What is a catchment area?
A catchment area is a geographic area from which businesses, stores, services can attract customers or users. This area can be visually represented on a map.
Mapping catchment areas has several very beneficial uses:
- Analyzing potential, so that the catchment area where a company should be located can be chosen
- Managing sales territories in order to steer a commercial strategy, and save on sales representatives’ costs and time
- Running targeted local marketing strategies, by optimizing volumes through extraction of the number of inhabitants in an area and their zip codes
- Optimizing logistics through the use of isochrones, which can make it much easier and cheaper to manage technicians’ operations or delivery areas
When you are setting up a company or opening a new point of sale, catchment area maps are particularly important, as they can be used to conduct local market research and find the best place, so reducing the risk of such investments. Franchisors use them for territory management and network development. Catchment areas can be then analyzed with information like demographics, competitors and CRM data, which is generally provided by geomarketing platforms.
How can you set out a catchment area?
There are two steps to setting out a catchment area:
- Choosing the method: isochrone, isodistance or official boundaries
- Choosing the parameters: miles/kilometers, time, distance and mode of transport
Usually, catchment areas are created using isochrones. Isochrones are based on different travel times, depending on the type of travel: on foot, by car, by truck, on public transport, etc. But they also can be drawn as radius. Alternatively, they can also be drawn on the basis of distance in kilometers or miles (isodistance). Territories can also be set out using using official boundaries, such as zip codes.
Isochrones are the most-used method because of their accuracy on the ground. For example, zip codes can’t reflect the obstacles customers might face – for example, there could be a river or mountain, which they might struggle to get around.
The right choice of method and parameters will depend on sector, business type and customer behavior, among other things. To know which is best for you, conduct market research or at least survey your prospects and customers, so that you can understand their habits and know where and how you can draw customers to your location. Don’t hesitate to use CRM data.
How do you calculate a catchment area?
You don’t need to calculate a catchment area yourself. You just need to find the right tool to do it for you. OALLEY offers an algorithm that automatically calculates catchment areas for you, based on specified parameters:
- Travel-time area: time in minutes and mode of transport
- Travel-distance area: distance in kilometers and mode of transport
You can also draw them on a map manually with a lasso tool. Start creating your area now.
How do you choose a catchment area tool?
Lots of mapping software packages offer the ability to draw catchment areas. It depends on what you need. With OALLEY, you can use a variety of methods to draw up to 10 areas on a map free of charge.
After that, you need to sign up if you want access to all the features that enable you to take your analysis a step further: unlimited maps, unlimited areas, population data, importing data, automatic reports, etc.
How do you calculate catchment area using a GIS?
It depends on which GIS you choose.
If you choose OALLEY, the platform is very intuitive and easy. However, if you need help, you can use our step-by-step guides:
Catchment area tool
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