Wednesday, 6 August 2008

Your Database – A Powerful Marketing Tool

So, how valuable is your customer database? Figures will vary from industry to industry, but it is a fact that it costs a lot more money to attract a new customer than it does to retain an existing one. And think about the head start you have with your existing customers. For starters, they not only know your business and what you do, they actually like you enough to do business with you. But how often do you talk to them in between transactions?

One of the first questions I ask any business I go to talk to is “How good is your database?” Without fail (and this includes the honest big companies as well as smaller businesses), the answer is “Not as good as it could be.”

What do we mean by good? Here’s 10 questions for you to test yourself on:

  1. Is your database in a readily accessible format, i.e. electronic spreadsheet?
  2. Do you update it regularly?
  3. Do you know what your customers bought from you?
  4. Do you know why they bought from you?
  5. Do you know where they heard about you?
  6. Do you know when they might be looking to buy again?
  7. Do you contact them just prior to that time?
  8. Do you keep in touch with your customers and tell them what you are doing, or make them aware of any new products and services?
  9. Do you tailor your customer contact to make it relevant for them?
  10. Do you follow up your customer contact with a phone call?

I would hazard a guess that most businesses would probably score between 3 and 5, quite a few would be 1-3, and very few would hit 7 upwards.

The question is - in these difficult trading conditions, can you afford to take your customers for granted? It is a safe bet that those businesses that are succeeding are using database marketing to drive their business. From supermarkets to insurance companies, high street clothing stores to mail order wine clubs, leading businesses collect information on their customers, and talk to them as often as they can.

So, assuming you have a database (and if you haven’t, now is the time to start building one, perhaps by asking customers to leave their business card for a prize draw, or collating your sales records into an electronic format), and you agree that keeping in touch with your customers will help your business, what to send them?

This will depend on your industry, as will whether electronic versions such as e-shots will work better than a nicely presented flyer or eye-catching direct mail piece (we recommend trying both, and asking your customers which they prefer), but here are a few starters for ten.

If your products are seasonal, you’ve got a great excuse to mail your customers at least 4 times a year. If not, why not create a reason, linking in to events in the calendar, or even your own special offers? Give people an incentive, and for best results put a time frame on it – this encourages a faster response.

It is also vital to portray your business in a professional manner, as well as making your message eye-catching, so don’t forget to put aside some of your budget for good quality graphic design and print – it really does make all the difference as to whether your mailer is read or not.

Above all else though, please dedicate time to getting your database up to date, add new customers whenever possible, and talk to them. When the responses come, don’t forget to update their details, and remember, you need to market regularly to see real results. Work on the basis that your customer needs to see three different communications from you before they start to remember you. Good Luck!

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