| |
| |
|
Marketing Resource Center |
|
|
|
Benefits of Developing & Maintaining a Database
A database is more than a simple list of names and addresses. What turns a list into a database is the additional information, coupled with your ability to select names from or report on the list using any combination of data elements. In this report, you'll see some examples of the benefits of developing and maintaining a database. Then, the specific information that a database can contain will be detailed. By maintaining your list as a database, you can segment in many ways for targeting. Targeting improves the productivity of your offers. You can use a database to isolate the segment of your list most likely to respond to a particular offer. With a good database, you're not "mass-mailing" your offer to parts of your list that may have no interest in it (based on their characteristics). Because the number you're mailing is smaller, your response rate (number responding/number mailed) - one measure of productivity - should be higher. (And, of course, you'll save on printing and postage costs.) Here are two simple examples of targeting using database information: 1. You're the owner of a neighborhood beauty salon. For each customer, you keep a record (with dates) of all the services you've provided to that customer. You're planning a special pre-summer promotion on permanent waves for the month of May. Instead of mailing an announcement of the sale to your entire customer list (many of whom don't have their hair permed), you select only those customers who had a permanent at least three months ago. In this way, you're targeting those customers who are most likely to take advantage of your upcoming sale. 2. You're the dinner chairperson of a local fund-raising organization. Your mailing list is made up of a wide range of contributors, from those who've donated only a few dollars to those who give annual gifts of thousands of dollars. For each contributor, you maintain a record of all past donations and functions he/she has attended, in addition to basic mailing information. This year, you're asking for donations of $100 a plate for the annual dinner dance. To get the best response to your invitation, you first target those contributors who were at last year's dinner dance. Then you target those who weren't at the dance, but who donated more than $100 in the past year. Depending on the response you expect from these first two groups, you may next want to target those names on your list that didn't attend the last dance, but contributed $50 in the last year. You may even want to have a phone follow-up to the first two groups but use the mailing only for the third group. A properly set up database can provide many benefits for your business or organization. But the usefulness of a database depends entirely on what elements you include in it. Depending on your type of business or organization, you will want to include different fields in your database. Later in this report you will see some examples of the fields that are appropriate in specific instances. For all businesses or organizations, though, certain basic information is always necessary. By including basic information in your database, you ensure that the people or companies on your list are deliverable. That is, the mailings you produce using your list will get where you want them to go - into the hands of the individual who is most likely to respond to your offer. 1. Basic information for Business Audiences If your audience is made up of businesses, you will need to include the following fields for each name on your list: a. A unique account number. This number should not be tied into any other information about the customer, for example, phone number or address, since this sort of information may change over time. The account number should never change throughout the life of the customer. A sequential numbering system is simple and effective. b. Company name. c. Street Address. d. Suite number, is necessary e. P.O. Box, if necessary. f. City g. State h. Zip Code, five or nine digit. i. Phone number (with area code). j. Job title or name of contact. Some business mailers maintain the name of the individual within the customer's business or organization. Others simply use the appropriate job title. The alternative you choose will depend on the nature of your business and the amount of turnover associated with the position that is your contact. 2. Basic Information for Individual (Non-Business) Audiences If your audience is made up of individuals, you will need to include the following data for each name on the list: a. A unique account number. b. Individual's name. c. Street address or P.O. Box. d. Apartment number, is necessary. e. City. f. State. g. Zip Code, five or nine digit. h. Phone number (with area code). The basic information listed above is necessary to make sure that the names on your mailing list are mailable. But how do you decide which names are more productive? 