When Edenred Essentials came to us to help them launch their fleet fuel card for the first time in the US, we knew we needed to approach the problem strategically. We needed to identify which companies were our best target audiences because they had challenges that Edenred’s product could help them solve. We needed to discover where to find the highest concentration of these prospective companies, and then we needed to help Edenred stand out in an otherwise crowded marketplace.
What we knew.
Edenred’s offering focused on companies with small-to-medium fleets where productivity and controlling expenses are key. In addition to this, Edenred’s card and application had an advantage in being able to work seamlessly for a multi-lingual audience. Finally, at the beginning of the campaign, overall fuel costs were up significantly across the US, with some markets facing higher fuel costs than others.
Each of these facts helped identify our best test markets, but none by themselves were enough. So we decided to build out a targeting methodology that leveraged all of these to find our best markets.
Starting our research
Initial research into US small businesses showed that most operated in three macro sectors: retail, specialty trades, and general construction. With this information, we started by digging into data from the Bureau of Labor Statistics (BLS) for details regarding specific industries and where there were higher concentrations of these types of companies.
Using the BLS data, which provides totals by industry and metro area, we classified our target metro areas by the total addressable market within our Industry Groups (Retail & Trades and Contractors). We then broke these down further by industry and NAICS number. We assigned each metro area to tiers, with Tier 1 having 8,000 or more target companies, Tier 2 having 4,000 to 8,000 target companies, and Tier 3 having 2,000 to 4,000 target companies.
Metros with the most total companies
Based on the total addressable market for the number of companies, the data said the top metro areas were:
- Philadelphia
- Washington / Baltimore
- Chicago
- Atlanta
- Miami
- Orlando
- Dallas
- Los Angeles
- San Francisco
- Seattle
Metros with the highest fuel costs
However, the volume of companies in our target industries was just the start. Next, we wanted to understand which parts of the total addressable market were enduring the highest fuel prices and might be the most open to a solution to help control those costs.
We used data from the AAA Advantage Fuel Costs report to see which states had the highest and lowest fuel prices.
Here we saw the highest fuel costs on the West Coast, New York, and Pennsylvania, while the lowest were in states like Texas, Louisiana, Mississippi, Alabama, Arkansas, Oklahoma, Kansas, and Missouri.
If fuel cost were the primary driving factor of prospects’ interest in a fuel card solution, this would have eliminated markets like Dallas and Houston.
Metros with a high percentage of Spanish speakers
Next, we looked at markets where Edenred’s multi-language support could be a distinct advantage. To identify which markets had the highest percentage of Spanish speakers, we looked to data from World Population Review.
This data indicated that metropolitan areas in the Southwest and Florida had the highest percentage of Spanish speakers, where Edenred’s strong language performance could be beneficial.
Highest business activity
Finally, we looked at building permits to understand economic activity in the different markets. While not all targeted industries are associated with building and construction, many are, and more generally, building permits are often used as a leading indicator in economic data.
This data suggested that the following metro areas could be good areas to target
- Philadelphia
- Atlanta
- Nashville
- Orlando
- Dallas
- Houston
- Austin
- Pheonix
- Los Angeles
- Denver
- Seattle
A comprehensive scoring model for targeting the campaign
As mentioned above, we did not believe that any one factor was strong enough to be the only factor for our campaign. Instead, we developed an aggregated scoring model with all four elements included and allowed for a weighting of the importance of each factor.
Points
With the importance of targeting markets with a high total addressable market, we assigned four points based on the total number of companies in the scoring model.
Points
Next, we assigned two points each for average fuel costs and business activity (Housing Permits).
Point
Finally, while important, we felt that the percentage of Spanish speakers was less critical, so we assigned this factor one point.
The resulting scoring identified 21 markets across the US as priority targets. Since this campaign was a test, some of these markets were left as untreated controls, while others were actively marketed to during the campaign.
Delivering 4x performance results
While this article is focused on market research leading up to the campaign, the campaign that resulted from this research was successful.
Our test markets outperformed the control markets by four to one, with improvements throughout the campaign. Without this market research, achieving these results would have been much less likely.
