Rain or Shine: Using Weather Data to Drive Business Decisions

By QuickBooks

2 min read

You can’t make it rain so you can sell more raincoats, and you can’t prevent a snowstorm from keeping customers away. But you can use the weather, inclement or otherwise, to your small business’s advantage.

Anne Kleinman, founder of Ad Infinitum, relates the story of a client who ignored the possibility of a downpour during its multi-venue event in New York City. She urged the company to prepare for wet weather, but it disregarded her advice. When it rained — and 1,500 guests needed to stay dry — the company had missed the opportunity to put umbrellas emblazoned with its logo into people’s hands and have hundreds of “walking advertisements” on Manhattan’s streets.

Don’t make a similar mistake. Use local weather forecasts to fine-tune your operations and marketing efforts and improve your bottom line. Here are five strategies to consider.

1. Price by inventory. Vacasa, which manages vacation rentals for homeowners, factors weather data into its pricing algorithm. “Weather plays an important role in the likelihood of a property to be booked,” says Scott Breon, chief strategy officer for the Portland, Ore.-based company.

Prices are adjusted based on supply and demand, in much the same way airlines manage the seats available on any given flight. “Our algorithms take weather patterns and forecasts into account to maximize revenue for our homeowners,” he says.

2. Manage inventory levels. Demand for everything from clothing to emergency supplies is often heavily influenced by Mother Nature. If you run a retail business, basing your inventory levels on weather forecasts — such as ordering more rain gear when a wet spring or summer is predicted — can help you maximize sales.

3. Advertise by forecast. The weather forecast has a big impact on when, how, and what Timberline Outdoor Services advertises. “We are set up with local radio and TV outlets to run specific ads before, during, and after big storms,” explains John Crider, president of the company’s Landscape Division in Chattanooga, Tenn. “During storm season, we market our tree service division heavily. In spring, we market our landscape division and fade it out in summer and ramp it back up in fall, for planting.”

Need help basing your ads on the weather forecast? WeatherFX, an app that’s slated for launch in the coming months, will automate the process by tying weather data points to your mobile ad campaigns and pushing out appropriate pitches to customers’ smartphones.

4. Market by forecast. Service businesses, such as insurance agents and heating and air-conditioning maintenance providers, can use imminent weather patterns to build brand awareness and loyalty.

Use your social media accounts to offer tips that help customers prepare for inclement weather. This could be, say, anything from how to clean air-conditioning filters in anticipation of summer heat to how to keep gutters free of debris before the first rainstorms of fall. When appropriate, short instructional videos can boost traffic to your website and your business, too.

5. Adapt your operations. Weather can prompt a boon or a bust for a small business. Pay attention to how the area’s climate has affected your business in the past and adjust your procedures and staffing levels accordingly.

For example, weather influences how Vacasa manages its vacation homes. “It’s not much fun to show up at your ski chalet with the thermostat set to 45 degrees,” Breon notes. “We are currently testing home automation systems that automatically raise the temperature two hours before check-in, ensure pipes don’t freeze, and automatically turn down the thermostat when the home isn’t in use.”

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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