 How
to Build Your Customer Database
By Craig Huey
Your database is the key to survival in bad times.
And it’s the key to maximum profits in good times.
The goal of your database is to maximize customer
value through conversion, retention and repeat
sales. And, it allows you to create new marketing
opportunities. Here’s what you need to know about
database marketing.
Everyone is collecting data on who is, or should be,
buying their products or services. This data does
not just consist of names and addresses. It includes
buying history: what people bought, when they
bought, and how much they bought. It also includes
birth dates, anniversary dates, marriage status,
number and age of children, likes and dislikes. It
opens up new ways to market more products and
services for both consumer and business-to-business
marketers.
It means:
• New ways to market smarter and reduce costs.
• New ways to market additional products or
services.
• New ways to keep customers—through extended
product usage.
The business market today is changing rapidly. Those
who properly master the understanding of how, what
and why customers make purchases, and those who are
able to influence buying decisions with highly
targeted marketing efforts—mail, video,
telemarketing, etc.—are going to come out on top.
A database is not just a collection of names. It’s a
collection of individualized, consumer behavioral
information, isolated to each customer. The database
concept inputs data and generates information that
allows for selective targeted marketing. It provides
comprehensive, up-to-date and relevant information
about prospects and/or clients, and will pay for
itself quickly with visible, measurable sales.
As database marketing has evolved during the last 20
years, it has become more and more cost-effective.
In 1973, it cost $7.14 to access a customer’s name,
address and purchasing information. Today, it costs
about $.01-.02. This is due to advanced microchip
technology that makes processing information faster
and easier than ever before.
Building Your Database
As you start your database, the most elementary data
collected is your customer’s buying history: what
they bought, when, how much and the source of the
order. Here is an example of a typical database
structure. An element of information about the
customer is called an attribute—a fact about the
individual or company. The following attributes are
common to most direct marketing databases:
|
• |
Name |
• |
Service needs |
• |
Source of original
inquiry |
|
• |
Job function/title |
• |
Potential profitability |
• |
Sales materials
supplied |
|
• |
Company name |
• |
Readiness to buy |
• |
Cumulative billing |
|
• |
Company address |
• |
Promotion medium
(mail, video, etc.) |
• |
Prospect/customer/friend |
|
• |
Company phone |
• |
Decision-maker or
influential |
• |
Salutation |
|
• |
Home address |
• |
Data record entered |
• |
Record of contacts by
phone |
|
• |
Home phone |
• |
Data of last order |
• |
Total number of
promotions received |
|
• |
Market/industry code |
|
|
|
|
Your goal is to ultimately develop a high-quality,
long-standing relationship of repeat business. With
proper analysis of the database, predictive models
can be created to mail selectively and with the
right frequency.
The ultimate result is that you can provide your
customers with what they really want, when they need
it. Properly implemented, you can increase your
response rate and lower your cost-per-order. The
result is higher profits.
Craig Huey is president of a direct response
advertising agency, Creative Direct Marketing Group,
Inc and InfoMat. 310-212-5727 (craig@cdmginc.com).
|
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