Profiting from Postcode

by Lloyd Borrett
Corporate Review, 1993

The postcode has profitable uses for every organisation. This simple piece of information is the key to integrating diverse sets of data about your existing and potential customers.

Postcodes have obvious advantages over other possible keys because they are widely used and understood.

Consider an insurance company as an example of how postcode can be used to increase profits.

The company will have on file the postcode of every, customer. Thus it is easy to determine the sales distribution by postcode of the range of insurance products sold. From there it is easy to spot which products do best in which areas and hence plan a targeted marketing campaign for those products in similar areas.

Result: targeted marketing, more customers, and increased profits.

Alternatively, the insurance company can use the postcode information on customers to design balanced sales territories.

Result: sales efficiencies, and increased profits.

By analysing the postcode information on customers together with competitor locations and key landmarks the insurance company can identify attractive new office locations.

Result: enhanced customer service, improved competitiveness, and increased profits.

The insurance company could also analyse policy claims by postcode. Customers living in areas prone to flooding, fire or crime can easily be identified and policy rates adjusted accordingly.

Result: decreased risk, increased profits.

The concept of using postcodes as the key to unlock increased profits is applicable to most organisations, vet few have done so. Why?

The simple answer is that most organisations don't think spatially. They don't really consider where their customers are located and the impact that has on how their operations need to be structured to provide best for those customers. Even fewer organisations consider how the location of existing customers has implications as to where their potential customers can be found.

A greater problem is that until recently even the organisations that tried to think spatially found many objects in their path. But that is changing rapidly.

Today new tools are becoming available that make it possible for most organisations to make decisions based on spatial analysis of their data in-house, even on the manager's desktop. For those organisations that must seek out external expertise they will now find this much more readily available, with results coming faster and more efficiently.

Soon one of the last barriers to using postcode as the key to integrating diverse geographically related data sets in Australia will be removed. For while the key postcode boundary data set has been available in the USA, United Kingdom, and much of Europe, this has not been so in Australia. In fact, until recently Australia Post's postcode boundaries had never been officially mapped, let alone made available as a digital data set for use in computer systems.

Certainly many organisations had attempted to reap the boundaries and publish the results. A digital data set was even built by selectively combining the smaller 1986 Census collection district boundaries and calling the results a derived postcode boundary data set.

So, any organisation actually wanting to use postcode to unlock profits found no officially-sourced, accurate definition of the postcode boundaries of Australia was available.

In 1991, Australia Post teamed up with the Australian Surveying and Land Information Group (AUSLIG) with a goal to map and digitise the postcode boundaries of Australia and make them available for use by industry, commerce and government.

To cover this vast continent with the high degree of accuracy required, over 2,000 base maps ranging in scale from 1:1,000,000 to 1:10,000 were chosen and distributed to Australia Post's post offices. The postal managers plotted the postcode boundaries onto the maps which were then checked and handed back to AUSLIG to be digitised.

By February 1992 AUSLIG had completed the process of digitising the postcode boundaries from the maps. At all stages of the digitising work an extremely rigourous set of quality control checks were undertaken to ensure the high accuracy standards set had been met or exceeded.

AUSLIG plan to have off-the-shelf, digital versions of Australia Post's postcode boundary set ready for sale through a national network of distributors by November 1992.

During the next few years we will see more and more organisations utilising postcode to integrate their information. Their marketing, operations and executive information systems will all allow postcode to be used as a common key. The results will be mapped using easy-to-use, readily-available, desktop mapping software, and for the first time spatial analysis of information will be simple.

It seems a characteristic of' Australian organisations to sit back and watch before adopting the latest advances from overseas. With postcode, this has enabled Australia Post and AUSLIG to study the overseas examples and produce what is arguably the most accurate and comprehensive postcode boundary data set available in any nation.

Now it is up to Australian industry, commerce and government to recognise the opportunities created by grabbing the key and unlocking the doors to increased profits.

Try it for yourself. Select an immediate and visible decision for which you can easily acquire the necessary data and analyse it by postcode. You will be surprised at the value of the information you unlock. This initial win can then be used to build support within your organisation for using postcode as a key to spatial strategic thinking.