How To Write A Formula In Excel For If Then Direct Marketing Essentials – Know and Keep Your Customers by Using Your Database

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Direct Marketing Essentials – Know and Keep Your Customers by Using Your Database

So why is it necessary to keep a database at all? Here are just a few reasons:

  • Gives a complete picture of customers and potential customers
  • Increases the value of your customers by providing opportunities for up-selling and cross-selling
  • Allows you to match products and services to customers’ wishes and needs
  • It is the perfect tool to help you build relationships with your customers
  • Helps retain existing customers and acquire new customers
  • To give a common definition of a database, it is simply a way to store relevant data about your customers and prospects. It would only contain information that helps you maintain your relationship with existing customers by recording a history of interactions over time.
  • Databases should be designed and developed separately from your overall strategic plan. If you’re a small business, storing information in an Excel spreadsheet should be easy (just make sure you back it up on more than one computer or to an external hard drive).
  • Larger companies typically prefer an off-the-shelf or custom-built database system that can be customized to specific business requirements or easily integrated with other database systems in use, such as sales, finance, and operations.
  • Key aspects to keep in mind when planning your database are:
  • How you collect data
  • What type of analysis is performed
  • How to report data

Data collection

Be very careful when collecting customer information. If you sell consumer-based products, such as beer, asking for a customer’s job title is not relevant information. However, if you’re marketing a conference to a specific industry, this type of information is exactly what you’re looking for.

I’ve also learned that the more fields a customer has to fill out, the less likely they are to complete a transaction, whether it’s an email inquiry or purchasing a product online. So make sure you only collect as much information as you need.

In some cases, you may ask an additional question that may help you get a better understanding of the customer. For example, requesting a customer’s birthday can help you create a special birthday offer.

Collection of customer data on the Internet

Many companies today allow customers to update and manage their personal information through a secure page on their website. The benefits are significant when the customer essentially becomes a data operator. The company requires no manual entry and comes with lower administrative costs. The Internet simply enters the database directly in real time.

Fairfax Media is a great example where you can choose the online content you want to receive and it’s up to you to keep your address and contact details relevant. BPay is another good example of how customers can update their financial information in real time. If your credit card has expired, your transaction will not be processed until the new information is updated and approved by the transaction system.

Learning from a database – analysis and segmentation

Your business database is multi-dimensional, providing a wealth of information about your customers. You should be able to easily analyze and segment it while acquiring and retaining customers.

Data typically collected may include geographic information such as address information, demographic information such as age, marital status or number of children. While psychographic information typically includes more abstract characteristics such as interests and opinions.

A common example of database segmentation might involve analyzing geographic trends in your customers derived from the collection of address information. If you find that certain suburbs are buying from you, it may be beneficial to email those suburbs or offer a more personalized offer to your prospects, you can include a list brokerage company that specializes in customer intelligence. match your customer profiles.

There is usually a $250 set-up fee to rent a list for a one-time use, then databases can cost $300-$500 per thousand depending on how accurate the data is, who owns it, and how much customer information you’re requesting (e.g. email messages). and mail).

Remember that a rented list is only a one-dimensional database and is more often used to test your database, usually in acquisition marketing campaigns.

Financial Data – A Simple Guide to Analyzing RFM Transactions

When assessing your customers’ past buying behavior, you need to know three principles that provide key information about your customer’s past buying habits. These are:

  • Recent
  • Frequency
  • Financial

Obviously the acronym is: RFM

Recent is the most predictive tool that allows you to document your most recent purchase or social activity.

One general assumption might be that newer customers are the most likely to buy from you again. In this case, you should select customers by their last purchase date and then contact everyone when they are at the end of their purchase cycle.

Frequency shows the number of purchases during a specified period or time period.

If a customer likes your products, they are likely to buy from you again. In this case, you would communicate with your customer on a regular basis, perhaps signing them up for email newsletters. It’s a great way to send custom product information, new sales, or new product information, and even offers an additional up/cross-sell opportunity.

Financial is the total cost incurred by the customer during the same period of time.

Customers who spend a lot of money may do so again, whether over a period of time or as a one-off. In this case, a special offer may be the best way to attract that customer again.

In summary

Essentially, the most valuable customers are those who rate highly on all three (RFM) criteria. By measuring past purchasing behavior, it allows predicting future behavior, with accuracy being an important component of database predictability. That’s why the old cliché “it’s cheaper to keep an existing customer than to find a new one” is really true. Besides, it just makes good business sense to know your old customers.

To illustrate the power of retaining old customers, I would like to give an example of how to win back customers in the retail industry. This could potentially be applied to any retailer such as apparel, automobiles, or sporting goods.

Basically, every retail classification has a repeat sales ratio. In the clothing business, the relationship is usually three to six months, as buyers tend to buy according to the season. For cars, you can be renewed every 3 years or when the next model is available. Based on the repeat ratio, each retailer has a built-in “opposite horizon” where the customer is lost to the competition if they are not reactivated within a given period of time. (Claude A Johnson, Winning Customers Through Database Marketing).

So, using the valuable RFM information in your database, you can select customers who have not purchased from the store within a specified time period. From there, you can target the customers who spent a lot of money with you and were the most valuable to the business. (It’s always a good idea to focus on your top 20% customers as they always provide a higher ROI).

An offer could include sending a personalized letter directly from the business owner saying, “It’s been a while since I’ve seen you. I invite you to visit our store to check out our new range of branded products”. A personalized voucher can be attached to the letter, giving a 20% discount on every purchase. You may very well question how successful a marketing campaign targeting an inactive customer could be. The answer is very successful.

Campaign history reporting

One of the most powerful benefits of database marketing is the ability to measure the results of each advertising campaign or event. Unlike other advertising mediums, there is no guesswork involved.

However, many companies fail to record their campaign history. Response and conversion rates provide evidence of marketing success and failure, and also allow you to test the results of campaign elements. But I’ll talk about this in more detail in my next blog about easy ways to test, measure and record your marketing efforts.

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