Marketing Buying Power Index
A buying power index can be a powerful and efficient way to target highly desirable customers. The weighted index converts the Survey of Buying Power’s three basic elements-population (the demographic factor), Effective Buying Income (the economic factor), and retail sales (the distribution factor)-into a measurement of a market’s “ability to buy,” expressing it as a percentage of the national total (100.0000%). The county’s (or other market’s) share of the U.S. total of each of these elements is multiplied by a fractional weight: .5 times the percent of U.S. Effective Buying Income, .3 times the percent of U.S. retail sales, and .2 times the percent of U.S. population. The sum of these weighted percents is the BPI. This spreadsheet breaks-down the buying power of residents of Howard County Maryland, by zip code.