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ROI from your LIS

By [email protected] - 25th June 2015 - 11:40

Location data is the bridge between the physical and digital worlds of commerce, for businesses large and small. Increasingly, smaller businesses are getting in on the act and realising its benefits. Research by Dresner Advisory Services shows that small businesses are most likely to see location intelligence (LI) as very important or critically important to their business planning. Dresner found that user interest in LI features âmostly rose across the boardâ in the past year, with the most important features being map-based visualisation of information, drill-down navigation and maps embedded in dashboards. â©

For all fans of LI, this increase in interest and take-up looks like great news, but thereâs one caveat: any investment in technology needs to achieve a return on investment (ROI) and businesses must be able to identify and show in advance how they plan to achieve this. An investment in LI is no exception, but selling it in to a cash-strapped board can be a challenge. â©

The biggest challengeâ©

So far, so good. â©

But when it comes to quantifying the potential benefits and forecasting a ROI for LI, things can get a little hazy. And if they canât forecast an ROI, the reputation and future of LIS is at risk. â©

Set success measuresâ©

Here are few methods our clients use: â©

  • Organisations can calculate the cost savings from shifting customer interactions away from call centres to online channels: âWhereâs my nearestâ¦?ââ©
  • Businesses minimise the risk of failed product or service launches, as spatial insights can be integrated into R&D and the cost calculated.â©
  • Businesses can measure the reduced cost of customer retention compared with the cost of customer acquisition: research consistently proves that it costs between four and 10 times more to acquire a new customer than to keep an existing customer, and LI can drive retention when combined with good data quality. â©
  • Improved reporting can create and calculate cost savings by identifying areas of duplication or inefficiencies.â©
  • With insight into risk comes a potential increase in business, which can be quantified in terms of a predicted uplift to the revenue.â©

And in specific sectors:â©

  • Insurance firms can calculate the impact of underwriting policies that cover areas at risk of hazards.â©
  • Retailers will have the insight to identify and potentially close or change underperforming stores, quantifying the savings from rent, staff costs and other overheads.â©
  • Banks and retailers can look at optimum sites for investment and the potential spend or investment per head in a target demographic.â©
  • Retailers can quantify and avoid cannibalisation among stores too close together.â©
  • Utilities can accurately forecast network outages, enabling them to respond quickly, reduce downtime and minimise customer service and engineering costsâ©
  • Public sector organisations can forecast savings from moving citizen resources online and meet digital objectives â©

Engage the businessâ©

  • Engage the entire business: Speak to vendors about training programmes, internal marketing initiatives and other communications programmes designed to promote and inform the business about the value of LI to generate interest and encourage usage.â©
  • Integrate intelligence: Location insights can be fed back into the business and integrated into different areas of the business.â©
  • Consider the changes in business process: Investment in technology requires a change in business processes, and this is the same with LI as it adds another, informed stage.â©
  • Ensure vendor best-practice: Identify the level of engagement and support the vendor will provide throughout the buying cycleâ©
  • Focus on the outcomes: Look at how the vendors can deliver the right set of capabilities.â©

Understanding the positive impact of LI doesnât require the board to take a leap of faith. Location insights unearthed by LIS can be quickly and cleverly transformed into precise, accurate, valuable business intelligence, driving smarter decision making, enhancing the customer experience and ultimately improving business performance. Forecasting the value revealed by these insights and quantifying the risks of not implementing them are two of the most convincing arguments for LI in a strong business case. â©

James Brayshaw is director, LI and GIS, Pitney Bowes (

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