The current economic situation emphasizes how important it is to focus on sustainability. How can companies do this and how quickly will it lead to improvement?

Prior to the 2008 financial crisis, "sustainability" was often dismissed as a trendy term used by well-intentioned individuals with little knowledge of the intricacies of economics. However, the current crisis has affected more or less all aspects of the globally interconnected economy. The parallels to global climate change are obvious and have led to a growing acceptance in the business world of a concept that emerged from the realm of ecology.The idea behind the term "sustainability" – that behavior and decisions should emphasize long-term gains rather than the short-term "plundering" of resources – clearly has relevance to the economic world. The crisis has underscored the advantages of planning with an eye to the future rather than focusing purely on short-term profits that eventually lead to periods of acute crisis.

Is real estate to blame?

It's no coincidence that the real estate investment crisis impacted the entire economy - the former is deeply interwoven with the latter. For example, many large companies from all branches were involved in speculative (real estate) investments or carried stock portfolios that included real estate objects. Also, every company with its own or rented retail space or production sites was impacted by the plunge in real estate values. The treatment of real estate objects as commodities – as was done by many banks and investors – is just as problematic as these locations' actual suitability. The reason the banking crisis affected the entire economy so quickly and severely is that too few companies evaluated the actual suitability and soundness of their real estate and branch locations.For example, much of the damaging impact to the retail sector could have been avoided if companies had focused more seriously on the suitability and long-term potential of their real estate and branch locations. Many companies and branches consequently entered a dangerous downward spiral marked by dwindling customers, diminished turnover, reduced budgets and the resulting bottlenecks in production and revenue.

Achieving sustainability through geomarketing

In short, the crisis accentuated the hitherto lack of sustainable planning. Today there's a better understanding that the companies who survive are those whose planning extends beyond the next financial quarter and that take into account the current market trends and their effects on potential. "Sustainability" is ultimately a goal, not an actual method. Geomarketing tools and knowledge are the instruments with which this concept can be actualized and made concrete. Using a geomarketing approach – i.e., evaluating markets, real estate and turnover from a geographic perspective – companies can gain comprehensive, objective and up-to-date knowledge of their markets and the numerous ways in which they are interconnected.

The "place question" plays a decisive role in the success of all aspects of a business: The proximity of customers to sales locations and within sales territories, accessibility of production sites and degree of market coverage and penetration are all elemental factors that must be taken into account. All company areas, from sales and marketing to logistics and expansion planning – must work together to locate and exploit market potential in the most efficient manner possible.

Intimate knowledge of the market gained through geomarketing is even more important when it comes to preliminary company-wide decisions involving strategy. Geomarketing doesn't just increase efficiency – it also improves effectiveness, illuminating the concrete steps that need to be taken to move a company toward greater prosperity. Geomarketing makes it possible to keep a close eye on the current state of the market as well as real estate and business locations, giving companies the ability to keep track of important changes and developments. Knowledge obtained through geomarketing serves as the basis for sustainable development and the strategic development of markets, both domestically and abroad. Company-wide geomarketing is thus the key to stability and sustainability in this dynamic and intricately interconnected global economy.

How quickly will a focus on sustainability lead to improvement?

The previously described constellation of events that led to the current economic crisis could have been prevent-ed through greater transparency and scrutiny of actual market conditions. Many companies are now faced with acute problems that must be solved before the above-described planning strategies can be fully embraced and implemented.

There's some good news for companies in this predicament. First, geomarketing can also help with these acute crisis situations. Secondly, the knowledge needed to move forward is already present – it simply has to be applied. For example, GfK market data on potential can be immediately implemented, allowing for the optimization of marketing campaigns to concentrate on promising regions. Sales can also immediately focus on new regions and customers with a high level of potential rather than proceeding haphazardly in the absence of concrete data. Geomarketing can also save money within just weeks by optimizing sales territories in a way that equally balances resources and potential. It's best to adapt the overall company strategy to the prevailing market conditions as soon as possible in order to avoid wasting further funds on misguided projects that are unlikely to produce positive results. Other important actions include adjusting expansion strategies for existing and new locations on the basis of this new knowledge, evaluating locations and real estate with regard to sustain-ability and temporarily closing badly performing branch locations.

Sustainability-oriented planning can be embraced right away, leading to some quick initial successes. How-ever, the implementation of this strategy is an ongoing challenge because of ever-changing market conditions. Here, a geomarketing approach is crucial, because it keeps companies in touch with their evolving markets and projects.

Building trust through transparency

By drawing on geomarketing tools and expertise, companies from all branches can avoid overlooking important information and trends, while simultaneously taking advantage of current and long-term opportunities for growth. Geomarketing thus offers companies a growth-oriented paradigm that promotes sustain-ability in all business areas and lays the groundwork for long-term prosperity.

An additional factor of vital importance to economic success is trust. This quality is an essential precondition for cash flow. The transparency that geomarketing makes possible promotes the renewal and sustain-able growth of trust between market participants, fostering conditions that guard against economic downturn and instability.

Crisis accelerators in retail

• Outdated sales territory structures in which resources and potential are unevenly distributed
• Marketing campaigns that are not target-group driven: Reduced budgets lead to turnover stagnation
• Lack of clarity regarding regional market share:  This makes it impossible to accurately evaluate success
• Expansion planning without knowledge of the on-site conditions or regional market potential
• Branch networks that have not been regularly evaluated or that aren't oriented to the existing market potential
• Absence of a unified sales reporting system, or no clear, transparent results from controlling
• Real estate investments that haven't been evaluated by an expert for risks and development potential
• Retail objects in locations with overvalued rents  and/or too few customer visits

If one of these crisis accelerators applies to your company, you should quickly implement countermeasures. A geomarketing approach increases effectiveness, transparency and efficiency.

This is what we can do for you:

A geomarketing approach is especially indispensible when it comes to retail because it allows you to continually assess how well you are maximizing potential.In difficult financial times, even a small increase in turn-over can mean the difference between surviving and perishing. We recommend an holistic geomarketing approach that encompasses consultancy, comprehensive GfK market data on regional potential, geomarketing software and up-to-date maps that allow for precise worldwide planning.

Geomarketing not only improves efficiency, but also effectiveness thanks to the sound advice of our experts who can advise you on the best course of action during times of crisis. Our experienced consultants assist you in making well-informed decisions that directly impact the health of your company, such as choosing new locations, optimizing sales networks and planning expansions.
We also help companies in the finance branch re-assess supposedly lost investments and secure immediate cash flows.

www.gfk-geomarketing.com