"While 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."
Database Marketing Is For Everyone!
Whether you're a partner in a consulting firm, a house painter,
or president of an international conglomerate, database marketing
is 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 can use a computer to evaluate
and manage the information more precisely.
For example, you may want to send a reminder mailing to every customer
once a year; 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
We generate hundreds of thousands of dollars in revenue every year
selling reference books to libraries at very little cost by almost
exclusively using database marketing.
While there are tens of thousands of libraries in the country,
we have learned from experience that main public libraries with
budgets over $25,000 are by far our best target customers. So we
mail to this relatively small group of just over two thousand libraries,
six times a year.
Less promising prospects, like college libraries and branch libraries,
we mail to just once a year.
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.
We also make follow-up phone calls to our very best prospects like
the largest library systems and to previous customers who didn't
order this year.
Use A Mix Of Marketing Vehicles
Historically, database marketing relied overwhelmingly on direct
mail. Then increasingly telemarketing has been used. And now there
are a slew of alternatives to consider, including e-mail, fax, and
the World Wide Web. Be cautious of legal restrictions that in the
U.S. prohibit companies from sending unsolicited faxes to people
or companies with whom they don't have a business relationship.
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 you may refer the prospect to a World
Wide Web site, a fax-back number, or an e-mail address where the
prospect can get more information without hesitating because they
don't want to talk to a salesperson just yet.
Fancy And Expensive Doesn't Always Sell!
Again and again, I've learned in direct-mail campaigns that fancy
and expensive doesn'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--like
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.
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 last summer 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 1/10 of 1 percent for a net loss
of over 90 percent of our costs. That's why you always do test quantities
first!
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