David Stirling, President Market Vue Partners
Yes, it is counter-intuitive but it is a fact that has been celebrated for hundreds of years from experts on warfare such as Sun Tzu and Carl von Clausewitz to modern day marketers. Depending on who’s counting, the choice of where to compete can drive from 70% (retail axiom) to 80% (strategy consultants) of revenue growth. Yet, how often do marketers, especially retail marketers, really understand the true potential of each of their markets? Typically, the real estate group inside most retail organizations is the place you look for market potential data. Once a new location is selected, all of the reams of data that were used to justify the decision are put back on the shelf. When the data is looked at again or updated, it is often simply to compare current locations to new locations. This is a shame.
In today’s zero sum world where budgets are hard to justify let alone grow, the only way to get a higher return on marketing investments is to look for new ways to drive performance by matching spending outlays to true market potential. That requires analyzing every market where a firm competes at a granular level and benchmarking its potential against all of its peers.Too often top performing stores or branches are given credit for their results, when it’s the location that’s in the right place at the right time. On the other hand, laggards may actually be doing a good job in a bad spot. With all of the tools now available for analyzing markets, and the rapid decline in costs of these tools, most anyone today can plan their marketing budgets to take full advantage of the enormous disparities in market potential from one location to the next.