Building a Customer Database
This white paper will explain how a customer database could benefit your business and provide a simple guide to what you need to know before you get started.
A Customer Database - What is it? And how to use it!
Your customer database and potential customer database is the source of your trade. You need it to generate repeat business in the future, or as a fall back when times get tough and as an asset of your company when you want to sell up.
The most important thing, above all else, when compiling your database is ‘include everyone' that shows even a minute interest in your company and what it is you do. Everyone that calls or meets you at a convention, venue or meeting is sent information - you should work toward improving and increasing entries. Without any clients your company is worth nothing - so don't neglect keeping records of the people you meet. Remember that it is the value or the information that you can collect; not the computer program you are using!
The smallest and largest companies spend lots of money annually on advertising to increase the amount of business they have and often they don't always target new customers, but the existing ones they have listed in their database. Keeping contact with customers is a good way to get repeat business and promote new products to the right people. There are many different ways that you can maintain contact and interest with different customers and potential customers.
Obviously, the cheapest way to create a customer database is to make your own! Products like Microsoft Excel or Access are capable of doing such tasks or you could purchase database software to install or use online such as Salesforce, an online database and support service. There are even free databases you can download, but be aware that they may not be reliable or meet your needs - especially if you have a larger company.
A problem that many companies run into is creating duplicate records or being disorganised. This often happens when too many people have access to the database and are continuingly updating it. Having one person who is in charge of database records is the best way to keep information organised and easily accessible. Allowing others to read the records is fine; just make sure that they do not alter anything! If you have the same customer listed 3 or 4 times within a database, and each mailer you send out costs £5, then you could end up wasting £20 for contacting one customer.
Don't have too many different databases. One database with a list of customers and potential customers takes the complications out of record management. A customer is a customer no matter how different they are from each other, so keep them listed in one file so their details are easy to access, locate and update. Customers like to think they have a one-on-one relationship with their suppliers / merchant. Keeping a record of all of your previous activities with each individual client can help you understand the way they operate and what they could expect from you in the future. Listing mistakes and errors that may have been made in previous transactions could be a business-saving strategy if you want to avoid future mishaps, especially with the same client.
Make sure you can sort all of your information into categories when you need too. This means being able to arrange data into groups - i.e. based on location or relevance. If you spend money on a good database program then this should be easy. You may wish to sort your data so that you can send out mailers, or generate lists ready for phone calls etc.
Always update your database. Never have old, outdated or invalid entries as this could cause confusion and be a waste of time and it could also be illegal. There is no point in sending out mailers or wasting phone calls on companies that have gone out of business or are untraceable. This not only wastes time, but can be a good way of losing money as well. Having endless lists of companies that may no longer exist or are irrelevant to your business is wasteful, so update on a regular basis and have a spring clean of your records once or twice a year. Keep all the records you have collected and ceased to use on a seperate system otherwise you could end up buying back the same information from a list broker when you decide to top up your database. Consider having an obsolete folder to retain all of these types of records.
Consider giving your potential customers some insight into your company. Information is extremely valuable and can attract new business but be careful about how much you tell people, as some things must be kept secret. A little taste of what goes on within the inner workings of your company can help people to understand what you do and who you are. A good way to do this is to send out a newsletter which is another way you can communicate to people, without disrupting them with phone calls during busy working hours. This may however generate a lot of negative interest from rival companies who just want to find out as much as possible about you and your future plans or investments.
Newsletters are a good way to update people with recent events, future plans and anything else you wish to convey on a regular or semi-regular basis. Some companies offer a subscription newsletter, which contains more information and a better insight into your company. Subscriptions are also a good way to gather information about other people and companies that you can add into your database.
Offering a demo or trial of your products(s) is the best way for potential customers to see what it is that you are really offering, how it works, how it is useful for them. Make is simple for them to understand and give them a chance to ‘play' or test your product, not only will this improve exposure but having people test on your behalf will give you vital feedback about your business or services.
Obtaining names for potential customers is extremely easy now, with companies who specialize in selling the information of individuals who wish to be contacted by relevant businesses. This costs money though, and sometimes-extra cash to spend is not always available. That's why it is important to keep records of all the people you have contact with and develop your own database. This doesn't happen overnight, but a company with many clients and contacts is worth a lot more! Also, good clients who are satisfied with your services might be willing to introduce potential future clients from their own contact lists. This is another way you can build up your business.
If you do decide to buy in data, different prices are generally set for different purposes - ie, you might pay £0.05 to mail someone, £0.10 to be allowed to mail and telephone but £1.00 if you want to own the data forever.
Ideally the more you know about potential customers, the better chance you have of targeting the right people. Collecting, as much information as possible is vital, so attracting people to your company who are willing to divulge information is what you want. Offering prizes or giveaways with annual competitions through an ezine or newsletter can do this. Remember that you don't have to offer amazing prizes, cars or holidays to attract people; a case of wine or something similar in value as an alternative (not everyone drinks!) will often be more than sufficient.
With your records stored and organized, implementing new strategies and campaigns should be quick and easy. Future plans can be modelled based on your results from previous projects and helping you to predict trends for sales and marketing. Loyalty is something you need to think about when compiling a database. Make a note of more loyal customers or keep them in a separate file within the database so you can differentiate between those who you may consider to be a regular customer and those who you can rely on in the future years.
The more information you have about a client, the easier it will be for you to target them and get results. Often cold calls lead nowhere and the person at the end of the phone will be less than cooperative. Buying lists of companies that may be interested in your line of businesses can be obtained from various sources, and can be extremely useful. These large databases are not always cheap, but they do list people who don't mind getting called from people with relevant business.
You will also need to ensure that you comply with the law. In the UK data should be kept up to date, relevant and only used for the purpose the customer intended or reasonably expect. You should also comply with government standards like the Payment Card Industry Data Security Standard (PCIDSS) to help maintain secure and legal data - information that Something 4 Ltd can help you with.
something 4 Ltd can help you organise and build your database and make sure you get the most out of building your list of potential and existing clients. We understand that the most important thing about developing a database is your relationship with clients and improve their experience with your company. Keeping data on all your and your clients' activities, complying with the law and we can aid you in the future for maintaining and increasing business.
