailing to a large area - a 10-mile radius or more - but geocoding every distinct address to the street level enhances your client and prospect lists and improves your mailing accuracy.


1. Mailing accuracy = lower mailing costs. If clients do not need to mail to an entire ZIP code, then they should not. Say your banking client wanted to target everyone within five miles of each of its 100 branch locations. Many list providers would say, "Just mail the whole ZIP code," thinking they should rent as many names as possible. But that would be doing the client a disservice. Using entire ZIP codes is too coarse and could include people more than 10 miles away. This increases your clients' mailing costs.


It would be better to select only people within your clients' market area, regardless of which ZIP code they are in. This can be done only with location-based technologies like mapping. For a saturation mailing, reducing mailing costs by even 10 percent can mean huge savings. Even if you charge your clients for the better targeting, they will still save a bundle and keep coming back to you because of the value you provide.


2. Improve response rates. ZIP code selects include some of the wrong people and miss legitimate targets. Imagine a dry cleaner that is near the border of two ZIP codes. Pulling lists only from the "included" ZIP code misses many high-quality prospects just across the border and reduces response rates because individuals at the far end of the "included" ZIP code probably are not good targets anyway. By using the geocode, your clients' response rates will increase. Use street-level geocodes when the desired mailing distance is 10 miles or less.


3. Prepare your data for mapping. Once geocodes are in your database, mapping software or mapping service bureaus can easily map out your clients' markets. Instead of looking at a relational database, your clients can look at intuitive pictures (maps) of their customers and prospects to help them direct their marketing efforts. Once they know you can provide location-based services, they will come to you for mapping services instead of going to a competitor.


4. More detailed analysis. Geocodes also let you or your clients do an additional layer of analysis. Distinguishing local pockets of premium customers from deadbeat customers can help them focus on the right neighborhoods or even street segments for the most profitable future customers. Sometimes, the ZIP+4 geocode can suffice, but if everyone with the same ZIP+4 gets the same latitude and longitude, it will be impossible to establish trends on a micro-market level. It is usually best to use street-level geocoding when a more detailed analysis is desired.


5. Beat your competition. If you are a list manager shopping your list, you have to compete for the brokers' attention. By adding the latitude and longitude of each street address to your records, you will empower customers to do all the above. Add value to rise above your competition. If you are a list broker, you have competition, too. By offering clients location-based services, mapping and targeting, you distinguish yourself and give clients another reason to work with you.


6. Increase revenues. By providing all of the above value-add services, your revenue will increase. This goes beyond just another fee for geocodes. It changes how your clients and future prospects see your organization. When the market views you as a reliable source for many value-added services, your revenue and profit will increase.


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