Marketing with your database FAQs

White database with marketing information written on them

Ten FAQs on marketing with your database.

1. What are the benefits of using a marketing database?

Small firms need to concentrate on exploiting niches that are either too small and specialised for the big boys, or too new for a cumbersome large firm to have caught on to.

A good database should isolate and capture vital details about customers and prospects, enabling better targeted offers to be made. It's called profiling.

What the database is letting you do is draw up a profile of the target customer who is most likely to respond to the offer you are making. You can then sell positively to this customer, and all the others you can identify as having similar characteristics, highlighting the benefits and appeal of your product.

This gets you out of the dangerous territory where you have to sell on price, at minimal margins, and lets you market your product or service to a potentially receptive audience.

2. Can database marketing help me sell to business customers?

Absolutely. Segment your sales ledger into product areas, so that when you add new lines or services you can contact only those customers that are most likely to be interested. This cuts out waste, saves time and avoids irritating any customers who have no use for the offer.

It also makes the targeted customers feel special, and helps you get closer to them and understand their problems better.

3. Can I use my accounts and billing database for marketing?

Your ordinary accounts database is unlikely to provide the flexibility you want for sophisticated marketing operations.

There are two main advantages you can derive from using a marketing database, and they both require you to be able to manipulate your data and examine it from several different perspectives:

By drawing up a profile of your best existing customers, and identifying their common characteristics, you can improve your ability to target prospects that fit the same profile. This will help you choose the right media for your advertising, and the right mailing lists if you are renting names for mailshots or email campaigns.
By analysing purchase patterns, you can put together attractive packages and offer them to the right segments of your customer base.

4. How much does a marketing database system cost?

There are many straightforward databases that come bundled with office software packages. Specialised contact management database systems can cost several thousand pounds by the time they have been adapted to your requirements.

5. What should I look for in a marketing database system?

Most smaller companies will be happy with a product like Microsoft Access, a general purpose system that gives you a flexible relational database, with no pre-set relationships between one piece of data and another.

With carefully framed questions, using 'ifs' and 'and/ors', you can sort your data by many variables, so that it can be translated into useful marketing information. Because it is easy to use and has a straightforward interface for those familiar with Word and Excel, you are not likely to incur any major training costs.

The step up to a more sophisticated customer relationship management (CRM) system allows plenty of scope for customisation, but it's likely you will have to invest in staff training to reap the full benefits.

6. What data is most valuable for marketing purposes?

The most valuable type of information is data that matches the profiles of your most promising sales targets. While there may be a great range of possibilities here, these criteria can usually be grouped under three main headings.

What do you sell or want to sell? This can be defined by common name, type, quality, range, frequency, quantity, pack size and so on.
What type of person might buy it from you? This can be seen in terms of job title, age group, lifestyle, sex, socio-economic group, interest group or even whether they are quick payers.
What motivates buyers? This covers what benefits they seek and what price will persuade them. What are their attitudes to new ideas, what do they think of you, what kind of relationship do they have with you?

You may, of course, be looking for a combination of several of these factors.

7. How can I compile a good marketing database?

Inexpensive ways to go about setting up a database from scratch include:

making lists from your customer records;
looking through trade and online directories;
picking the brains of your contacts to assemble the kind of lists you require;
buying a list.

Confirming the quality of the information in your list can be a problem. However, if you take a small random sample from your list (say 5-10%) and check it for accuracy, you can be reasonably confident that whatever you find will apply to the remainder.

You can also extend this test process by conducting a marketing exercise with the same sample group. All being well, the results will confirm that your data and your marketing method are in line with your objectives.

8. How do I keep my marketing database up to date?

Clean, up-to-date records are essential, as a badly maintained list is generally unusable after two years of neglect.

Everyone with access to the database must understand that eradicating all incorrect or outdated data is a high priority, as marketing activities based on out-of-date or inaccurate information will irritate your customers, waste money and look unprofessional.

9. Do I need to register with the Information Commissioner?

If you hold personal records of customers, whether on a computer or on paper, you must register with the Information Commissioner.

You must ask prospects whether they wish to receive 'further mailings of interest' and give them the opportunity to unsubscribe. This applies to both mailshots and email campaigns.

Full details are on the Information Commissioner's website.

10. Should I get help from a marketing database expert?

Database marketing is not rocket science - it is a matter of common sense. Unless you are really short of time or resources, it could be a good idea to first see how you get on by yourself. If it doesn't work out, your fallback plan can be to call in outside help.

Expert support rarely comes cheap. That said, a good consultant will have knowledge that can open doors for you and save a huge amount of time.

Always shop around and invite two or three potential providers to respond to the same brief before weighing up which you would sooner work with. You could also ask if the consultant's fee could be linked to results.