Business Planning with Demographics

Why use demographics in business planning you may ask. But I believe the real question is – why not use them?

All good businesses are built around their customer and using demographics as a business planning tool for any B2C (business to customer) operation puts the potential customer at the heart of the business planning process – whether it is a health club, spa, retail unit, restaurant or any other consumer focussed business. Demographics are simply known details about people. Their age, wealth, lifestyle, mobility, type of dwellings, family units, types of employment, likes and dislikes, favourite activities all provide details that should lie at the heart of the business planning process.

To make the information even more powerful though, demographics can be linked to geography showing where different types of people live. This makes the knowledge so much more powerful. And is enables marketers and business planners to calculate likely spending power and usage levels into a business plan – and provide a useful development audit trail to satisfy questions from funders and investors.

How You Can Profit from Demographics

• Quantify the Market Opportunity - Determine what types of people you want as customers and discover how many there are in your key market area. Then by plotting the location of competitors you can identify the market gap for your service. Adding the quality factor will enable further and more detailed analysis.
• Target Your Customer – So you know the types of people you are looking for. Use geodemographics to locate where they live and see how they can be contacted easily – either using advertising, direct mail, door drops or any other marketing method.
• Monitor Business Activity by Customer Type – By flagging sales by type of customer (which is much easier than it sounds) you can easily see what types of people are the most valuable for your business – whether that value is determined by value of purchase, frequency of purchase or length of time they are in a customer relationship with your business.

• Track Trends – see how the type of customer your business serves changes overtime. Lose your best customers and the impact on your business could be catastrophic. Tracking will keep you in control.

In a recent project we found, by detailed customer analysis, that one long term client who set a clear customer focus at the start of his business developed more profitable trading units as a result when compared to his competitors.

A clear customer focus developed into your business and followed overtime will enable you to share similar benefits. Specific ways to use demographics in developing a health and fitness club are shown here.