Marketing with your database: ten FAQs

  1. What payoffs can I expect from using a database to improve my marketing?
  2. Can database marketing help me sell to business customers?
  3. Is the customer database I use for accounts and billing good enough for marketing?
  4. If I do need a specialist database system for marketing, what will it cost?
  5. What should I look for in a database system?
  6. What data will be most valuable for marketing purposes?
  7. What is the easiest way to compile a marketing database?
  8. How do I keep my data up-to-date and my list clear of clutter?
  9. How much will the Information Commissioner hinder my activities?
  10. Do I need to call in expert help to get good results from database marketing?

1. What payoffs can I expect from using a database to improve my marketing?

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 catch 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.

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

Of course it can. Segment your sales ledger into product areas, so that when you add new lines or services you can mail or phone only those customers that are most likely to be interested. This cuts out waste, saves time and avoids irritating those of your customers who have no use for the offer. It makes the targeted customers feel special and helps you get closer to them and understand their problems better.

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3. Is the customer database I use for accounts and billing good enough 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 the database, and they both require you to be able to manipulate your data and examine it from several different perspectives.

  1. By drawing up a profile of your best existing customers, and identifying their common characteristics, you can improve your ability to target businesses or individuals 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.
  2. By analysing purchase patterns, you can put together attractive packages and offer them to the right segments of your customer base.

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4. If I do need a specialist database system for marketing, what will it cost?

There are many straightforward databases that come bundled with office software packages. But if you looking for a stand-alone system the market leader is Microsoft Access, which currently costs around £120.

Specialised contact management database systems, such as Goldmine and Visual Foxpro (previously known as FoxPro), can cost several thousand pounds by the time they have been tuned, tweaked and adapted to your specific requirements. Fully purpose-built database packages can cost even more and take many months to design and implement. Find out as much as you can before taking the plunge.

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

Most smaller companies will be happy with Microsoft Access, which is a general purpose system, that gives you a very flexible relational database, with no pre-ordained relationships between one piece of data and another. With carefully framed questions, using 'ifs' and 'and/ors', you can view your data from many variables angles, so that it can be translated into useful marketing information. Because it is easy to use and has a comfortingly straightforward interface for those familiar with Word and Excel, you are not likely to incur any major training costs.

The step up to Visual Foxpro or Goldmine allows plenty of scope for customisation, but may make it necessary to introduce changes in user skills to allow your organisation to reap the full benefits.   

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6. What data will be 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.

  1. 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.
  2. 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.
  3. 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. For example, if you judge that your greatest prospect for doing business is with pig-breeders aged between 40 and 60 who live in the north-east of England and keep more than a hundred animals, you will know exactly what data you need.

If applying all these criteria proves to be too limiting, loosen some of your stipulations about age, geographical region or number of animals, taking care not to relax the criteria beyond the point needed to produce a big enough list for your purposes.

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7. What is the easiest way to compile a marketing database?

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

  1. Making lists from your customer records.
  2. Looking through trade directories or Yellow Pages.
  3. Picking the brains of your contacts to assemble the kind of lists you require.
  4. Running a competition for employees, with a prize for the biggest list of names.

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.

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8. How do I keep my data up-to-date and my list clear of clutter?

Clean, up-to-date records are essential, as a badly maintained list is generally unusable after two years. Spot-checking address lists by eye before you send out a mailing can be surprisingly quick and effective. You can also check the accuracy of your data using Royal Mail's Mailing List Audit tool.

Everyone with access to the database must understand that eradicating all spurious information is a high priority, as out-of-date or inaccurate entries will irritate your customers, waste money and look unprofessional. Get customers and others to help you keep your list clean, by printing a return address on your mailshots and encouraging the return of unwanted or misdirected mailing packs. This saves you wasting the cost of packs and postage next time you do a mailshot. 

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9. How much will the Information Commissioner hinder my activities?

If you hold personal records of customers, both computer held and manual, 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' themselves off your list. This applies to both mailshots and email campaigns. Full details are on the Information Commissioner's website.

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10. Do I need to call in expert help to get good results from database marketing?

Database marketing is not rocket science. It is a matter of common sense, the triumph of perspiration over inspiration. 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 the 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 into results.

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