September 25, 2025
Grow smarter by knowing where your customers are and what they’re worth to you.
Accessing detailed information on your potential customers for specific geographic areas is becoming ever cheaper and more accessible. But the fundamental problem is still the same, “now that I have the data, what do I actually do with it?!”.
We’re going to break down the wall between data and your growth team, who need a practical guide to profitably reach new customers. In more technical terms, we’ll give you a method to add to your SOM (Serviceable Obtainable Market) calculations, but at a granular level of detail and geography for a super refined bottom-up approach 👌
Most growth challenges revolve around solving this problem;
“Do I have enough potential customers there, and how much can I spend trying to reach them?”
The options for growth are situational to each business, but it often falls into things like:
- How much can I spend on advertising?
- Do I need to put a salesperson in the area?
- Will a new location or store be profitable there?
- Is it worth setting up a new warehouse?
- Is there enough work to keep a service technician busy for the day?
- Could I set up a franchise territory?
The following process is going to give you a repeatable strategy to begin answering any of these questions.
You’ll need to find information on your target audience and attribute that to a suitable geography. This gives you the ability to carry out low level analysis. There’s a wealth of detailed information on the population, household and firmographic composition of low-level geography like Postal or Zip Codes. For example, this information could be how many children in a particular age group there are. Or, it could be a number of businesses in different market sectors. This is going to give you an estimate of how many potential customers you have at a low level.
The best starting point is to think about the core characteristics of your customer base before trying to get too complicated.
This is a key step, especially if you already have some trading data to analyse. In step 1 you’ve gathered information on how many potential customers there are. Now, you need to estimate how many of those you will realistically service.
A great starting point is to look at your existing operations and draw conclusions from there. Plot your customer locations and count how many you have within each of your selected geography e.g. Postal Codes or Zip Codes. From here, you can calculate the percentage of your market you are reaching. For example, there might be 1,000 people in an area, and you have 30 customers, so you are servicing 3% of the population.
Beyond looking at the micro level, try combining these smaller geographies together into an “analysis area”. Look at where most of your customers are located and create your analysis area around these. It will give you the total stats on the local market you are operating in and how much of this you are capturing.
From there, look at how much revenue you generate in the area and see if that matches your expectations. You should also look at the average annual customer value (ACV). For assessing future areas, take your expected (and now proved!) market penetration, multiply that by the number of potential customers and then multiply again by your ACV. This will give you an estimated revenue potential.
Now you’re ready to assess the area you want to grow in. It might be for a new store, territory, venue, or marketing analysis. Add the low-level geography together to build an ideal view of the area, and your revenue model will give you an estimate of the revenue potential. You want this to be high enough for you to make a return on whatever activity you need to carry out. If it’s not, have a think about what you need to do to make this happen.
The final step is once you’ve moved into a new area or started new marketing activity, track how many enquiries and customers you have in the area. You can compare this to your revenue model and keep on top of progress!
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