Armando Lanuti, President of Creative Works, discusses the problems and downsides with demographic ring studies (and why amoeba shaped studies are much more helpful).

Welcome to another 360 Insights video; where we share actionable tips and information for those in the entertainment industry. Today I’d like to talk about demographic ring studies.

Now, when most people are getting a demographic study done for their business plan they do a typical ring study of three, five, seven and maybe 10-miles. I’m going to recommend that you actually consider doing an amoeba-shape study. An amoeba-shape study differs a little bit because it takes into account geographic barriers. Examples of geographic barriers might be a bridge, like if you live in New York and want to cross over into other places. In places like Indianapolis, its areas of traffic or construction in certain areas that might affect a family’s willingness to travel to a facility if that has an effect on their ability to travel.

Another thing that you’re going to want to look at is not just the mileage, but actual drive time. The typical family is willing to drive up to 20-minutes without thinking about it. Anything further then they have to determine if they’re willing to load up van or car with the kids. Even think about it in your own life; how far are you willing to drive to go to dinner or to go out for entertainment? Instead of doing a three, five, seven, 10-mile ring study, I recommend doing a five, 10, 20-minute amoeba drive time study to get an accurate measurement of how many people are in that market. Again, Indianapolis—I can get halfway across the city in 20-minutes; Chicago? I might only get a couple of miles. It can really make a difference in the market that you’re in using the drive time versus just using the miles.

Another couple of key points that you’re going to want to think of when doing my demographic ring study are first, what is that household income? You really want it to be north of $70,000 to ensure that there’s enough financial stability within your market to provide your business with plenty of opportunity to grow. Second, consider the demographic and the ages. A lot of people will consider between 7-to-18-year-olds as their primary demographic. But, they forget to look at that 2-to-6-year-old market, who will replace that 7-to-18-year-old market as they age-out. Make sure to keep that in mind as you begin to look at those age demographics.

We hope this helps. Tune in next time. Now get after it!