Customer Data Analysis Provides Site Selection Insights

Site Selection Through Data Analysis - Trade Areas were defined for each existing location

The day-to-day work of running a successful restaurant chain leaves little time for “big picture” thinking. While the success of a restaurant will surely rise and fall with the quality of food and service, there are many other factors that can contribute to a well-run chain’s success or failure. This was the situation that the owner of a small Nashville-based restaurant chain found himself in when he reached out to New Perspective. While his five locations were doing well, he didn’t feel he knew enough about the customers and trade areas of each location to replicate the success in new markets. When he was ready to select a new site for expansion, he wanted to incorporate our data analysis into the process.

The chain had limited customer data that had been collected from a handful of sources. This information was useful for profiling, but not comprehensive enough to be the exclusive data source for the analysis. However, it did provide an excellent basis for trade area creation. Working with the owners and managers, trade areas around each location were defined based on their knowledge of the customer base and the locations of the customers included in the data. The trade areas were then analyzed across numerous demographic and lifestyle categories and indexed against the greater market to identify unique characteristics of the households within each trade area.

The analysis revealed some interesting insights. Each trade area encompassed a large number of employees at work, reinforcing the client’s belief that business lunch was an important factor in their success. Looking at the trade area households collectively, they varied from the overall market in a number of important ways, including:

  • More educated
  • Higher home values & newer homes
  • Significantly higher incomes
Site Selection Through Data Analysis - Every market intersection was scored according to analysis findings.

While generally similar in many ways, the demographics of each location were weighted against sales to help explain some disparities in the performance of specific locations, especially when examining lunch/dinner and weekday/weekend performance. After some additional analysis and client feedback, New Perspective was able to build a predictive model which scored prospective locations based on their similarity to the client’s “best” customers.

Site Selection Through Data Analysis - Eventually, every intersection in the state was analysis using the findings

Of course, customer and trade area profiling are useful, but translating these findings into actionable results is the goal of every New Perspective analysis. To that end, each major intersection in the client’s target market was analyzed and fed into the model. These intersections were then mapped and color-coded according to their model scores.

The client was so pleased with the results of this analysis, they eventually requested that all major intersections within the entire state be fed into the model and scored. These results were an invaluable resource in their site selection process and gave them instant insight into markets far away from their own.

Contact us at New Perspective Data Solutions for more information or additional work samples at 630-668-3129 or