Understanding geocoding: An introductory guide

Understanding geocoding and its applications for businesses will enable you to optimise your insight gathering, marketing and location planning processes.

In this article, we will introduce you to the key concepts of geocoding and technology required to utilise it. We will also provide you with a suite of ideas on how to use geocoding to gain a competitive advantage.

Understanding geocoding

Understanding geocoding starts with a definition.

Geocoding is the process of transforming a description of a location – e.g. a pair of coordinates, an address, or a place name – to a specific location on the Earth’s surface.

You can use geocoding simply to map out an area. However, this technique is most effective when combined with data relating to your customers’ movements, logistics network or other dynamic elements.

Essentially, this enables businesses to link data and insights to specific locations, combining the ‘where’ and the ‘why’ aspects. Geocoding is therefore vital for helping businesses find out about and act on the key factors impacting on their bottom line.

How can businesses gain competitive advantage with geocoding?

These are just some of the areas in which understanding geocoding can help enhance your business activities:

Location planning

Geocoding enables you to visualise your own locations, competitors’ locations, customer locations and any other important features on your own digital map.

You can then look for relevant trends and take action accordingly. This could include:

  • Analysing the overall spread of your locations within your target market
  • Assessing the positive/negative impact of nearby competitors or complementary amenities
  • Establishing where high volumes of your target demographics are based, and what their typical movements are

With advanced location intelligence software like Periscope®, you can then automatically calculate and compare the key attributes of different locations.

For example, you can use the ‘Match-It’ function to identify locations with the same attributes as your best-performing sites in areas not yet covered. Or, use the ‘Revenue Predictor’ to establish how profitable your presence would be in an alternative location given the same criteria.


You can also enhance your marketing practices by better understanding geocoding.

On a basic level, you can use geocoded data to perform address matching. This process involves automatically transferring tabular customer address data (gathered from loyalty schemes, delivery details etc.) into spatial data.

That way, you can accurately plot all your customer locations on a digital map. You can then use this map to optimise dispersion of your marketing resources, focusing only on areas with appropriate customer volumes.

More advanced practitioners can use geocoding to automatically dispatch promotional materials when customers enter a geofenced area (e.g. a shopping centre). This helps to capture their attention at the point at which they are most likely to take action.


Finally, you can use geocoding to fine-tune your logistics network.

This starts with using geocoded data to look at the dispersion of your distribution centres in relation to your customers, and to major transport interchanges.

Plotting your customer locations and distribution centres also enables you to optimise your daily delivery routes. With this data, you can make the most out of each trip, and provide customers with accurate delivery estimates.

Not only will this enable you to streamline your delivery costs, it will help improve your customer services, and therefore your customer retention rates.

This article should go some way towards developing your understanding of geocoding and its potential effects. However, with the right location intelligence software, there is so much more to discover.

Leverage the full potential of geocoding with Periscope® from Newgrove; sign up for a free, 10-minute demo today.