The UK is one of the most fascinatingly diverse places in the world. For such a small nation the range and breadth of cultural differences are profound. You only need to drive for an hour in any direction to find people with a completely different accent.
It’s so important for businesses of all sizes from startups to big brands to be aware of these differences and be able to segment accordingly. For a businesses to ignore the diversity that exists in its customer base is to tempt disaster.
Regional difference in spending?
It’s arguable that willingness to spend money is one of the most important issues when it comes to customer diversity. If you're targeting a geographical region because of high income, you may be disappointed when it turns out that they're generally unwilling to spend their money.
Families living in Hampstead, North London, for instance, can generally afford to buy McDonald's every day of the week. However, it doesn't follow that families in Hampstead will actually buy McDonald's even once a month.
Obviously, there are lots of reasons why people in Hampstead will or won't want to eat fast food. However, it does raise the interesting question of, how do geographical regions differ in their willingness to spend money?
Based on Buyagift sales
The analysis was based on 4 years’ worth of sales from Buyagift.co.uk – an experience day provider. The study included data from over 2 million transactions. The gift market may be the perfect arena for this study as it seems to be a reflection of generosity. Having the sales data is one thing but to make this a meaningful measure of willingness to spend, it needed to be compared with income.
The study found that there are indeed vast differences in willingness to spend when it comes to different areas of the UK. It’s worth noting at this point that if a place or region’s spend per capita percentage is greater than 100%, then it's above the national average. If, however, it’s less than 100%, then it's below the UK average.
Interestingly, enough of the big and little spenders stayed more or less consistent over the 4 years. The city that came top in terms of spend over 3 out of the 4 years was Norwich, where people typically earn slightly below the national average income.
What this means for businesses
These results are obviously very interesting and applicable to business in terms of geo-targeting. They show that some areas of the country are just more willing to spend money than others, regardless of income. This may have implications for how businesses can yield more revenue from Adword’s geo-targeting.
Aside from the interesting implications and the obvious need for further research, it’s difficult to guess why different areas of the country vary in willingness to spend. It may be indicative of the relative property prices, or it may just be cultural.
Whatever the reason, this kind of geographical data needs to be taken into consideration by all types of businesses.
Check out the infographic here.