Your Most Valuable Asset - Your Client Database
These days, one-on-one marketing—that is, contacting people directly—is fast becoming one
of the best forms of marketing available.
This is happening for some very sound reasons—better response rates, higher sales, improved profitability, and the creation of a saleable asset, just to name a few.
This information, then, is designed to give you insight into some of those benefits and just why your customer database—a detailed list of customer names, personal details, and, in some cases, spending patterns and other information—is so important to the future of your marketing.
A gold mine at your fingertips
As business owners or managers, we’re constantly looking for people to sell to. You know, people who match our products and services, people who want what we’ve got, appreciate that we offer value for money, and more.
And yet, each and every day, every business deals with tens or hundreds of those people. People whose needs DO match your products and services, people who do want what you’ve got, people who know you offer value for money, and more.
People called your customers. And other people like those soon-to-be customers who have made inquiries.
Amazingly, the opportunity to tap into this huge resource as a marketing method is lost time and time again.
Because we say we’re too busy, wouldn’t know where to start to capture the all-important customer details needed to make this asset work for our businesses. Mostly because it seems more important (and sometimes easier) to concentrate on continually winning new customers instead of tapping into the hottest list in town—your customers.
And yet, once again, the whole process is so easy.
What is the process then? Simple. Gathering names or other details, creating your customer database, and in doing so, building your most valuable asset. In fact, an asset so valuable it can be sold. Let’s look at some other reasons why building this database is just so important, and then you’ll learn some easy and useful techniques to do so.
Your customer database affects 1 of the 4 key ways to grow your business
There are 4 fundamental ways to grow your business: Win new customers, get them to come back to you more often, get them to spend more when they do, and improve the processes in your business to ensure that you achieve the first 3.
Customer databases are involved in the second way to grow your business—getting customers to come back.
You see, the more times your customers purchase from you, the greater your profits. And the greater your profits, the greater the longevity of your business.
Because you paid to acquire a customer on the first sale, every other sale after that has no cost other than the cost of the goods itself or the labour to complete the service, both of which would be covered in the price. So the more sales you make to a past customer, the more profits you keep.
It’s like the icing on the cake. And it’s a huge opportunity for your business.
Further, studies show it costs 6 times more to win a new customer than it does to have an existing customer come back and purchase again. As such, if you can build repeat sales for your business, you’ll be even more profitable.
There are many, many ways to encourage your customers to come back. The first tool you require to benefit from ANY of them is your customer and potential customer database.
Having a customer database is an integral tool for developing the second way to grow your business and increase your profits.
Also, your customer database is a tool that when used properly makes you…stand out!
Standing out is possible—easily, effectively, and economically—through your customer database.
As other forms of marketing become more expensive for the limited results they often bring, one-on-one marketing is becoming an integral part of many marketing plans.
Large and small businesses are placing more and more emphasis on collecting useful information about their clients, including spending patterns and contact details. Many collect this information through competitions. Others through merchandising campaigns—a customer fills in some information (for example, sending in a certain number of product labels or service receipts) that is redeemable for merchandising products.
Merchandised products—attractive products that are useful to the customers and that promote the business as well, like caps, T-shirts, jerseys, jackets, umbrellas, pens, coolers, sports bags, drink bottles—are becoming more and more popular.
The number of labels determines the products a customer can select. In fact, this strategy becomes triple-edged! One, the business collects critical information about each and every customer who responds. Two, the customers are encouraged to buy more than perhaps they would have so they can get the product they really want. Three, the customers wear or use those products to further promote your business to friends, family and associates.
In some cases, merchandised products have become another sales arm for some businesses, large or small. Many send the information with credit card numbers, money orders, or checks to purchase the merchandise outright.
And this is a great, often inexpensive way for businesses to capture vital direct marketing information about customers. Plus, it’s fun for the customers.
Some huge companies like Coca-Cola, Pepsi, and liquor and tobacco companies have become particularly focused on these sorts of promotions in the last few years. Reason being, their research shows that in only a few short years, this will be the very best way to stay in touch with customers on a one-on-one, attention-grabbing basis.
Marketing this way gives your business an edge.
You see, if someone has purchased from you before, they know you. You already stand out from all the other promotional mail. Customers will be more interested, curious even, to find out why you’re contacting them. You’re already ‘in,’ if you like!
Besides that, contacting a person one-on-one means that you no longer compete with all the other mass marketing forms out there, such as television, radio, print, and so on. Essentially, contacting someone personally means that your marketing material breaks through the clutter of all the other marketing materials a person is bombarded with on a day-to-day basis.
