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360 Marketing - Penetration Index Explained

Average - An index of 100 is considered average and indicates you have roughly the same penetration as the Benchmark.

Above Average or High Index - Any index above 100 means you have a higher penetration than the benchmark average. The higher the number, the better the penetration. A high penetration typically means it may be a good segment for marketing. 

For example, an index of 200 means you have twice the percentage of customers in this segment. An index of 300 means you have 3X the percentage of customers in this segment. There is no limit as to how high your penetration index can go.

Below Average or Low Index - Any index less than 100 means you have less penetration than the benchmark average. The closer your index is to zero, the worse your penetration is in that segment. This could be a sign that it may not be a good segment for marketing. A below average index will be any number from 0 to 99.

Example #1 - Above Average or "High" Index: Let's say that 10% of your customers are restaurants, and 5% of all businesses (in and around your geography) are restaurants. Since you have twice the penetration % into that industry, your penetration index for restaurants would be 200.

Example #2 - Below Average or "Low" Index: Let's say that 1% of your customers fall into the employee size range of 100+, and 2% of all businesses (in and around your geography) have more than 100+ employees. Since you have 1/2 the penetration % into the 100+ employee size segment, your penetration index would be 50. On average, 2% of all business have more than 100 employees, yet only 1% of your customers are over 100 employees.

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