3. Data Elements to Evaluate - Recency, Frequency and Monetary Value Regardless of whether you're mailing to businesses or individuals, there are three factors - recency, frequency and monetary value - that are commonly used to measure the value of a name. a. Recency: Recency refers to the last time that the customer ordered or responded to an offer. b. Frequency: Frequency is the number of orders or responses that the customer has made since becoming a customer (or during the last year or other specified time period). c. Monetary Value: The monetary value is the amount of money the customer has spent since becoming a customer (or during the last year or other specified time period). How do these three factors determine the value of a customer (the likelihood he/she will order again)? * The more recently a customer has ordered from you, the more likely he/she will be to respond to your next offer. * The more often a customer orders from you, the more likely he/she will be to respond to your next offer. * The more money a customer spends with you, the more likely he/she will be to respond to your next offer. All three factors - recency, frequency, and monetary value - are considered to be good indicators of whether or not a customer is likely to respond to a future offer. But they are not equal. Recency is thought to be the best indicator, followed by frequency and then monetary value. In order to use these valuable pieces of information, here are the specific fields you need to maintain on your database: * For recency: The date of the last transaction with the customer - the date of the customer's last order, purchase or donation. * For frequency: The dates of all previous transactions with the customer over a certain period of time. * For monetary value: The size (in dollars) of all of the customer's previous purchases or other transactions. (It is also common to maintain the dollar amount of the customer's most recent order as the monetary value indicator.) In addition to evaluating the recency, frequency, and monetary worth of your audience, you will probably find that there are many other important ways to analyze the names on your database. 4. Additional Information for Business Audiences If your audience is made up of businesses, there is additional descriptive information, some specific to your product or offer, that could be valuable to have. You might want to consider storing some of the following data elements for each of the names on your database: a. Number of employees in the business/organization. b. Type of business/organization. The United States Government four-digit coding system, the Standard Industrial Classification (SIC) system, is commonly used to identify businesses. For example, the codes 5211 through 5999 identify "Retailers." Within that category, 5411 is the code for "Grocery Stores," 5441 the number for "Candy, Nut and Confectionery Stores." The SIC Manual is available through the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. c. Annual sales volume. d. Credit status code The credit status code could be developed by you, based on the customer's payment history or perhaps obtained from a commercial credit report. e. Items ordered from you. With data in this file, you can select customer for programs designed to get them to reorder an item, or to order complimentary or supply items. f. Location. Is it a headquarters, subsidiary, branch, division, etc.? If you are making an offer that requires a decision by someone at the headquarters of a company, you may not want to send it to the branch office (unless there are employees involved in the decision too). g. Source of the name. This field is usually a code representing where you got the name. Assign a unique code for each referral program, publication advertisement, list, etc., you use to get a new name. Assigning a source code to each new customer allows you to evaluate the effectiveness of each technique you use to get customers or to collect prospect names. 5. Additional Information for Individual Audiences If your audience is made up of individuals, you may want to collect information on the household unit, often the most relevant purchasing unit. Here are some suggestions for demographic information that could be useful to you in analyzing the names on your mailing list. a. Household income. b. Occupations of household members. c. Number of people in the household. d. Ages of the members of the household. e. Genders of members of the household. f. Marital status of members of the household. * Type of living quarters. * Owned or rented living quarters. * Number, make, model, etc. of each automobile. * Number, make, model, etc. of each major appliance. h. Political affiliation. i. Hobbies and leisure time activities. Now you know the secrets of how a database can turn your mailing list into a valuable asset for your business or organization. You understand what basic fields to include. And you have had an overview of what additional fields might be added to the basic ones that make a list mailable. Be sure to carefully analyze your own needs and to include information that would be of help to you in mailing smarter. In report #3504, we will start explaining the details of how to go about collecting the names for your mailing list, starting with your customer list. Copyright 2004 by DeAnna Spencer Note to editors: This article may be redistributed freely on the Internet as long as the resource box remains intact.
