FOR SMALL BUSINESSES on a small budget a good database is a cost-effective marketing tool that can increase the sale value of your business and make you more attractive to partners who may want to conduct co-marketing activities.
- A two per cent increase in customer retention is equal to cutting costs by ten per cent
- Reducing lost customers by five per cent can increase profits by 25 to 125 per cent
- It’s up to five times more expensive to get new customers than it is to satisfy and retain existing customers
- Only one in 25 dissatisfied customers will express it, and
- Happy customers tell four to five others of their positive experience, while dissatisfied customers tell nine to 12 how bad it was.
The steps to creating and making the most of a customer database are to:
- Select the right database program
- Decide what information is relevant to store
- Populate, maintain and grow your database, and
- Regularly communicate with your database.
Get the right info. Use customer surveys, competitions and promotions to give you access to new prospects.
At any event you organise, sponsor or participate in, actively seek out contact details. Extend any invitations to friends of clients and remind them when you follow-up for RSVPs of any other events you are running yourself.
Using your database to increase sales from current customers is mainly about making them feel valuable. Make sure you follow up with a client after a purchase or completed project. Regular contact helps ensure that you are in constant conversation with customers and prospects increasing the likelihood of repeat purchases and referrals.
Your current customers are your most valuable resource for finding new ones. To generate referrals, you need to actively create them, not just through providing a great experience for your existing clients, but also through your systems. To do so, consider adding an annual survey to your marketing activity calendar and implementing a client loyalty or referral program. But don’t forget you must ALWAYS acknowledge a referral. Online services such as www.sendoutcards.com now make it very easy to create and send a thank you card.
So you’ve built a great database and set up a system to drive sales and referrals from it – but how do you measure success?
Keep an eye on:
- Traffic to your referral offer/page
- Repeat purchases
- Number of referral appointments
- Number of referral closed deals, and
- Overall comparative cost of acquisition.
You’ll know you’ve got a valuable asset on your hands once you look at the numbers!