The foundation of any great real estate site forecasting model is a precise definition of your core customer, which encompasses 3 key aspects:
- Who your best customers are
- Where your best potential customers can be found
- The value potential that customer has to you – either in terms of dollars or visits
A Real Estate Model is Like a Crystal Ball
Typically, the real estate model is used to understand the sales potential of a new store or restaurant – determining if it’s a good investment or a bad one – and to optimize the unit network by infilling 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 can also be used to measure the performance of existing locations.
Assessing existing location performance can identify which units are not meeting their potential and then determine the sales gap between actual performance and ultimate potential.
By further evaluating the locations with weaker sales, you can determine which units have no upside and which ones are merely underperforming.
The locations with no upside have a low probability of improving sales due to a limited number of customers in the trade area, high cannibalization and/or high competition. On the other hand, underperforming locations have all the market characteristics for much higher sales.
This insight allows you to immediately reprioritize resources for management, remodels and marketing from the locations with no upside to the ones that are underperforming.
The Marketing Team’s Measurable Call-to-Action
Insights from a real estate model on who core customers are, where potential core customers are located within an underperforming store’s trade area and the potential value of each of those core customers makes it possible to develop a measurable marketing campaign.
Targeting the best prospective core customers within each underperforming location’s trade area establishes clear marketing goals that can be measured by redemption/customer acquisition and unit sales improvements.
If you’re interested in learning more about how your marketing and real estate team can leverage insights from customer analytic solutions, let’s talk.