So let’s look at developing your customer database
Many business owners shy away from a customer database as a tool, thinking it looks like far too much like hard work.
And yet, it doesn’t have to be that way.
Actually, it could make your life that much easier.
If you already have a customer database and a process to continually build that database, bear with us. You might find out how to improve it and just what it could mean for your business.
It all starts and finishes with easy-to-ask questions. In particular, asking ‘incomplete questions’ is very good for gathering personal details.
These questions can be softened by the following sorts of statements:
- Could I just ask…?
- Tell me…
- By the way…
For example, asking questions like these will build your database:
- ‘By the way, your name is?’
- ‘Once again, my name is Jenny Tucker and yours is…?
- ‘So that I can send that to you, your mailing address is…? And in case of a special delivery, your street address is…?’
- ‘Just in case something crops up before then [Customer Name], your phone number is…?
You can also use questions like these to track other important information, such as the source of your inquiries. (This in turn can help you make better decisions within the framework of your marketing budget.)
‘And before you go, can I just ask, how did you hear about us?’ ‘How many people do you think will be using the [product or service] regularly?’
This information can then be included in your database.
Other information you can note could be things like what was purchased for what cost and their sex and occupation if you know it.
If you wanted, you could take these questions a couple of steps further. You could go on to ask:
‘So that we can understand your needs fully, some more information would be helpful. So [Customer Name], could I just ask you a couple of other questions about yourself [or your business]?
Once you have permission, ask the following questions, which would be relevant to your business:
[Customer Name], what would you classify your occupation as?
Which of these age groups do you fall into:
Your level of income would fall between:
- Or greater?
What mattered most to you when you were looking for a [product or service or your type of business]?
What are you looking to get out of your [product or service or relationship with your type of business]?
And so on.
This information is important because you can then complete ‘searches’ on certain characteristics of customers.
For example, you might want to send a mailing to your female customers, those between the ages of 35 and 45 who have spent over $50, to promote a certain product or service designed to suit that particular market.
Or you might want to send a mailing only to those particular customers who’ve purchased more than 5 times or spent more than $1,000.
Your database will help you to refine your marketing to suit the people receiving it. That way, you can expect far better results for your investment.
Collecting this information also makes it easy to classify your clients as A (your best clients), B (clients with potential), C (clients who spend a limited amount), and D (those you should pass over to your competitors!).
This further helps refine your marketing and your strategies so that your offers, headline, text, and so on are tailored to appeal to each different type of customer, and, because you’re contacting them on a one-on-one basis, each individual customer and potential customer as well.
The same steps apply to your prospects. It’s just as important to gather information on these people. Then, you can also classify these prospects, and you can better tailor your marketing to meet their needs and push their ‘hot buttons.’
This can be taken just one step further, too. This information makes gathering referrals even easier, as well. You see, you could request referrals from certain types of customers, the ones who purchase certain types of products and services you’d like to sell more of.
You can also use this information to assist in establishing ‘host-style relationships,’ where other businesses refer people meeting that description to your business!
Of course, there are a multitude of database computing products out there. Many of them inexpensive. Find one that suits your needs best!
Build on your asset
It’s possible to grow you potential customer base by finding ‘lists’ elsewhere.
For example, every city has ‘list brokers.’ These people find and then adapt, classify, and massage thousands and thousands of names and details into workable lists ready for mailings.
When purchasing lists, there are some important issues to bear in mind. Only purchase from a broker who offers a guarantee on the percentage of ‘return to sender’ mail you receive. That is, anything over and above a certain percentage means you receive a partial refund. Often these lists will not be ideal, and you will have to tailor them to your needs. To do this, you’ll have to complete a couple of test mailings.
Also, be very finite in the characteristics of the target list you desire. For example, if you’re looking for individual customers, you need to specify the age, sex, income bracket, and occupation groups you’d like to mail to. And you can define this list further by selecting certain suburbs.
On the other hand, if your customers are businesses, you need to specify the size of the business by turnover and number of staff, years in business, industry type, and so on.
Sometimes, although more time-consuming, a better way to add target potential customers to your list is to pay some telemarketers, perhaps even university students, to create a list for you. For businesses, they would simply pull out your phone directory and work through those industry sections of interest to your business. For individuals, it’s a little tougher and far more time-consuming, considering the amount of inappropriate or unqualified people you might call.
Another option is to buy CD-ROMs from various agencies, research bodies, government departments, and possibly even your phone directory company itself.
When you’ve identified your types of customers and those who you’d like to win more of, one way to grow your customer list is to approach a noncompeting company and offer to promote their services to your customers and yours to theirs. That way, you both access double your client base in no time at all. When you’ve completed this, you can add those names and details to your list.
