You are a gourmet chocolatier. You open Google Analytics, access Map Overlay report and segment by Transactions. On the screen appears a heat-map of purchase data. States that are dark green have had heavy transactions and light green states have slow activity. You can see Michigan is a strong base, Texas and California are fairly good but Utah and Indiana are poor.
Next you open your sales data and notice something interesting– when a new order happens in a city it often leads to more local customer orders. This tells me word-of-mouth is spreading locally.
In the book Tipping Point author Malcolm Gladwell describes how phenomena grow slowly for a while and then explode. The number of orders we’ve had in Michigan suggests we might have reached a tipping point there, but it’s clear we have ways to go in Utah.
Our chocolatier has a limited marketing budget and we want to get the most bang for the buck. The company is willing to give a generous 50% discount for 1,000 new visitors. We know Michigan has crossed inflection point so no need to give additional discounts here but I’d be willing to entice a visitor from Utah with a 50% discount. Thanks for Geo IP we can target in this manner.
Have you heard of RipStiks?
For teenagers in my neighborhood this the rage. I’ve probably seen 15 kids play around in them. My hunch is this is a social phenomenon. At some point four kids in the neighborhood got the board and then everyone had to have it. The houses in my neighborhood fall within one zip code. For the marketing manager at RipStik this is a gold mine. She has access to the sales data and can sort that entire database by zip code. Using this data along with available school district/income/family demographic data she can identify zip codes where they’ve sold less than three units. That list of zip codes is where we need to offer visitors discounts using Geo IP. Once we reach four orders from a zip code discount is turned off for that zip code. The idea is to only offer the discount till we reach inflection point.
Related article: Illinois Residents Pay No Sales Tax
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This is just one of many examples (some obvious, and some not-so-obvious) of how we use buyer psychology to take visitors to your site from "I'm interested" to "That's it, I'm pulling the trigger". We use established principles of behavioral economics to influence. Marketers try and get results by dialing up the marketing volume. We show you how to zig when everyone is zagging.