In this article, we’ll look at leveraging customers\u2019 location data to increase sales and possibly cut marketing costs (with some tactics you can start applying right away).<\/p>\n\n\n\n
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Here\u2019s what you\u2019ll learn about:<\/b><\/h2><\/p>\n\t
1. What is business location applied to e-commerce and online businesses?<\/a><\/p>\n\t 2. Why is customers\u2019 location data essential for choosing the right business location?<\/a><\/p>\n\t 3. How to learn the locations your customers come from?<\/a><\/p>\n\t 4. How to define the best locations for your sales and marketing efforts?<\/a><\/p>\n\t 5. How to leverage customer location data for marketing?<\/a><\/p>\n\n\n\n <\/p>\n\n\n <\/p>\n\n\n\n We\u2019ll start with defining business location and how its meaning differs for brick-and-mortar and online businesses.<\/p>\n\n\n\n In its classical meaning, business location denotes the physical place where a business is represented. It can be a store or a booth in a shopping mall, an office \u2013 any place where a business meets customers to showcase and sell its products or services.<\/p>\n\n\n\n For an offline business, choosing the right location plays a tremendously significant role and directly affects sales. For example, a store in the middle of nowhere, or at some distant place inconvenient to drive or walk to, is likely to be much less profitable than a boutique in the main gallery of a popular shopping center. At the same time, a shop in a suburban neighborhood, where no one else is offering such goods or providing this kind of services, might be a much better choice than a city center heavily populated with competitors. While the example is oversimplified, and more factors affect profitability, you can see the general point.<\/p>\n\n\n\n At first glance, the term \u2018business location\u2019 can’t apply to online businesses. There’s no physical sales point \u2013 people can potentially buy from you from wherever they are. But even then, location matters. If we take the point of contact between businesses and customers as a business location (in this case, a customer’s laptop or a smartphone), it all falls into place. And this way, the location of the customers who purchased goods or services can be considered the very business locatio<\/em>n that can affect sales if approached right. Perhaps the influence is indirect, but you can’t discount it. <\/p>\n\n\n\n Let’s break down how<\/em> the customers\u2019 location impacts sales.<\/p>\n\n\n\n Back in 2013, research by David R. Bell and Jae Young Lee \u2013 Neighborhood Social Capital and Social Learning for Experience Attributes of Products<\/a> \u2013 outlined how customers’ offline behavior, including their location, surprisingly affected online purchasing. For online sellers, it signaled how important customers\u2019 location is in driving sales. <\/p>\n\n\n\n There, they spoke about the notion of \u2018neighborhood social capital\u2019, in other words, the extent to which people in a certain neighborhood tended to trust each other during offline interaction and communication. They also used the term \u2018social learning\u2019, meaning the transfer of information about some product attributes that couldn’t be acknowledged before the purchase from existing customers to potential customers.<\/p>\n\n\n\n Online businesses, including e-commerce, can have two important takeaways from this research and leverage them to make their marketing activities more efficient, less costly, and more sales-driving. <\/p>\n\n\n\n The first is that understanding the context behind your customers\u2019 location and its influence on their online behavior can be a game-changer in finding out why you have customers in one location and no customers in another.<\/p>\n\n\n\n The second is that existing customers can often be a powerful source of new customers for an online business.<\/p>\n\n\n\n With these in mind, for an e-commerce business, customers\u2019 location data can help decide which customers\u2019 locations can be their perfect business location<\/em>. This way, they might want to focus on promoting their products or services more for the customers they already have in those locations and acquiring more new customers in those areas. Simply put, if you have customers who already bought from you in a certain location or area, targeting more customers in this area might likely convert into more sales.<\/p>\n\n\n\n This brings us to how you can find your customers’ location and leverage it. <\/p>\n\n\n\n We\u2019ve already mentioned that businesses might already have all the necessary data at hand. Let\u2019s look at the possible customer data sources they can use to retrieve customers\u2019 locations.<\/p>\n\n\n\n You can find solutions on the market that provide an account of e-commerce or online business analytics, similar to how Xero alternatives<\/a> offer comprehensive financial management features. The advantage of such solutions is that they can help analyze the performance of your business across multiple sales channels. They usually put together detailed data on sales, products, and customers from the e-commerce and payment platforms that a business is using. These accounts can include the data on where the customers come from, what they buy, how often they return, how much they spend, which products are more\/less profitable, and more.