Investing is a risky business, but also one of the most lucrative there is. That feeling of being a part of the growth of a company is exhilarating, but before investors invest, it’s always wise to get an ROI analysis done. This means getting a full view of your potential investment to understand the risk associated with investing in a product or service.
Location intelligence is a great way for investors to get a 360-degree view of what they are putting their money and faith into. Here are our top three reasons why companies should consider location intelligence as a crucial part of their ROI analysis strategy.
When someone mentions foot traffic or footfall, a lot of investors might automatically think of physical customer count in a brick-and-mortar location. High-quality location intelligence takes this a step further. A lot can be determined by a potential investment’s customer base and how they move around in the world like:
- Customer sentiment: What stores are customers visiting regularly? Did foot traffic decline after a certain launch or ad campaign? What is your investment doing to keep their customers engaged?
- Marketing effectiveness: How effective are their marketing efforts at bringing in new customers? Is their target audience responding well, and if not, what is the company doing to improve that?
- Overall customer experience: If an investment’s customer base is not happy with their CX from a brand, they will go elsewhere which means that your investment will be at risk. Are they listening to their customers and what they want? Are their customers choosing a competitor over them?
Location intelligence takes ROI analysis a step further by giving you a full view of how a company is protecting its own investment: its customers. Without them, there wouldn’t be a company to invest in at all!
Location intelligence can show you more than just foot traffic and customer sentiment. It can also help you determine whether or not a potential investment is in the optimal location for ROI before you invest.
Let’s look at this from a closer perspective: You are looking to invest in a new smartwatch brand with what looks like a popular storefront. The foot traffic in and out of the store is what drew you to them in the first place as a potential candidate for your portfolio. If you had based your ROI analysis solely on the seeming business of this storefront location, pouring money into their business would have been a no-brainer.
However, using your location intelligence solution, you realize that their primary audience is college students who are going into the location but not actually buying anything. Rent in this particular part of town is 15% higher than the more suburban areas because of the university campus across the street. Not only this, but the price points of the smartwatches are at about $500 and up; not something a young person on a college budget would easily be able to afford.
This is this brand’s only storefront, and after further digging, you determine that the owners didn’t do enough research when scouting the location of their shop, and instead of opting for a more suburban part of town with a higher income, they went for the busy storefront with no conversions.
Based on this data from your ROI analysis, would you invest in them?
Maybe you don’t have a particular company that you want to invest in right at this moment but are interested in putting some feelers out there anyway. Location intelligence can help you predict what the next big thing will be for your chosen vertical. Because it uses privacy-friendly mobile location data, location intelligence can show you where people are going and what they’re most interested in.
The results of this may surprise you! Who would have thought that home buying would have taken off last year? What about the sudden surge in DIY projects? And the at-home cooking craze that swept the nation? These are all things that, had investors caught wind of these random trends, they could have acted on them and made a profit.
Location intelligence for ROI analysis might sound over the top to some, but there’s no denying the benefits of using real-world data for investors. If you would like to learn more about what location intelligence can do for you, contact us to speak with an expert today.