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Location-based analytics helps Wendy's find its way to new sites

Most people remember geography class as a liberal arts concentration. But John Crouse of Wendy's is showing that geographic knowledge can make for a valuable pairing with statistical analysis as part of location intelligence efforts.

John Crouse has been working with location-based analytics in some capacity for more than a decade, so he's surprised that it's still being talked about as a new thing.

"I've been doing this for 12 years, I was in school for six years learning about this stuff, and to this day a lot of people consider spatial analytics as a very young industry still," he said.

Crouse is director of real estate services for The Wendy's Co., the holding company for the popular fast food chain. In that capacity, he primarily uses location intelligence tools to identify optimal locations for new restaurants. But in a broader sense, he's helping to popularize location analytics inside the company by demonstrating how useful it can be.

John CrouseJohn Crouse

Currently, the real estate services department at Wendy's is small: just Crouse and one other worker. They use a Geographic Information System (GIS) tool from Esri called Tapestry, which allows them to segment populations based on a multitude of demographic characteristics, including age, income and ethnicity. Crouse said that by mapping out the characteristics and comparing the results to demographics data in the areas surrounding existing restaurants, they can pinpoint locations where new ones are likely to succeed.

Cooking up new uses for location intelligence

But Crouse expects his department to grow. He recently gave a presentation to other departments on what he's doing with the GIS tool and how location intelligence can be used for other purposes. He has since received inquiries from the marketing and operations departments at Wendy's to see if they can use the tool to improve ad targeting and develop new menu items. It may take more staff, including additions to his team, to satisfy the new demand, Crouse said.

I've been doing this for 12 years, I was in school for six years learning about this stuff, and to this day a lot of people consider spatial analytics as a very young industry still.
John Crousedirector of real estate services, The Wendy's Company

There wasn't always this level of interest in location intelligence at Wendy's. Crouse said that when he began working for the company two years ago, it had just recently partnered with Esri to use a number of the software vendor's tools -- but it wasn't using the software very extensively. "They wanted to better leverage the different tools," he said. "Historically, Wendy's hasn't tapped into GIS."

Even once he started using Tapestry and demonstrating results internally at the request of a higher-up, there was reluctance on the part of other departments to using it for their own purposes. Crouse said the hardest thing about doing location-based analytics in his role is making the most of the GIS tool's features and getting buy-in from different groups within the company.

"Everybody has their own process, and for the most part they think it's a good process," he said. "A lot of education goes into explaining what GIS is and how to think about things spatially."

But, he said, as his wins piled up, some of the company's executives began acknowledging the results internally. In a July presentation at the Esri Business Summit, Crouse estimated that Wendy's saved about $750,000 in what would have been wasted expenses over the last two years by adding a spatial component to its analyses of potential new restaurant locations.

Mix of skills leads to location analytics path

Crouse is uniquely qualified to lead this charge on behalf of location intelligence. He holds a master's degree in geography with a concentration in location analysis from a now-defunct program at the University of North Carolina at Charlotte. The program was one of the few in the country to teach the business strategy behind retail site location and market research and pair that with classes in heavy statistical analysis, according to Crouse.

But UNC-Charlotte discontinued the program in the early 2000s. And with similar programs still not widespread, Crouse sees most businesses that are looking to embrace location intelligence having a hard time filling analyst positions with people who understand both the geographic and statistical components.

"If you're an organization that's looking to marry the two [skills] in one person, that's challenging," he said. "Programs aren't out there as I think they should be to help people understand this information. It's a very niche industry."

That might not be a pressing problem right now for companies that aren't yet looking to make location intelligence a central part of their business intelligence and analytics strategies. But Crouse said that as time goes on and more businesses become aware of the potential of location-based analytics, more workers with skills in this area will be needed.

And Crouse thinks that day will come sooner rather than later. From his perspective, you can't deny the power of location intelligence. "You certainly get your return on your investment once you get the right tool in place and the right people working on it," he said.

Ed Burns is site editor of SearchBusinessAnalytics. Email him at [email protected] and follow him on Twitter: @EdBurnsTT.

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