<\/p>\n\n\n\n There\u2019s probably no online or e-commerce business that isn\u2019t using Google Analytics to track their web store\u2019s performance. If set up correctly, this tool can be an invaluable source of information on customer behavior patterns a business can use to tweak their tactics and strategies for better performance: from SEO to conversions and customer acquisition.<\/p>\n\n\n\n All the popular and most frequently used e-commerce platforms<\/a> and payment processing services, such as a Square business account<\/a>, usually collect data on your sales and other transactions (refunds, fees, etc.), including customer data, such as shipping addresses or customer addresses used for invoices. Such services usually come with user dashboards where you can find information about your customers\u2019 whereabouts.<\/p>\n\n\n\n While smaller businesses might not use them, medium- and large-sized businesses are likely to use customer relationship management (CRM) systems to organize and administer the information about their interactions with customers. One of the biggest virtues of CRMs is that they organize data the way you can see all the purchases and transactions related to each customer, filter or sort the data by certain attributes, including location, etc.<\/p>\n\n\n\n Many accounting platforms, especially those designed for accounting software for medium-sized business<\/a>, allow for adding customer data to transactions, including information about customers\u2019 locations. Usually, this data is used to create and send invoices. You can retrieve this data for analysis and use it to help choose the location for your e-commerce business. You might need to use some third-party solution to import customer data to your accounting platform because adding it manually might be tiresome.<\/p>\n\n\n\n Start with analyzing sales and customer data you already possess. It can help you see current locations where your business seems to be most profitable.<\/p>\n\n\n\n For better results, you might want to see customers\u2019 locations against other important sales metrics, such as the average order value or the number of sales coming from a given location. At this point, having all the necessary data gathered in a single place, or dashboard where you can easily switch from report to report, makes the analysis more simple.<\/p>\n\n\n\n Here\u2019s an example of what it can possibly look like if you\u2019re using an e-commerce analytics platform like Synder Insights.<\/p>\n\n\n\n <\/p>\n\n\n <\/p>\n\n\n\n You can start with the Total sales report<\/a> for a period you want to analyze – a year, for example. By sorting the results by location, you can already figure out where most of your sales come from.<\/p>\n\n\n\n Additionally, you can break down the results by sales channels. It will be especially beneficial if you sell through multiple channels and want to know where you have more customers, which channel brings you more profit, and thus, decide on each of your channels\u2019 efficiency.<\/p>\n\n\n\n From the Average order value report, <\/a>you can learn how much, on average, people from different locations and channels spend when buying from you. These numbers can display the profitability of your business in general and by each sales channel or location. It\u2019s pretty straightforward: the bigger the number, the more revenue you gain.<\/p>\n\n\n\n Where do your most profitable customers come from? The Top performing customers report can give you the answer. Moreover, you can learn your customers\u2019 behavior patterns, such as whether they buy more often but less expensive products or spend on more expensive items but more rarely. As customer behavior may differ from channel to channel, it might also be a good idea to break those buying patterns by sales channels. Comparing those patterns against customer locations can hint at what marketing tactics to choose to promote your products in different areas.<\/p>\n\n\n\n Look at your Top-performing products \u2013 the products that people most frequently buy from you and bring you the most revenue. Combine it with the products people tend to buy together<\/a>, and you have a ready-made strategy for increasing sales by offering customers products they\u2019re most likely to be interested in.<\/p>\n\n\n\n You can dig even deeper into your customers\u2019 buying habits by looking at the Purchase frequency<\/a> or the Time between purchases<\/a> reports. This way, you\u2019ll be able to predict whether there\u2019s a chance that customers will come back to buy from you and when it\u2019s most likely going to happen.<\/p>\n\n\n\n This is a possible workflow for customer data analysis that might help you define the best location for your sales. Depending on what questions you want to have answered, you can examine various data sets on sales, products, and customers. <\/p>\n\n\n\n![\"Synder](\"https:\/\/synder.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/10\/synder-insights-banner-1024x482.jpg\")
<\/a><\/figure><\/div>\n\n\nWhat is business location applied to e-commerce and online businesses?<\/strong><\/span><\/h2>\n\n\n\n
Why does business location matter for offline businesses?<\/h3>\n\n\n\n
Why does business location matter for online or e-commerce businesses?<\/h3>\n\n\n\n
Why is customers\u2019 location data essential for choosing the right business location?<\/strong><\/span><\/h2>\n\n\n\n
How to learn the locations your customers come from?<\/strong><\/span><\/h2>\n\n\n\n
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How to define the best locations for your sales and marketing efforts?<\/strong><\/span><\/h2>\n\n\n\n
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