Traders are usually aware of the states or countries where their customers reside. But merchants do not often consider adding the geographical variables to their marketing campaigns.
Buyer's placement is usually available in the "Send To" field of the e-commerce checkout process. Google Analytics also has Enhanced Ecommerce enabled.
There are several ways to evaluate performance by location. It can be based on sales, the number of transactions or profitability as an example.
Knowing that web visitors from Colorado, for example, have a higher conversion rate than those from Florida, merchants can target marketing campaigns to drive more traffic from Colorado and less from Florida.
Many variables can affect performance by region. In this post, I will address six of them.
6 ways of geography affect conversions
Marketing expenses. States or countries have different marketing costs. Reaching a consumer from a Google Ads campaign in, say, New York can be more expensive than one in Oklahoma. By knowing the total sales and marketing costs of each state, one can calculate the relative cost per conversion and thus profitability. For example, it might be that New York ran more transactions, but Oklahoma produced more total profits.
Products. Consumer preferences vary by geography. You may find that certain products or product types appeal to specific regions. For example, I once analyzed the sales from a building materials company. We noticed a big difference in color preference between New York and California residents. Review sales by product attributes such as color, materials and environmental impact and align regional marketing efforts accordingly.
Season and weather. Weather affects sales. There is little sense in marketing snowshoes to consumers in Florida in January. But to offer rain shoes to Florida residents – preferably when it is raining – could work well. Adapting products to real-time weather conditions can take time to install. But I have seen good results from merchants who have done so. Some have even automated the process.
Population. Heavily populated states like Texas or California can generate more sales due to the number of consumers. Consider calculating relative the popularity of your products by dividing the number of customers in a state by its total population. It may provide additional insights on whether or not to increase marketing spend.
Household income. The lifetime value for consumers is probably partly due to their household income. Reviewing the average household income by state can affect your marketing decision, depending on your products.
Other demographics. Age and gender distribution, ethnicity, unemployment and even crime rate can help understand purchasing decisions and thus affect your marketing budgets.