Last year one of my Marketing students approached me for advice about a new business opportunity that she was considering. She had noticed frozen yogurt franchises popping up in her town and wanted to understand if this was a good business for her to get into. I told her that it depended on a number of factors, and that she should do some fact finding before proceeding to invest her time and money.
I asked if she had the skills to create, run and market a food based business and, if not, did she plan to develop these skills or hire someone who possessed them? I explained that most new business ventures failed and that she needed to gather intelligence about the market before making the decision to invest.
Among the questions I posed were: what were the demographics of the town she was considering renting space in, did it have the typical customers for frozen yogurt, was the local economy healthy, what was the direct competition (other frozen yogurt places) or in-direct competition (dessert places), and was there a location with the right foot traffic that would be perfect for this business?
Judging from the look on her face, I suspect she never addressed the issues I raised. While I posed the right questions, I provided no advice on what tools she could use to gather the necessary data or if she did obtain such data, on how to make the right business decisions.
Today, I would have presented a more complete solution. I would have asked the same questions, but I would have recommended location intelligence software to help guide her. At that time, I understood that location based data was used by mobile marketers to target customers with offers that were relevant and geographically close by. While I was an experienced social media marketer, I simply did not understand the full potential of how “big data” could be used to take full advantage of all the location based information that was available.
I now know that there are location intelligence programs that combine different data streams and analytics to help guide the placement of business locations. These programs analyze factors such as traffic flow as well as direct and indirect competition. They then synthesize the data and provide visual recommendations or heat maps that show the best choices. Using these tools, my student would have been able to determine if placing a frozen yogurt business near a school, gym, or movie theater would make better sense, what streets would work better than others, and whether her town or another one might be best suited for such a business.
Location intelligence, like business intelligence, supports analyses and decision making. But it also incorporates geographic information systems (GIS) that create maps that show the relationship of objects in space and perform spatial calculations. It can answer questions such as: how many high income customers are located within a 10 walk of a given store location?
Location intelligence takes business intelligence to another level by infusing reports and dashboards with better visualization and analytical capabilities. It also delivers on the promise of social business by using a wide variety of data and insights to inform decisions. Apparently, in business, as in real estate, location still is everything. And, clearly, using location intelligence can give one a competitive advantage. If only I had known this last year!
