“Although no marketing method is a sure bet, chances are terrific that some type of database marketing is going to work really well for your business.”
Whether you’re a partner in a consulting firm, a house painter, or president of an international conglomerate, database marketing can be crucial for your success.
Database marketing can be simple or sophisticated. The key is that instead of just having a mailing list of prospective customers or a single list of current customers, you use your computer to evaluate and manage the information more precisely. For example, you may want to send a reminder mailing to every customer at least once a year, send a monthly mailing to more active customers, and even place a phone call from time to time to your very best customers.
Tier Your Prospect Base
At Adams Media, we generated hundreds of thousands of dollars in revenue every year selling reference books to libraries at very little cost by almost exclusively using database marketing. Although there are tens of thousands of libraries in the country, we learned from experience that main public libraries with budgets over $25,000 were by far our best target customers. So we mailed to this relatively small group of just over 2,000 libraries six times a year. We mailed to less promising prospects, such as college libraries and branch libraries, just once a year. We also made follow-up phone calls to our very best prospects, including the largest library systems, and to previous customers who didn’t order the new annual editions.
This reflects a primary rule for database marketing: spend most of your money hitting your best customers repeatedly, but save a little to experiment with new target groups.
Use a Mix of Marketing Vehicles
Historically, database marketing relied overwhelmingly on direct mail. Then telemarketing became increasingly popular. And now, of course, the emphasis has shifted to email or social media.
Particularly for closing sales for higher-ticket goods or services, a combination of several different contact methods may work best. For example, you may first send a direct-mail piece to “warm up” a prospect and then phone to get an appointment where you try to close the sale in person. Or in a direct-mail piece or email you may refer the prospect to your website, or provide an email address where the prospect can get more information, without being pressured to talk to a salesperson just yet.
Fancy and Expensive Don’t Always Sell
Again and again, I’ve learned in direct-mail campaigns that fancy and expensive don’t always mean better results. Also, once you get into four-color printing, the start-up costs are high, so it is very expensive to test even small quantities. Make your mailing pieces professional and clean—but don’t go overboard. Generally, a one-page letter, a two- to four-page flyer with two colors at the most, and a business reply card are all you need for an effective mailing.
Avoid using mailing labels—address the envelopes yourself or have a mailing house do it by computer. Make sure you have a “call to action” in your letter, such as a free evaluation, a free gift, or a limited-time deep discount. Test all the variables in small quantity mailings, giving extra emphasis to testing different mailing lists and different offers.
You may be thinking, “Well, I am going to use email and social media for my database marketing, so why don’t I just bombard my customers with solicitations since it’s free?” Well, free still costs you. Every so-called free contact dilutes the impact you have on your customers and decreases the chance they will even open your email or pay attention to your social media. So carefully plan out your email and social media campaigns too. You want to make sure that your customers pay attention to your message.
TEST! TEST! TEST!
In database marketing, changing even a small variable can wildly change your results. So once a mailing works for you in test quantities, do the exact same mailing to the exact same mailing list in larger quantities.
When you do tests, isolate one variable at a time. For example, in a direct-mail test for our Adams Streetwise Small Business Start-Up software, I had three people write totally different letters, each of which we sent to two different magazine subscriber lists. We even included a snappy four-color flyer and a generous $10 rebate on a $40 software package. We carefully marked each response card so we could track sales. The results were easy to analyze. All six variants of the test produced almost identical results: nothing—a response of less than one-tenth of 1 percent, for a net loss of more than 90 percent of our costs. That’s why you always do test quantities first!
Takeaways You Can Use
- Database marketing doesn’t have to be complicated.
- Tier your prospect base.
- Mix your marketing vehicles.
- Fancy and expensive doesn’t always sell.