Want to Grow Your Business? Think Demographics
Do you know where to hunt for attractive customers? There may be a wealth of information you can gain about your existing customers that can help you in the hunt for new ones.
We have often talked in this column about the importance of understanding your customers. This is never more true than when you are looking for growth opportunities. Your customers possess certain demographic characteristics that can often guide your search for growth.
So where do you find this information? There are a great many sources of U.S. demographic data, both paid and free. They include:
- Government sources such as Census, Bureau of Labor Statistics, Social Security Administration, Immigration and Naturalization Service, Center for Disease Control
Using such data helped us investigate growth opportunities in ethnic communities for one of our clients, a consumer packaged goods company. We were able to directly compare internal sales data at individual retail outlets with the demographics in the surrounding ZIP codes. From this analysis we identified the brands that were highly consumed by various ethnic communities.
As a result, we were able to recommend that our client move from a single goal merchandise mix for, e.g., supermarkets, to multiple mix alternatives based on the demographics of the community surrounding the supermarket. As a result, the client was better able to provide the mix of products its customers wanted. In essence, we were able to identify the ethnicity contribution to consumption patterns that were playing out in their retail outlets.
In other cases, other demographic dimensions such as age, income or wealth may also be important sales drivers. You can understand all of those dimensions at the U.S. ZIP code level. If using this data can better help you understand why your sales patterns play out the way they do, you can better drive sales growth with attractive new customers.
We encourage you to share your thoughts and experiences with us. Send us an email at email@example.com.
KARL STARK AND BILL STEWART | Columnist | Co-founders, Avondale
Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree.