Databased Marketing

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In order for any business to work, it must become a system, so that the business works exactly the same way every time, down to the very last detail.
-Michael Gerber

The most often overlooked marketing asset of a company is the existing customer base.

This base consists of former, current, and prospective customers. For years, especially during boom economic times, the economy powered many companies’ growth and covered up a plethora of marketing sins.

The present and future is, and will be, different. Companies are beginning to see the need to market in ways that generate profits. They are having to find new ways to do this. They are not only getting new customers but are understanding the importance of finding ways to keep those customers for life. If companies fail to do this, they will lose customers faster than they can find them and, as one study concludes, 50% of all retail establishments will fail.

You, obviously, want your business to survive and flourish.

One way that you can assure a solid business is by marketing to your existing customer base on an ongoing basis.

The first step in doing this is to make sure that your company is accumulating a usable record of your customer base. If you don’t already have this set up, you must create it.

This is done by reviewing old invoices, work orders, sales tickets, receipts, or anything else with your customer information and putting this information into a database or usable file system.

Here is an example of what you can do. A telecommunications company had been in business in the local town for eight years. During that time, they had accumulated 400 to 500 customers for repairs and servicing of communications equipment. The owner had never taken time to go back to those previous customers and offer them new products and upgrades.

After  collecting the appropriate information, he wrote a letter and simply invited all 500 former customers to upgrade their communications equipment. That single letter probably cost $125 to $175. It generated $3,000 to $4,000 in revenue.

Overnight, he almost doubled what he had been averaging in communication sales in a month. You can do the same.

A clothing store had accumulated a customer base of 1,500 to 2,000 customers. As is the case with most small establishments, this owner had been approached by radio and newspaper salespeople almost daily.

He was investing $2,000 to $3,000 monthly in regular advertising. One day, as he was approached, he became really frustrated as he was writing out another check. He asked himself the question, “What am I really getting from this investment?”

In his own mind, he concluded that he really hadn’t gotten all that he wanted from his advertising. This owner decided to look at his current customer base a little closer. He constructed a letter to send out to those current customers, inviting them to a special sale.

This first letter generated thousands of dollars in sales and cost a couple hundred dollars. This is a revenue source that the company had never really seen before.

Statistics have indicated that 65% of people stop doing business with a company because they get the feeling that they are not important.

They get a feeling of apathy towards them from the company employees. It’s not the price, quality, selection, or any other reason that causes customers to stop doing business with a particular business.

The major reason people stop doing business with a company is because they stop feeling as if they are important to that company.

In other words, customers expect you to market to them. They feel unwanted if you don’t — and they will go someplace else.

Be careful. Current customers don’t want to be treated like everyone else. They don’t want to receive just another “flier” like you send everyone. They want to be told that they are special, that they are important to you because they are a current customer.

Therefore, you must be able to segment your customer database by a number of different factors. The single most important of these is which people are current customers, and which are past or prospective customers.

How much do your customers spend on your type of products and services? How many children do they have? When is their birthday? Where do they live? What are their hobbies?

Never stop gathering information about your customers. This information should be stored in a computer database.

For more information on how to re-capture past customers; retain and upsell current customers; and followup, educate, & close prospective customers to  dramatically increase revenues and profits without spending more money on advertising, contact us today or just call 646-450-4120.

Or, click here to find out more about the next pillar: how to use strategic alliances to not only build your business over the short run, but also to set you up for long term success which can’t be obtained any other way.