Why Geocoding is so Important for Your Business

Geocoding  with address4.com is a process that enables the assignment of geographic information to an address or a known location. Geographical information is often geographical coordinates, but also socio-demographic data, statistical data on the environment and weather, as well as any other form of data with a spatial reference. One application scenario that has become indispensable in everyday life is navigation systems. They determine the corresponding geographical position to a destination address and then calculate a route – based on the current location and information about the course of the road and the current traffic situation.

What are the ways in which companies use geocoding for their business processes?

Geomarketing represents the classic field of application for geocoding. Using statistical data on social background and purchasing patterns, campaigns can select target groups according to geographical criteria or classify and differentiate interested parties at an early stage. As part of an increasingly personalised approach to interested parties, the segmentations that traditional geomarketing allows are too coarse on their own in many cases. 

Within the framework of a regional sales structure, the automatic assignment of an interested party to the responsible sales agent can be carried out according to different criteria. In the simplest case, spatial proximity can be used as a characteristic. In this case, based on the geographical position of the sales agents’ locations and the geocoded address of the interested party, the sales agent with the smallest distance to the interested party is selected. Alternatively, geographically defined sales territories (e.g. in the form of shapefiles) can be used. They can be optimised based on criteria such as accessibility and sales potential. Using a shapefile geocoding, the prospective customer is then assigned to the corresponding sales area based on his geocoded address. The same procedures are also applicable when assigning a prospect who registers in an online portal to a sales branch.

At first glance, route planning for delivery services appears to be a navigation system, but on closer inspection it turns out to be much more complex. Here, not only a route between a starting point and a destination must be determined, but a route that optimally connects a series of predefined approach points. Additional geocoding information can be used to further optimise route planning. For example, taking into account the information whether a building is used for business or private purposes in the route planning can help to increase the probability of a delivery being made.

How to make Geocoding in an efficient way?

It sounds easy to assign a coordinate to an address, but it is not. First of all, reference data are needed that contain the required information for each address, for example a geographical coordinate. This type of data is available from a variety of sources, but varies greatly in completeness, correctness, accuracy and timeliness.

The currency of reference data describes how quickly changes in the real world find their way into the reference data. Completeness and correctness always apply to a specific point in time. As new streets and buildings are created, the completeness of reference data continues to decrease if the corresponding information is not repeatedly researched and supplemented. Renaming of streets and incorporations mean that once correct address information in the reference data does not automatically remain correct in the long term. Amendments must be regularly recorded and the corresponding data updated.