It's always good to know where the other station is. While the callsign will give you some of the information, it is often too vague, and something more precise is needed. A system called the IARU locator system (also known as the Maidenhead grid) is most commonly used.
The surface of the world is divided up into large squares each given a two letter code. These are then broken down into 100 sub-squares numbered 00 to 99. This is shown in the drawing below, where the station indicated by the red dot would have the locator IO93
These can be further refined by breaking the secondary sub-square down into a grid of 24x24 squares, numbered AA to XX starting at the bottom left of the square. So the full IARU locator for the station indicated by the red dot would be IO93GF.
There are many calculators to be found on the internet to allow you to calculate your locator from National Grid Reference, Latitude/Longitude, etc. Also many GPS units will output Maidenhead directly.
It is a good idea to find out the locator for your own home since you never know when you might be asked for it.
