The foundation of any great real estate site forecasting model is a precise definition of the core customer, which should encompass 3 key objectives:
- Who your best customers are
- Where your best potential customers can be found
- The value potential that customers have to you - either in terms of dollars or visits
A Real Estate Model is Like a Crystal Ball
Typically the real estate model is applied to understand the sales potential of a new store, if it’s a good investment or a bad one, and to optimize the store network with infill locations across a market, region or the U.S. and Canada.
Simply put, a real estate model is designed to quantify the sales potential for a given piece of real estate.
But it Also Quantifies Sales Gaps
A great real estate predictive model will also be used to measure the performance of existing individual stores.
The assessment of existing store performance can identify which stores are not meeting their potential and then determine the sales gap between actual performance and the ultimate potential those stores have in terms of dollars.
After further evaluation of the stores with weaker sales, it can be concluded which stores have no upside and which ones are merely underperforming.
The stores with no upside have a low probability for improving store sales due to limited number of customers in the trade area, high cannibalization and/or high competition. Whereas underperforming stores with untapped potential have all the market characteristics for much higher sales.
It then becomes possible to immediately reprioritize resources such as management, remodels and marketing from the stores with no upside to the ones that are underperforming.
The Marketing Team’s Measurable Call to Action
Deriving the knowledge from the real estate model of who the core customers are, where potential core customers are within an underperforming store's trade area and the potential value of each of those core customers, it’s possible to develop a completely measurable marketing campaign.
The approach of targeting the best prospect core customers within each underperforming stores' trade area establishes clear marketing goals that can be measured by redemption/customer acquisition and improvements in stores sales.
One more BIG measurement of a campaign
Market share reporting at the store level is another valuable measurement of any successful campaign. See how much of the customer’s wallet you’re capturing at the store level against your competitors. Request more information about how your marketing and real estate team can leverage insights from Buxton, which includes Buxton/Visa market share reports.