How to Manage Your Customer Database
Your customer and prospect contact information, purchase history and response to your marketing is an important business asset that you need to carefully manage and keep up-to-date. Learn how.
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The direct mail industry also calls a customer database a "house list" or "house file".
Why it’s a good idea to establish and maintain a customer database
You'll be able to...
- contact existing customers to alert them about sales, new services or products
- identify customers who have not purchased in a while to reactivate
- target customers with relevant offers/promotions that will compliment what they've already bought from you (cross-sell). You can only do this if you track purchases in your database.
- conduct customer research and customer satisfaction surveys
- identify prospective and new customers to tailor direct mail offers to them
- rent or trade your direct mail list with other approved companies
- analyze who are your best customers to offer them premium services and offers
How to manage your customer database
1. Pay for a company to handle data cleaning
According to the US Post Office, lists deteriorate at 2% per month. That means 20 - 25% of the list has gone "bad" in a year's time. In the US, the Environmental Protection Agency estimates that 44% of junk mail is discarded without being opened or read, equaling four million tons of waste with 32% recovered for recycling. You can help the environment (and save your business money) by keeping your list up-to-date and focusing on targeting those people who will be most interested in your message + offer.
Paying to clean and update your customer database allows you to save money on postage and printing by keeping your customer data up-to-date and mailable. Data cleaning involves sending your customer file to a company will perform the following services:
- data consolidation and standardization
- NCOA: The National Change of Address
- DSF: The Delivery Sequence File
- LACS: The Locatable Address Conversion System
- CASS: Coding Accuracy Support System
- deceased processing
Who can help you with this?
Mailing Houses or Commercial Printers who offer these services
Find companies that offer these services on MarketingZone
- The US Post Office has a white pages directory to find companies that offer these services
- The DMA (Direct Marketing Association) also lists companies that offer these services
- Find companies that offer these services on MarketingZone
2. Segment your list
Keep a master file of your list. And then analyze your list to break it into smaller more targeted lists. For example, if you have a list of businesses that have purchased from you in the past, segment them by the number of employees they have. Different size businesses have different needs and should be contacted with different offers.
As you are deciding what data to collect and manage:
- Plan to be able to segment and sort your list. Keep a master file of your list. And then analyze your list to break it into smaller more targeted lists. For example, if you have a list of businesses that have purchased from you in the past, segment them by the number of employees they have. Different size businesses have different needs and should be contacted with different offers.
- To understand how you will use the data for tailoring messages and offers to different customers and prospects, read How to Create a Customer Contact Plan
3. Establish data-entry standards
So that you avoid duplicates, you'll want to decide upfront how to:
- Input things like "IBM" or "International Business Machines".
- How to handle customer files with almost similar addresses like “945 Arbor Road” and “945 Arbor Drive” that are both attached to the same person.
- You’ll want to establish written rules that can be used to train anyone doing data-entry for the database.
4. Establish a system to make sure each individual (and each business) has a unique customer identifier number in your database
Then attach all information about that customer to their specific record. This is essential for monitoring direct mail success in knowing who responded to what direct mail piece, offer, etc.
5. Enter data
- To create labels, direct mail lists need to be saved as Comma Separated Value (.CSV) or Tab Delimited (.txt) files with consistent column headers.
- Be sure to backup your customer database! You can do this with an online service or an external hard drive.
- Set up a way to protect the privacy of your customer database. You are responsible for maintaining your customer’s privacy.
6. Add new data to your database for customers and prospects
7. Keep your database up-to-date
- Train and reward customer-facing staff to update data as part of their daily routine.
- Allow customers access to their records on your web site so they can make changes (corrections and updates).
- Invest in cleaning and maintaining your list.
- Be sure to back-up your database daily and weekly. It’s a very valuable.
The best marketing articles, blog posts and reports from around the web
- Excellent practical tips on blog post by Amy Hawthorne on how to keep your database customer list clean
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