Database: Building Customer Relationships and Profits

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One of the differences between businesses that succeed and those that fail is how well they know their customers. Let’s take a look at Dell and Amazon.com as examples.
IBM recently sold it’s PC business to a Chinese company, HP merged with Compaq years ago and recently fired its CEO, Gateway bought eMachines and fired much of its senior management. Out of these vendors, with the largest market share of PC sales, Dell remains the ONLY profitable seller of business and consumer PCs. Why?
Via the power of its databases, Dell is able to know precisely who its customers are and what they want and anticipate customer demand. Other PC vendors simply cannot match Dell’s understanding of customers and sales.
People thought Amazon.com was a seller of books but now they know Amazon.com is so much more. Amazon.com is a company with a powerful customer database that happened to start off selling them books. Via the power of databases it has a vast profile of who its customers are and drives them to be repeat customers time and time again by catering to their needs one customer at time.
What about you? Are you leveraging databases to maximize profit for your business?
When customers buy from you, do you work so hard getting them to buy once, but neglect to continue to work at keeping them customers for life – repeat customers?
Here’s some ways you can use databases to help you know your customers and make better decisions related to products you sell and your business plan overall.
Email Newsletter Databases
I’d guess that your business has an email newsletter – which is good. But does your newsletter go beyond providing information to customers, with the simple hope that they’ll buy from you again? To maximize your newsletter’s subscriber database place strategic and track-able links in your newsletter content. For example, maybe in the next edition of “Fresh Apples Fresh Orchards This Week” you provide a link to articles on your web site about three things your customers can make with apples – apple pie, apple candy and apple Danish. By looking at the statistics of each article link you can see which item (pie, candy or Danish) was most popular with your audience. At the next holiday – you’ll know which item to concentrate sales towards. ** Email Newsletter Solutions: Constant Contact, Cooler Email **
Inventory Databases
For those of you with retail stores, I’m sure you’ve spent a lot of time and money on how your store looks, concern about getting more traffic into your store and wondering what inventory you should carry. One thing you might be overlooking is the strategic use of your inventory and sales data databases to increase profitability. As competition increases, it might be harder to get more customers, but there might be plenty of room to increase profits by empowering your cash register and profiting from the customers you already have.
Maybe you own an electric supply store and have one or more cash registers to handle sales. You THINK you know what products sell best and what products are more profitable, but only by enabling and analyzing the data in your inventory and sales will you know for sure. Inc columnist and serial entrepreneur relies on the power of databases in his businesses.
For example, Intuit’s QuickBooks Point of Sale (QBPOS) provides small businesses with a turnkey system to quickly track inventory and sales with each customer purchase. At the end of the week, you can print out detailed reports showing you customer and product data. Instead of wasting precious shelf space with under-performing products you can use your inventory and sales data to stock and give more visibility to items you find are selling fast and/or are more profitable to your business.
Sales + Geographic Databases
By analyzing the geographic distribution of customers and products you might find areas of opportunity for sales growth in new neighborhoods. Using a tool like Microsoft MapPoint and combining it with your customer and sales data can help you clearly see which sales territories you are doing well in and which sales territories you might consider canceling or reducing service to. Maybe you sell copy machines and your fiercest competitors are in zip codes 07854 and 07855. Via mapping software you realize that you are getting more business in another part of town. Mapping software can tell you not only WHERE sales are coming from but also the demographics of the area so you can get even better insight from your data. Without your sales databases overlaid with mapping software you might have missed this critical growth area in your community. You can now take this data and strategically a) launch new business in high growth areas b) scale down or shut down sales focus in a particular area c) target your advertising and marketing campaigns in a particular community.
Personalizing the Customer Experience
Your 10, 10,000 or 100,000 customers have unique needs.
I was watching some Little House on the Prairie movies with my family the other day and whoever walked into the local community store, the proprietor knew who they were and what they wanted. Although decades have passed since the days of Laura Ingles, customers still want to be treated special. Your database is THE tool to make sure this happens.
When customers arrive at a swanky hotel like the Ritz Carlton, it’s a powerful customer database that ensures they have certain kinds of pillows in their rooms and other personalized services.
Maybe you don’t own a hotel nor do you sell smoked bacon, gun powder and fresh eggs – but you might manufacture leather hand bags and accessories. When customers order from you – on the phone or online, your database can ensure that your phone sales representatives or e-commerce site provide a personalized experience to each customer. For example, May, customer Lisa orders 10 hand bags for her female swim students why not anticipate her order and send her an email or make a phone call offering her 20% off on leather coin purses. Be creative. Your database is a powerful tool for capturing individual preferences and buying patterns about your customers, which you can leverage into additional sales or just “extraordinary feats of customer service – which in the end will lead to additional sales.
Keep Your Data Clean
It is to remember to keep your data clean. The database will only be as useful as the correctness of the data you input. If you input incorrect information about a customer, then you will be SENDING them incorrect information or the sales person who talks to them will be referring to the customer with incorrect information. Data integrity is important.
In Conclusion
Databases are very powerful tools that are often underutilized, if used at all by many smaller businesses. There are MANY database solutions on the market and I would encourage you to talk to your local consultant, with expertise in databases about how you can strategically use databases to power your business.
Share your insight or ask questions here
Some useful database links are:
Intuit’s www.Quickbase.com
FileMaker www.FileMaker.com
http://www.Microsoft.com/Access
FrontRange’s Goldmine http://www.goldminesw.com
Best Software’s ACT! http://www.act.com
Maximizer www.Maximzer.com

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Ramon Ray, Editor & Technology Evangelist, Smallbiztechnology.com . Editor and Founder, Smart Hustle Magazine Full bio at http://www.ramonray.com . Check him out on Google Plus, Twitter or Facebook