Every company should keep information about current and potential customers in its database. It is important not only for defining the target group, but also for creating a successful marketing campaign. It allows you to approach each customer individually and offer them exactly what they are looking for.
Contacts can be collected in several ways, for example based on:
- orders,
- questionnaires,
- registrations,
- contests,
- customer complaints or inquiries,
- loyalty programs,
- warranty card,
- information about your customers,
- reviews,
- online analytics systems.
When creating your customer database, you need to be mindful of the data protection law applicable to individuals. Remember that:
- You must notify the Data Protection Authority that you will be maintaining a business database.
- You, as a customer information manager, are required to State the purpose to which personal data is to be processed, determine the means and how the data will be processed and, last but not least, to have consent from the customer.
- Consent is not needed if the data is necessary for the performance of a contract or data about customers who have already enquired about your goods or services.
- Customer information may be passed on to someone else provided that the customer has been informed in advance and the data will only be used for the purpose of offering you business and services.
- If the customer does not wish to have his/her personal information retained, he/she must express his/her opposition in writing.
- If the customer does not give written consent, you may send them postal trade offers. If it is an electronic offer, it must include an opt-out option.
The more information your database contains, the better. Logical sorting and regular updates are important. The database should include:
- Demographic information (age, gender, income, education, occupation…).
- Consumer buying behaviour (how, where, when, how often and what they buy, how much is their average spending, what is their reason for buying).
Information on why people buy from you will show you what customers consider to be the greatest added value of your product. You can then use these insights not only to come up with more imaginative campaigns, but also to identify new clients who already have the same requirements as your existing customers.
- Customer attitudes towards the brand (gathered from surveys, reviews, interviews…).
- Data on customer interaction with your website and social networks.
- All conversations between the customer and your company (their complaints, reviews, queries, as well as information on what communication channels you have used).
This allows you to compare their effectiveness and correlate them to the lifetime value of your customers.
An example of a company that effectively uses the transaction history of its customers is Amazon with its Market Basket Analysis. This looks at the connections between the products that customers buy. The analysis can help you with:
- Creating a recommendation and customization system ("Customers also bought…"),
- reaching customers with promotions for complementary items (dishwasher and dishwasher tablets),
- planning a marketing campaign for products that customers usually buy together (bread and butter),
- effective product placement on your website.
If you have a small number of contacts and are not demanding in terms of processing them, for example Excel or Outlook will suffice. With their help, you can organize simple email campaigns. But as your database grows, you need to move to more sophisticated systems. A quality business database is the basis for success, so it is not worth underestimating its selection. It should allow you to filter contacts according to specified criteria to make your targeting as accurate as possible. You may come across the following terms when selecting a suitable system:
- Customer relationship management systems, so-called. CRM systems (Customer relationship management systems manage contacts, segment them, monitor all communication with the customer, enable analysis, planning and creation of marketing campaigns and much more.
- Cloud databases, which allow access anywhere from the Internet.