Utilicorp's fame delivers its first marketing application
Northern Minnesota-Sales target areas
In general, UED Marketing programs target on new construction, but there is also focus
on residential conversion, targeting rural propane customers and urban electric customers
with high summer cooling bills. Our first pilot was a typical residential conversion
project for gas customers in northern Minnesota.
Marketing staff needed to create and prioritize sales target areas in northern Minnesota.
They obtained an extract of selected towns from the UtiliCorp customer information
system. The extract included customer addresses as well as historic load information.
The plan was to plot customer locations with respect to gas facilities. Noncustomer
addresses could be derived by an address culling process, as FAME includes address
ranges in its landbase. These noncustomers in the service area would be targeted for
residential conversion from propane to UED natural gas services.
The extract was passed to FAME for geocoding of addresses, resulting in individual
customer points with associated database information. Marketing researchers were then
able to use FAME to see noncustomer locations adjacent to our gas mains. The goal of
the northern Minnesota project was to target fully built out older neighborhoods with
many holes (noncustomers). Researchers could use map graphics and generated statistics
to prioritize areas to be worked. This methodology literally replaces the technique of
staff driving around looking for propane tanks in residence yards.
Additional demographic information could then be provided for analysis. Block group
profiles were built using standard attributes such as age, income, presence of children in
the household. Using block group boundaries in FAME, it became possible to perform
spatial analysis on these block group profiles.
The products resulting from the northern Minnesota pilot were: 1) an address/phone list
of potential customers; and 2) results from graphic analysis and query which could be
used to determine future target areas.
This pilot was somewhat unique in business geographics applications in desiring
household level information rather than aggregated data. This desire may be driven by
the availability of a large customer database creating the expectation that a similar level
of detail could be obtained for noncustomers (who are the individuals of interest in this
targeted marketing). More typical demographic applications rely on commercial
products providing annual updates of aggregated census data. There remains a challenge
to obtain household specific information when the households lie outside the enterprise's
information systems. The second pilot, Kansas Public Service, provided one approach to
solving this problem.
Kansas public service --Linking county assessor data
This pilot project was concerned with making a marketing offer to high income
customers in one service area. Various manual approaches had been attempted, including
the always popular technique, driving around looking for big houses, in this case. A
somewhat more automated approach was to target a zip code believed to be high income.
However, the community had only five zip codes, resulting in too large a segment of the
population being represented by the chosen zip code. Could FAME be used to determine
incomes within the chosen zip code?
Fortunately, this service area was one of seven county/municipality entities providing
electronic landbase to FAME. We had an electronic data sharing agreement with the city
based on cost sharing for periodic aerial surveys. This agreement allowed UtiliCorp
access to the county's electronic version of the assessor database, with the understanding
that the database was not to be used to solicit new utility service customers.
The database was provided in a standard format and could be queried and manipulated
using standard query tools. We sorted the database by assessed value, evaluated the
range of property values, culled the list to include single unit urban residential properties,
and finally had a list of properties to geocode using the address field of the database.
Customers were determined by matching latitude/longitude from geocoding results of the
UED customer database to the latitude/longitude from the county database, thus
employing the address parsing capabilities of the geocoder. We retained the property
value information from the link to the county assessor's database, making it possible for
the market researchers to see customer information with property value appended on any
of the properties.
The product resulting from the KPS pilot was a customer list for a targeted marketing
offer. Customer names and addresses were sent out to a commercial service that provides
phone numbers and certified addresses for post office bulk mailing.
The pilot does not provide much in the way of classic spatial analysis. Rather, it
demonstrates the use of linking an AM/FM/GIS system to traditional external databases
with geographic hooks. County assessor and other government databases, when
available, can provide highly specific, current, geographically referenced information.
Government sources are significantly different from commercial demographic data
sources, both in the information provided and in the business arrangements concerning
the data. A geographically large and diverse enterprise may find it overwhelming to
obtain local level data from many sources, but should be aware of the possible benefits to
be obtained from existing or desired data partnerships with governmental agencies.
