By John J. Coffey, C.P.A. and Gene Palm, www.profitres.com, originally published March 2003, ABA Bank Marketing

What is the benefit of mapping your data?

The “natural” format of data within an MCIF is rows and columns.  This is fine if you have a strong financial and database background and don’t need to visualize the data in order to interpret it.  However, most marketers need to visualize data using charts, pictures or maps in order to interpret what the data is saying about their customers and markets.  Mapping your bank’s data provides a powerful weapon in your marketing arsenal because it literally enables you to see what is going on in your markets from a geographic perspective.

By mapping your data, your targeted marketing efforts can go beyond the mailbox and telephone so often used by direct marketers.  Product attributes can be modified to meet the needs of each unique geographic area that your bank serves.  Visually depicting the geographic distribution of your customers, their loans, deposits and profitability in relation to the location of your branches can help your bank increase the effectiveness of their branch personnel.  Sales territories can also be developed based on the propensity of customers to conduct business at a particular branch.  Armed with this information, you can develop truly local marketing strategies.

What kinds of data can be mapped?

Each state, county and census tract in the U.S. has it’s own unique numerical identifier.  This geographic information can be purchased through a demographic data company and added to or “appended” to your MCIF at the household level.

Because your MCIF is able to consolidate loans, deposits and other services at the household level and the geographic data is at the household level, it is possible to combine both sources of data.  For example, you can create a report that illustrates the total loan balances your bank has in a state, in a county or in a single census tract.  It is also possible to illustrate the total loan balances in a particular zip code although the geographic area of a census tract is usually much smaller than a zip code and is better for marketing purposes.  However, this data is still in its “natural” rows and columns format.

Something magical happens when you import this combined geographic and product data (usually in a database format) into mapping software.  The mapping software is capable of segmenting this data in a variety of ways.  For instance, the data can be segmented into “quartiles” (4 equal distributions of data) or it can be segmented into predefined groups.  The mapping software can then assign a wide variety of colors and patterns to each group.  For instance, if a census tract has a high level of loan balances in relation to the other census tracts in a particular region, it can be assigned a dark blue color vs. a light blue color for a census tract that has a low level of loan balances.

It is also possible to design “multivariate maps” that can illustrate more than one variable at a time.  For example, multivariate maps can show the combined appearance of loan balances (illustrated by various shades of blue) as well as the number of households (illustrated by various patterns of heavy and light diagonal lines) broken out by census tract.

By adding census data to the map, you can study the change in the number of households, median household income distributions and even ethnicity over time for each census tract.  This can provide critical information on how your markets have changed over time.

It is even possible to include “drive time” information on your maps to illustrate the drive times from various locations to your branch.  This is critical information to have if you are using maps to help you with branch site analysis.

Maps can even be linked to prospect lists.  Using this feature, a boundary can be drawn in a specific geographic area (e.g., a prospective branch site) and a prospect list can be generated for all the suitable prospects in that area.

Maps are not limited to using just consolidated data within a geographic boundary.  The physical location of each of your customers can be illustrated with a “pin” map.  Using a database of your customers’ addresses, a “geo-coding engine” assigns a latitude and longitude (accurate to within 3 feet) to each address.  The mapping software then uses the latitude and longitude to create the precise locations of your customers.  You can get really creative with pin maps and show where your CEO lives and where all of your most profitable customers in his neighborhood live.  Who knows, this might motivate your CEO to host a barbeque and invite his neighbors over to dinner!

Maps and marketers were made for each other.  Seeing really is believing!

John J. Coffey, C.P.A. and Gene Palm are the principals of Profit Resources, a consulting company that specializes in MCIF technologies.  © Profit Resources, Inc. 2006