Over the last few decades, the most significant change to running a small business, has been the way we interact with customers. To the majority, marketing used to be almost exclusively about advertising, through broadcast or printed media channels. Other than retail, selling was done door-to-door or over the phone.
In the modern era, there are more communication channels than we really know what to do with. Display advertising and broadcast media still play a hugely significant part in the process but in todays world, there’s a lot more focus on two-way communication. That means listening to the customers and responding to their feedback.
Customer data has gone beyond being a strategic asset, a differentiator or just something that gives you a competitive edge. It is now essential to survive!
Often referred to these days as CRM (Customer Relationship Management), database marketing is really just about knowing who your customers are, on a larger scale than your average corner shop. This helps you develop a deeper relationship with customers rather than one-off transactions, so they want to come back, rather than look elsewhere. And on a basic level, it’s really rather easy.
It all starts with gathering information about you customers and prospects. This may simply be a name and postal or email address, or a detailed history and preferences for their purchases. It may be that you’ve purchased a list of prospective customers from third-party.
Once you have the customers or prospects and a channel to communicate with them, you can begin to do so in ways that are relevant to both you and them. There are many channels to choose from, including email, social media, phone, post or even in person.
Then you will begin to understand exactly who your customers are, so you can deliver the right message, using the most appropriate method, offering the most suitable product or service, to each one.
The first thing to establish is that a spreadsheet is not a database. If you already have your customer details in a spreadsheet such as MS Excel or Google Sheets, get them into a database as soon possible, to save a massive headache later on. But before you start, let’s establish what data you’re going to want to store. Take heed though, data processing legislation, which varies from country to country, generally frowns on organisations collecting and storing customer information that is not relevant to the relationship between them, so it’s best to avoid collecting anything that you’ll never need.
First up is the customers themselves. Are they individual consumers or businesses. You’ll need a record for each person that needs to be addressed, so if it’s businesses, you may need to record more than one person for each organisation.
This should include the details for every communication channel you may want to use. Even if you do not intend to communicate by post, it still better to collect an address, as this can used for segmenting and profiling, which we’ll cover later. Email addresses are almost essential these days but you may also want to consider collecting, telephone/mobile numbers, Twitter handles and other social media identities.
You can be as detailed as you need here but it can get messy. What’s most important is that you can adapt your approach from these preferences, so knowing that a person drinks tea in the afternoon is not nearly as useful as knowing that they prefer to receive offers by email, unless you’re running a beverage delivery service.
If you want to get really sophisticated, this should also include your communication history but at the very least, you should know what your customers have bought and when.
People change names, they change address, they change preferences. The same goes for businesses. You will need to make changes to your records and it is important to keep a record of what, when, where and how these changes have been made. This can save all sorts of problems, particularly if you start to use third party data for your customer acquisition.
Even though you may not possess a crystal ball or the gift of telepathy, it is still your responsibility to make sure your customer records are kept up-to-date. There are a number of companies offering services to help with this, from changes to the postcode, to identifying people who’ve died or changed address.
Archive inactive records, so that you can refer back to them if a customer returns. You may also want to refer to their transaction history when profiling your other customers. The delete button should be a last resort, only to be used when a customer record is so irrelevant that it is not worth the few bytes of storage that it occupies.
Above all else, maintaining your customer record is also an opportunity to reach out. If a customer has been inactive for some time, there’s no harm in anything has changed, just be sensitive in your approach.
Now you have your database set up, you can begin to take reap the benefits.
Choose your channel
The channels you use for your initial campaigns should be chosen wisely. Although your priority must be to attract new customers, you want to gain as much feedback as possible, so that you can adapt your approach for the next campaign. Some channels lend themselves better to encouraging feedback, such as telemarketing but this is an expensive root and not always popular. Other channels, such as display advertising, can generate no feedback what-so-ever. You will almost certainly have to use more than one channel but don’t try to spread yourself to thin. Stick to the ones you know best first, then you can experiment with other channels as you grow.
Fine tune your message
There are many ways your customers can respond to your marketing message, both negatively and positively. Whatever channel you have chosen, be sure to capture any and all feedback, it will help you to adapt your approach in future.
In an extreme, example, if you would sent an email with nothing but a picture of your product and a big Buy Now button, some recipients may indeed click on the button and buy your product. But it’s likely they would respond differently if you explained what the product was and how much it cost. he only way you will know which generates the most sales is to test both.
Measure your success
You should start with a sample of customers and keep track of their responses; emails opened, links clicked, etc. It doesn’t matter if you don’t have the skills or the resources to properly analyse all the data at this stage, when you reach the point when you do have that capability, you’ll appreciate all that historic information.
It’s a well-known fact that companies that make use of database marketing benefit from more repeat sales from a more loyal customer base, who demonstrate greater levels of satisfaction. This results in more efficient marketing campaign and ultimately a higher return on investment.
Database marketing can be as simple or as advanced as your needs and your budget dictates. There are many solutions available and many providers understand the specific needs of small businesses. If you’ve just started out but are expecting to grow substantially, look for a scalable solution, preferably one that allows a free trial. There’s nothing better than a personal recommendation, so ask around. You’ll be surprised at how some people can be about their favourite CRM system.