Merchants are typically aware of the states or countries where their customers reside. But merchants don’t often consider adding those geographic variables to their marketing campaigns.
The location of buyers is usually available in the “Ship to” field in the ecommerce checkout process. It’s also in Google Analytics with Enhanced Ecommerce enabled.
There are multiple ways to evaluate performance by location. It could be based on sales, the number of transactions, or profitability, as examples.
Nonetheless, 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 impact performance by region. In this post, I’ll address six of them.
6 Ways Geography Impacts Conversions
Marketing costs. States or countries have differing marketing costs. Reaching a consumer from a Google Ads campaign in, say, New York could be more expensive than one in Oklahoma. Knowing the total sales and marketing cost from each state, one could calculate the relative cost per conversion and thus profitability. It could be, for example, that New York drove more transactions, but Oklahoma produced more overall profit.
Products. Consumer preference varies by geography. You may discover that certain products or product types appeal to specific regions. For example, I once analyzed sales from a building materials company. We discovered a big difference in color preference between New York and California residents. Review sales by product attribute such as color, materials, and environmental impact, and then target regional marketing efforts accordingly.
Seasonality and weather. The weather affects sales. There is little point in marketing snowshoes in January to consumers in Florida. But offering rain boots to Florida residents — preferably when it’s raining — could work well. Aligning products with real-time weather conditions can take time to set up. But I’ve seen good results from merchants that have done it. Some have even automated the process.
Population. Heavily populated states such as Texas or California could generate more sales due solely to the number of consumers. Consider calculating the relative popularity of your products by dividing the number of customers in a state by its total population. That could provide additional insights as to increasing marketing spend, or not.
Household income. The lifetime value of consumers likely depends, in part, on their household income. Reviewing the average household income by state could influence your decision on marketing spend, depending on your products.
Other demographics. Age and gender distribution, ethnicity, unemployment rates, and even crime rates can help understand purchase decisions and, hence, affect your marketing budgets.
