ZIP Code Marketing

A growing customer base is the mainstay of any successful business. Small and medium businesses often do not focus on reaching out to new customers in a systematic way, which severely restricts their growth and can even threaten their survival. Small and medium businesses typically rely on organic growth. This involves:

• Attracting more customers
• Getting existing customers to buy more products
• Persuading existing customers to buy more expensive products

Of these, it is critical for small and medium businesses to focus on attracting more customers, since the other two options require diversification. Moreover, attracting more customers grows the customer base. This objective requires a systematic and focused marketing effort to be accomplished. One of the most effective marketing strategies for small and medium businesses is zip code marketing.

Zip Code Marketing: The Beginning

Martin Baier, known as the "Father of Direct Marketing," introduced "ZIP code marketing" as a strategy. This strategy was introduced with the premise that "birds of a feather flock together." Baier developed this concept while working at Old American.

Insurance, a mail-order insurance company. Beginning with a list of ten million people, the company started sending mails and tracking responses by ZIP code. From the responses, the company made note of the lifestyles and psychographic factors. Similar ZIP codes were clustered into larger units.

Zip Code Marketing: A Form of Local Business Marketing

Grouping customers by ZIP code helps to group them by demographic characteristics and buying behavior. This can help small and medium businesses make critical marketing decisions.

Businesses should gather information about their customers at the point of sale (or point where the transaction occurs, such as a retail shop). The customer must be asked his/her zip code. This data can be used for local business marketing.

ZIP code marketing works in the following ways:

• It provides purchasing pattern data
• It helps in determining the location of new business
• Businesses can obtain a consumer's full address and telephone number by correlating his/her ZIP codes with the name on a credit card.
• ZIP codes are also used to identify notorious geographic regions. Such information can help insurance companies, bankers and lenders.

Local Business Marketing Experts

Local Business Experts (LBE) helps small and medium businesses target markets more effectively. Using powerful marketing tools and backed by experience, the local business marketing experts help companies ensure that their revenues and profits are derived from a larger base.