MORE RESOURCES:
Marketing - Google News |
|
|
|
RELATED ARTICLES
Coupons that Work Turn a coupon into a business card (or vice versa).Coupons are seen everywhere; you clip them from the newspaper to save on groceries, you get them in the mail to save on brand name items, you even get packages in the form of booklets delivered to your door. Business Marketing Strategy The term business marketing strategy might sound like it is esoteric or stratospheric, so let's take the mystery out of it so you can devise and implement your own business marketing strategy that fits in to your small business plan.Strategy comes from a Greek word "stratagein" meaning "to be a general". Get FREE Web Tips From Your Competition I knew this one would get your attention. How can you, the savvy business entrepreneur, get FREE ANYTHING from your competition? The answer is simple: Google!Yes, there are many things that Google can solve. Build Lifelong Networks With Your Own Barter Group I don't know if you have ever seriously considered bartering. If you haven't considered it, it's probably about time that you did. Youre Halfway There!...Or Not Part 1 The year is almost over and the last half of this year will fly by just as fast as the first half.Are you on target for meeting your business goals for this year?If you answered yes, congratulations!Keep reading for ideas that will help you stay on track. Marketing to Success on a ZERO Budget TOP 10 TIPS TO GET YOU MARKETING TO SUCCESS ON ZERO DOLLARS!I come across so many people that absolutely freak out when they think about having to market their business. Heaps of questions come up like, 'Where do I start?', 'I hate selling', 'How do I market my business when I don't have any money?'?. Design Does Matter The idea that good design can improve how people perceive your business has long been a part of a designer's sales tools.They try to convince you that by improving your image, maybe creating a new logo or changing the way you communicate with your customers you can somehow improve sales and improve your bottom line. Why Great Companies Survey: Martian Logic! If an alien civilization from Mars was planning a friendly takeover of our planet they would seek to make sure they understood our way of life and our way of thought.The only way they could accomplish their objective would be by asking questions which they could genuinely understand and then plan a strategy accordingly. Down To The Wire When you want to win and woo new clients with national publicity -- and don't have an enormous budget to distribute your message -- turn to the news wires. But first, be sure you're telling a story that's worth printing. Marketing as a Spiritual Practice II: Unearthing Your Potential Marketing as we know it is over. Done. Money Making Real Estate Marketing Ideas Real estate marketing is a lot simpler than most Realtors make it out to be. Some equate expensive products and services with quality. At the Speed of Light How many times has someone you've called said, "Why don't you send me some information on your company"?Ask yourself, before you send anything: How will this be dealt with once it arrives at that person's desk. Aren't they already suffering from information overload? On the one hand, people say they they need more information in order to make the decision just to meet with you, let alone to agree to buy or hire. How To Bond With Customers So That They Stay With You Longer How many of your customers are loyal customers? More importantly do you know why they are loyal customers?Customer loyalty has been a buzz term in marketing for some time and with good reason. Estimates suggest it can cost 5 times as much to get a new customer as it does to keep an existing one. Chill Out With A Summer Time Marketing Plan Is your business experiencing a summer time slump? Traditionally only industries related to travel enjoy a boost in business during the warmer months. The rest of us tend to take vacations, clean up our desk and while away the time playing computer games while we wait for business to pick up. Words that Sell We all know the English language contains hundreds of thousands of words. But did you know that only 21 of them can easily sell your clients? Yes! It's true. Roping In Loyal Customers While Making An Extra Profit! You've probably bought a book or two at one of the major chain bookstores. When you're checking out, you get asked if you have the "discount card. Ten Ways to Market Your Business by Doing What You Love To Do Most business owners get so involved in the work of the business that there never seems to be enough time to do the necessary marketing. Even when business is good the owner must continue marketing because if he/she stops, the business eventually will stop too. Renting Your Mailing Lists to Others RESOLVING THE "PROPRIETARY" DILEMMA.. Multicultural Marketing - Taking Care of Business At Hand Multicultural marketing mirrors the changed face of America and is getting the attention of small-business and other organizations looking for an edge in diverse ethnic markets. "Gone are the days when businesses succeed with a 'one size fits all' approach to marketing. People Pleasing Postcards Why are more businesses turning to full-color postcards as a key form of promotion? The biggest reason is the simplest: You don't have to open a postcard. It won't get lumped in with all the direct mail envelopes that people toss without opening.
|
| home | site map | Advertising Articles |
| © 2006 |
