Who exactly is your customer? This is one question many small businesses struggle to answer. What age are they? Where do they come from? What are their characteristics & lifestyles? These are all fairly easy questions to answer, if you have a database.
The Importance of a Database
When someone enquires about your products/services via email, Facebook, your website or any other channel you’ll naturally respond to those people using the channel they made the enquiry from. You’re correct to respond to your customers using the channel they use, but it’s also important to collect as much information as possible about each individual person or company. If they phone you then ask for their email address, if they email you ask for their Facebook profiles. If you want to know who your customers are, then you must collect as much relevant details as possible so you can begin to understand exactly who your target market is. When I see an advert with only a phone number, it’s dead. Unless I need to call that company immediately their potential to sell to me has been lost. If that advert had a Facebook page, a website or email address then I can make an enquiry in my own time.
The importance of capturing as much information as possible about your customers is essential to ensure future marketing activities are more relevant to the people who’re receiving them. With a richly populated database you will be able to understand:
• How much it’s cost you to generate a lead (Cost Per Lead)
• Cost Per Sale
• Conversion Ratios – Enquiries to Sales
• Customer trends & habits
• Your typical customer location
• Your typical customer demographics
• The typical lifestyles your customers share
Measurement & Segmentation
Measuring the effectiveness & ROI of your marketing efforts cannot be achieved unless you capture, store and utilise the information from your database. There’s no point in having details about your customers in a range of locations like a diary, email list, pieces of paper and social media accounts. Your customer details must be in one place so they’re easily accessible for speed and accuracy with the ability to collate and measure that data. From here you can target smaller segments of customers based on a range of variables and tailor marketing communications to those smaller more unique groups of people. See – Why Small Is Good in Segmentation.
What database do I use? Good question to ask. There are a multitude of database options available for small businesses and using Microsoft Excel or Access is a good place to start. Once your database and company begins to grow then you might consider upgrading to paying for CRM (Customer Relationship Management) systems which will incorporate all your back office processes. CRM systems are advantageous over the likes of Excel & Access with superior capabilities, but it would be advisable to use simple free databases in the early stages of your business and reconsider your database options as you experience growth.
Don’t underestimate the importance and power of the database to your business, because from here you will truly be able to understand exactly who your customers are and how to reach them.