Trade shows and industry fairs
Trade shows and industry fairs are a great idea ONLY if you’re going to gather potential customer data. For example, name, address, phone number, products, or services they’re most interested in, budget, when they’d want or need it by, and so on. So use these events to gather priceless information that will help you not only make that specific sale, but also create invaluable information for your database.
You can do this easily by having every representative ask each inquirer the necessary questions each time. Or have the clients provide these details by entering a competition for something great.
An example for you
A database screen to give you an idea
A screen from a type of database is duplicated here. This comes from a business development firm whose clients are professional firms. It gives you some idea of the information that can be kept on a database. At the bottom of the screen you’ll see there are other areas you could explore within this database, such as notes, history, activities, marketing, and more. This screen gives you ‘firm information’ and covers the basic details about the client.
Of course, yours may be far simpler than this example. But the important point is to note what could be done.
After a shaky start, a jeweller does discover the gold mine
Another example comes from a jeweller. He became very interested in the possibilities of ‘professionally’ servicing his customer base through regular mailings. Interestingly, the initial mailing to 5,000 past customers was an eye-opener.
He developed his mailing around his 15 years in business and wrote to his customers to invite them to join him in celebrating his 15th anniversary. As a little ‘thank you’ for being part of this growth, he invited them to come into the store over the next 5 weeks. And, with their next purchase, receive a gift from the ‘Birthday Treasure Chest.’
The fully personalised letter was accompanied by a full-colour invitation depicting valuable gift ‘treasures’ (each around $100 retail) spilling out of a jewellery box. The mailing package was individually addressed, with a stamp, ‘dressed up’ inside with little touches like tissue paper and a red wax seal. It was clearly, an interesting, even exciting mailing to receive.
The mailing went out and several things happened:
He was astounded to learn that his valuable customer list, compiled from invoices over the last few years, was very out of date. Lists date very quickly. People move on, change jobs, marry, travel, pass away all the time! The only way to have an up-to-date list is to use it often.
If you do go back and build a database from past sales information, which by the way IS still a good idea, just be sure to count on a 20 to 30% return rate—letters will be sent back to you because the post office can’t find the person.
The jeweller discovered that his list contained people he hadn’t counted on—bargain hunters who purchased an absolute minimum to get the gift—rather than the upmarket, discriminating people he thought he had.
Again this shows the importance of customer classification. These people, probably because of the low value of their initial purchase, might have normally been classified as C clients. As such, they would not have been invited to participate in this event.
On the other hand, he discovered great loyalty among his ‘true’ market. Many accepted the gift offer graciously, and others expressed that they’d always come to him and felt the gift unnecessary. But they genuinely appreciated the gesture.
So, from an up-front dollar point of view, the mailing and using his most valuable asset—his customer database—was only a lukewarm success. Or was it?
You see, that initial mailing yielded a great deal of valuable information that put this jeweller on a path toward servicing his customer base through direct marketing, and it’s years ahead of his competition.
So here’s what he did:
He went back to the drawing board and initiated a computer program, like the one shown here, that gives him access to his database, his customer’s buying patterns, in any format he wishes: by date of purchase, frequency of purchase, average price range of purchase, item type, and by staff member who served them.
He totally redesigned his receipts to record the full name and address details of each purchaser. So no one could leave the store WITHOUT their name being captured.
Team members were trained in questioning techniques (like those outlined here) to gather the name and address in a pleasant, nonintrusive way. They were told about the value of the information they were collecting.
Team members were then encouraged to gather other ‘intelligence information’ through friendly conversation with each customer. Information like birthdays, anniversaries, upcoming special events like graduations, christenings, and so on. They’d note the information on the back of the receipt for ultimate input in the computer.
So in this case, the jeweller is able to write to customers, not with generalised, sometimes inappropriate mailings, but in an accurately targeted way personalised to the customer.
It really is the perfect promotional vehicle.
For example, if the jeweller knows a customer (or a group of customers) likes and often buys yellow gold, he can write to them to promote his new, hand-crafted, award-winning, yellow gold pendants.
He could even go so far as to remind husbands about important upcoming dates like anniversaries. And he could even suggest specifics because he might know what the wives like. What a service!
Better yet, as his database grows, he has a guaranteed lucrative market that is his alone. He can write to them privately and personally. His nearest competitors can only rely on mass advertising in the general media!
Based on this example, you’d agree something great can come from something as simple as asking for names and addresses.
Perhaps you could take some of these ideas, apply them to your business, and begin (or continue) to build your most valuable asset—your customer database.
Contact a member of our team to help you discover the goldmine in your database