At first glance, “geodemographics” might sound like a convoluted buzzword spawned by the “big data analytics” revolution. But geodemographics is a simple tool that could transform the way you find new business within your community.

“[Geodemographics] is about having a profile of your neighbourhood,” says Alan Middleton, executive director with the Schulich Executive Education Centre at York University in Toronto, “and knowing how your products and services match the preferences and needs of those around you.”

Gaining that knowledge is how geodemographics can be useful for financial advisors, Middleton says. Using this tool can take some of the guesswork out of determining where your potential clients reside.

For example, imagine being able to stand at your office doorstep and know precisely how many locals within a five-block radius prefer to invest in mutual funds, segregated funds or GICs, as well as how many prefer stocks over bonds – and whether these investments are held in registered or non-registered accounts.

“This data can help [advisors] turn cold leads into a warmer ones,” says Emily Anderson, director of client advocacy for Toronto-based Environics Analytics, which produces geodemographics- analysis software called WealthScapes.

“If you know what kind of product or service a client might be interested in and how much they could have to invest,”Anderson says, “it gives you a head start on where to start your conversation.”

In today’s competitive market, many third-party firms are beginning to offer software that can help you sift through massive quantities of data that can give you a leg up on your competition, helping you to find where potential growth opportunities lie.

WealthScapes, for example, combs through the mounds of data released by the Bank of Canada, Statistics Canada and the Canada Revenue Agency to provide a neighbourhood-level balance sheet of personal assets and debt.

(WealthScapes does not cover life insurance. There isn’t sufficient data released by institutions, Anderson says, to create an accurate reflection of overall coverage.)

Still, she says, using geodemographics can be a “smart” way to help you drum up new business, particularly if you are hamstrung by tight marketing budgets.

April-Lynn Levitt, a coach with the Personal Coach in Oakville, Ont., says that although such tools can be helpful in business development, they shouldn’t be seen as a panacea. Geography alone is too broad a metric to use to recruit new clients. You might have carved out a profitable business already by working with a specialized niche group of clients, such as business owners or retired professionals, for example. So, geography alone is not going to help you find new “ideal” clients.

“You need to have more than one layer of analysis to be successful,” Levitt says. “So, if you used [the geodemographics tools] to help you build out a certain niche within a geography or to find high-net worth clients in a specific area, that would be better.”

Moreover, she adds, although these advances in quantitative techniques could have a significant impact on the advisory channel in the not too distant future, for the time being, you shouldn’t lose sight of some of the tried-and-true techniques of building a strong business – which include face time and networking.

“You should not put all your marketing eggs in one basket,” Levitt says. “I can see this strategy working in tandem with other things, but we still find that the best methods of marketing and attracting new clients is still based on relationship-building.”

Middleton agrees that geodemographics tools should be used as a complement to – not in place of – more traditional marketing methods. Nevertheless, he makes the case that geodemographics can be a guiding light for advisors who are looking to expand their business into new markets, such as the burgeoning pockets of immigrant communities in the major cities.

“Canada’s demographics are changing,” Middleton says. “This could be a way to help you get a foothold and build a reputation and trust to keep your business growing in the future.”

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