Daniel C. Felsted
From my experience, the greatest profit center many businesses have is right at your fingertips. This misunderstood and underutilized tool is your customer database.
Hidden in a database are your most valuable assets. Some of these are:
Your customer’s preferences—these are vitals that, if ignored, will lead to misunderstanding and loss of customers. On the other hand, if you utilize them, they can help you develop a lasting relationship with your customers.
Your customer’s history—by recording what your customers have purchased you have built added strength to this powerful tool. Herein lies the power to better predict what your customers will buy in the future.
Your customer’s future—by keeping careful records of your customer’s past actions you can predict their future habits. People are creatures of habit, and if you utilize the power of your database you will know what their habits are. You can capitalize on them and profit far more than if you do not understand their habits.
Your customer’s conversation—if you are not recording each conversation you have with your customers you are really missing out on a strength of your database.
Let’s say that your customer bought a new wrench for installing a new sink. If you recorded information from your conversation you could follow up on that installation. When the customer returns for some items for a new project, you enter their customer information and the comment window will show the conversation recorded in it. You inquire about the installation and trade some tips learned. You give this customer your card and tell him to call you if he has any problems with his current project.
Imagine how this customer will feel knowing that you remembered him and his problem. You will have done your best advertising at a cost of nearly nothing.
We often spend all of our time putting out fires and let the details fall through the cracks. By spending a few minutes recording the important gems learned about your customers you will be building your arsenal of powerful marketing tools. And after the initial set-up your database costs next to nothing to maintain.
Your customer will recognize your efforts and look forward to doing business with you in the future and frequent your shop more often too. This is another key marketing tool your business shouldn’t be without. It gives you mileage to your customers that money cannot buy.
Some other things you should consider including in your database are:
Surveys and questions—Ask one or two questions from your list (Don’t overwhelm them with questions). Use the power of your database to add this valuable information a few questions at a time and over time you will have gathered all the information you need. You will find that your customers will gladly answer a few questions.
Life Time Value—take the time to learn the lifetime value (LTV) of your customers. This is one of the most powerful tools of a database. The LTV can show you how much you can spend to get or keep a customer and still be profitable.
Rank you customers—assign a code (A, B, C, D, E, etc.) to your customer file. Rank the most profitable customers down to the least profitable customers. When you learn who these customers are, spend accordingly. Spend time bringing “B” customer up to “A” customer status. Reward “A” customers and extend loyalty.
Customer Hobbies—there are many ways this information can benefit your company. By knowing what they do with their purchases you can offer items that complement these products. By cross-selling items that are pertinent to your customers, you are reinforcing your relationship and building loyalty at the same time.
These are just a few ideas to incorporate into your customer database. By paying more attention to your customer database you will start to realize the valuable information stored in your database. The database should be one of the most important tools in your marketing arsenal. It can house valuable gems to keep you focused on drawing stronger profits from your current customer base.