Changes in Latitude, Changes in Attitude: Understanding Geocoding

When Jimmy Buffett sang the title of this blog post years ago, he may not have realized that he was talking about things like geocoding and data mining. But in point of fact, he was. In this post I would like to show you how geocoding can help your business, in areas ranging from market planning and analysis to compliance issues.

Geocoding: The link between geography and data

Geographic data often holds the key to information that you would never discover solely from address data – and this information, in turn, can make a real difference with your customers, prospects, and your bottom line. First, let’s look at why geography is so important:

It is much more precise. Most addresses already contain encoded geographic data, in the form of postal or ZIP codes. If you’ve ever watched television shows like “Beverly Hills 90210,” you know that these codes often mean something about your market. But is this data enough? In many cases, the answer is “no.”

Take the upstate New York college town of Ithaca as an example. It has a single ZIP code, 14850. However, its nearly 100,000 residents vary widely in areas such as income, spending, ethnicity and other demographics, and these variations are closely tied in with the area’s geography. The Ithaca area is partitioned by hills, lakes and highways, and its neighborhoods vary from wealthy, ethnically diverse residential enclaves near Cornell University, to commercial and industrial districts, to poorer or more rural neighborhoods. Actual geographic coordinates can show clear demographic distinctions that would never be clear from addresses alone.

You can map it. Unlike addresses, data tied in with latitude and longitude coordinates can be analyzed visually and spatially. Applications such as geographic information systems (GIS) can combine data with geographic coordinates to let you see and explore patterns in this data. This article from ArcGIS has some good examples of GIS imagery along with sample applications.

It provides better decision support. This is where geography and spatial analysis combine to provide business insight. Using geocoded data, you can perform a wide range of analyses, including applications such as:

  • Where to locate a new store or school
  • Finer targeting of direct marketing campaigns to improve ROI
  • Optimizing delivery routes
  • Analyzing trends in population growth and housing

Going back to Jimmy Buffett, the song that titles this post talks about how he misses the pace and atmosphere of places he has been in the past, like being in Paris or out sailing. Whether he realizes it or not, he is geocoding his life experiences. And in much the same way, you can use latitude and longitude data strategically to geocode many of your business’ interests.

Compliance: When geocoding is a must

One particular business issue deserves special mention, because geocoding is an essential component of it: regulatory compliance.

Businesses, particularly in areas such as finance and real estate, need to be accountable for a host of consumer protection laws designed to prevent discrimination in lending and mortgage origination. These include the Community Reinvestment Act (CRA), the Home Mortgage Disclosure Act (HMDA), and the Fair Lending Examination Procedures used for auditing lenders. These laws and procedures are designed to prevent “redlining” of specific areas for lending discrimination. In addition, certain areas of the US that are prone to money laundering or other financial crimes are subject to enhanced record-keeping requirements known as Geographic Targeting Orders (GTO).

These laws and compliance issues are discussed at length in a recent Service Objects’ blog post, together with a recent solution designed to help automate your compliance efforts: DOTS Address Insight, a tool that combines geocoding and address validation with important compliance data such as MSA code, state code, county code (FIPS), and tract numbers for addresses.

How we can help

Service Objects offers extensive geocoding services designed to integrate with your contact data environment. Our DOTS Address Geocode – US service translates addresses to latitude and longitude coordinates, and can also reverse-translate coordinates into estimated addresses. It features a 99.8% match rate accuracy using resources including our master database, the US Census Bureau, TIGER®/Line file, USPS® ZIP+4 tables, and other proprietary databases.

For broader North American coverage, our DOTS Address Geocode – Canada also provides real-time, property-level geocoding for Canadian addresses. Together with the aforementioned Address Insight product for compliance and other applications, these services make it easy to apply the power of geocoding to your contact database.

Need to learn more about how geocoding can help you? Talk with our friendly technical team anytime.

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