Building a marketing database: tips for small businesses and start-ups

database marketing, build a marketing databaseGrow your online prospects with a marketing database

Building and maintaining a marketing database is an absolute essential for any successful business – small businesses and start-ups included.  A good database should be the cornerstone of  your marketing communications, enabling  you to open up better, and consequently more productive communications with your customers and prospective customers.  It will help you effectively target your marketing communications to your customers – be it to gain new business, engage,  cross-sell, upgrade, inform, entertain or create loyalty.

When you are just starting out creating a marketing database your primary focus should be centered around:

  1. capturing and gathering useful information about your customers and prospective customers
  2. getting permission from your existing and prospective customers to contact with further communications.

This permission-based approach enables you to target your communications appropriately to achieve better response.

“The permission marketing concept suggests that communications requested by customers have a greater impact and higher response rates than the many unsolicited communications which bombard us each day through print, mail and TV.” Dave Chaffey, Smart Insights

So where to start?

Database marketing has become so sophisticated (think Supermarket loyalty cards like TESCO’s Clubcard) that many small businesses and start-ups can be put off getting their database started. Worries over how  complex databases are to set up, the cost of sophisticated contact management software, concerns over outsourcing and maintenance can inhibit new businesses getting their database off the ground. However when you are just starting out you should just be focusing on what you need now and what you can afford.

There is absolutely nothing wrong with starting out with a simple excel spreadsheet. You can always decide to move to a more sophisticated contact management system or outsource to a database company at a later date. So don’t be put off building yours just because it isn’t going to be an all singing, all dancing database. Building a basic database with key customer information is still a worthwhile and cost-effective activity that will provide a solid foundation of prospects and customers for you to build upon as your business develops.

What information should you capture?

There is all sorts of interesting information you can capture about your customers, enabling you to learn more about their behaviour and needs. From basic demographics (age, gender, income) to  purchasing history such as products or services they have bought  from you or shown an interest in, lifestyle interests and so on. You can then use this data to segment your audience into related groups and target your communications more effectively.

However, when you are initially setting up your database focus on what information you actually need now.  This will depend on your business and what type of communications you are intending to send out – for example is it just email communications  or are you sending out direct mail promotions?  Spend some time deciding what customer information is going to be the most value to you. Basic  fields to start populating your database with  may include some or all of the following:

  • Email address
  • First name
  • Surname
  • Salutation
  • Job Title
  • Company name
  • Company Address
  • Home address
  • Mobile
  • Prospective customer / customer / lapsed customer
  • Date record was entered

 

How to encourage people to hand over their personal details and give you permission to contact them.

Once you’ve set up your database you need to think about how to get your customers and prospective customers to hand over personal information and give you permission to contact them with further communications. You may have a few loyal customers willing to pass over personal information just by asking for it, however the reality is that most people are only going to provide it if there is something in it for them.

The likelihood is that you’ll need to entice customers in with an incentive to reward for them for taking the time to handover their personal details. Long forms can be really off-putting so I would  suggest you consider focusing on getting their email address first – you can then get more detailed  information from them at a later date  – once you’ve built up more of a relationship.  If you need your customers to complete longer forms then think about an incentive that will motivate them to do so – of course you’ll get a higher uptake if you offer something relevant to your customer base and the industry you are in. For example:

  • 15% off plus free delivery and returns when you sign up to email newsletter
  • Download free whitepaper or ‘how to guide’
  • Free entry to a webinar
  • Free gift or e-voucher
  • Enter a competition

Quality data is worth its weight in gold so offering an attractive incentive is going to be cost-effective in the long-term.

Managing and maintaining your database

Having a up-to-date, useful database is essential. There is absolutely no point having a marketing database full of contacts who are completely disinterested in your business as not only will you annoy people by sending them irrelevant information, you are wasting money maintaining their records and skewing your response rates.

Keep your database clean, relevant and up to date and it will be far more efficient.

Make it easy for people to unsubscribe from your emails and make sure you remove them or suppress them from your database as soon as they request it.   Email database addresses decay by an average of 22.5% over a year  so this it important to keep information as up-to-date as possible. And of course the longer time goes on the more likelihood your data becomes inaccurate and this is when errors are most likely to occur.

And finally, don’t forget to make sure your are up-to-date on data protection laws, your contacts have opted-in and you are following good practice with regards to data privacy.

We’d love to hear your thoughts and experiences on this post, so please do leave a comment.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

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One thought on “Building a marketing database: tips for small businesses and start-ups

  1. Pingback: ShopIntegrator | Shopping cart security: How small online businesses must build customer confidence

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