Give me database or give me death - Part 2
by Andrew Shedden
In the first installment of this series I stressed the importance of a database in marketing your business. Creative database marketing is the single most effective marketing practice you can adopt in your business.
An effective database will save your company time and money while increasing your ROI by helping you develop highly targeted offers to the most responsive recipients, your current customers.
If your company doesn’t have a database be sure to get one set up as soon as possible. If your company currently has a customer database make sure you use it.
Databases don’t have to cost big bucks
The good news is that you don’t need to spend a fortune to buy a database. There are a great number of database options available to you. The most prevalent offline database in small to medium sized enterprises (SME’s) is Microsoft Access. While Bill Gates doesn’t really need any more money Access is the standard and is more than enough for most business needs.
Many companies (including ours) like to utilize contact management software for their database needs. Act!, Maximizer, and Sharkware are all examples of the most popular examples of contact management software. While originally designed as an aid to salespeople, these easy to use programs now do both this and possess very sophisticated database capabilities.
These programs offer simple intuitive interfaces and allow you to structure personalized and targeted mailings, telemarketing programs, and e-mail campaigns. For example, you can query (search) your database of customers to find only those who have bought a blue shirt from your company in the last two months that cost over $50. Once the database has sorted through your records and identified this group you can send them an offer for your new line of blue jackets.
Structuring your database
The following deals with some of the basics of creating an effective and meaningful database. The great news is that if you don’t feel confident about structuring your database you don’t have to bother. There are innumerable sharp programmers out there who can do the job for you at minimal cost. Simple databases can be put together in no time at all. One option I recommend is for you to register your database project on elance.com and have independent contractors bid on it.
One school of thought is that every person having any contact with your company should have their information captured and entered into your database. While there is certainly something to be said for this I don’t agree. This practice will result in a huge, unrealistic, and unwieldy database.
Measure twice cut once
The old adage used by carpenters is that when building, you should measure twice and cut once. This advice is applicable to database building as well. Prior to putting your database together you should put a great deal of thought into what information you wish to acquire. If you are not careful you can easily end up with far too many gradations in your database. There may be some reason to know who phoned you on a sunny Thursday with a full moon in the sky between noon and five p.m., but I haven’t figured it out.
Don’t be out of sorts
The best way to structure your database is to initially categorize all contacts into 2 fields. The minimum 2 fields should be prospects and customers. The third field can be suspects but I don’t recommend it. The single biggest mistake made in database development is to clog it with suspects.
Here’s how to categorize contacts in your business.
1. Suspects are companies that fit the ideal customer profile you have established for your business. This has been done through careful analysis of the common characteristics of your best customers. By contacting suspects and carefully questioning them about their interests they remain as suspects, are discarded, or advance to prospects.
2. Prospects are potential customers who have the need, desire, and ability to pay for the products and services being offered by your company. They may want to do business with you now or at a later date.
3. Customers or clients are the companies that buy products and services from you.
So how do you sort things?
The Broadfield Communications database consists of prospects and clients. We further delineate them by their area of interest. They are predominantly interested in marketing, marketing communications, or sales force development.
Line up the usual suspects
We keep all of our suspects on hand written 3 x 5” cards or on the original media (labels, mailing cards etc.) in which we received them. Because we like to keep our database lean and mean no suspects are entered into our company database.
Once, through careful questioning, they have advanced from suspects to prospects they are entered as prospects in our database. That’s it, short, simple, and easily understandable by everyone - including me - in our organization.
Prospects are good
Once suspects have expressed interest in our products and services they become prospects and are entered into our database. The fact is that approximately 3% of prospects in any market are ready to buy today.
Our database is structured so that we don’t lose sight of, or contact with the other 97% of prospects who aren’t ready to buy now.
Regular communications and promotional offers will help you nurture these prospects along. This is the most often overlooked benefit of having an effective database.
Clients
Clients are categorized by primary area of interest, monthly purchase volume, last purchase date, and other particulars. They are presented with specific offers based on various combinations of these three key pieces of data.
One final note
Prior to making a commitment to utilizing a database as a way of helping you with your marketing practices there are a few other things to keep in mind.
Make sure you keep your database updated and accurate.
Don’t let salespeople waste time entering data-have an administrator do this.
Don’t bother setting your database up unless you’re going to use it.
