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How postcodes are used as sales franchise territory building blocks

How postcodes are used as sales franchise territory building blocks

We are fortunate in the UK to have a robust Postcode system; but what are they?

The Royal Mail maintains a UK-wide system of postal geography codes to identify postal delivery areas. As most people know their postcode, varying organisations use this as their main geographic reference when collecting data.

This reference can be related to any geographic unit used for statistical production, such as a district or electoral ward. [pullquote style=”left” quote=”dark”]Southern Ireland is amongst the few countries that do not have a postcode, there are ways round this using latitude and longitude.[/pullquote]

In addition, when de-duplicating customer and prospect name and address records, the Postcode can be used to help qualify the match process. Postal geography is thus very valuable.

They are often used as the base building blocks when designing sales or franchise territories.

The UK Postcode has 5 components. 4 are visible for addressing purposes as set out below, the 5th – delivery point suffix (or address key) is used by the Royal Mail to define a unique address delivery point.

Postcodes are alphanumeric references comprising an outward code of 2-4 characters and an inward code of 3 characters.
For example: PO16 7DZ

PO16 = outward code
7DZ = inward code

The code is structured hierarchically, supporting 4 levels of geographic unit:

As of April 2012, the breakdown is as follows:

UK Postcode structure These 1.75 million postcodes cover over 28 million delivery points and comprise 1.6 million small user and 0.25 million large user postcodes (see below). Of the 1.75 million Postcodes, there are circa 93,000 PO Box or non geographic Postcodes.

Unit postcodes

Units are the base unit of postal geography and fall into two types:

  • Large user postcodes: allocated to single addresses receiving at least 500 mail items per day (e.g. business addresses).
  • Small user postcodes: collections of (usually) adjacent addresses. A single small user postcode may contain up to 80 addresses, but 16 is a more typical number.

Note: It is possible for large buildings with many separate delivery points (e.g. a tower block) to have more than one unit postcode within the building.


As postcode components can vary in length, to enable appropriate alignment for sorting (for de-duplication or data analysis) a fixed structure is preferred. One option is as follows:

  1. Left justify Postcode area (one or two characters) in positions 1 and 2
  2. Right justify postcode district (1 or 2 digits or 1 digit and a letter for London) in position 3 and 4
  3. Sector (single digit) goes in position 5
  4. Unit, 2 letters, go in position 6 and 7
    B1 2NZ becomes B__12NZ
    B11 3NQ becomes B_113NQ

To see how we use postcode structures to deliver our territory designs please click here for more information.

[pullquote style=”left” quote=”dark”]Canada Post introduced a special address for mail to Santa Claus, complete with its own postal code:SANTA CLAUS, NORTH POLE,

H0H 0H0[/pullquote]

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