After 15 years working as a Business Analyst and an IT Specialist, the most common question I get asked by business owners is what information should I store in my customer database. Up until five years ago, I would have given them the same answers most Business Analysts would give. It wasn’t until I decided to go into business and build my own company from scratch that I really began to get a much clearer picture on what we should be storing and the real reasons why.
I am certainly a great believer that all Managing Directors should in fact be required to build a business from scratch before being allowed to manage one, because from experience, it’s a lot harder than it looks. The key to success really boils down to one thing, how good is the information you have on your customers. It’s the customer information that you will use to make decisions as to what directions to take in your business.
Okay … so what information should we store?
If we look at our basic Customer Database for a small business the core information you want to store are things like the customers First Name, Last Name, Address, Suburb, State, Postcode, Country, Telephone Number, Email address, Date of Birth and so forth. I’ve put together a basic list below:
– First Name
– Middle Name
– Last Name
– Date of Birth
– Company Name
– Telephone Number
– Fax Number
– Mobile Number
– Email Address
– Postal Address
– Class of Customer (A Class, B Class, C Class, D Class)
– How they heard about us (eg Newspaper, Yellow Pages etc)
– The Date the Customer First Contacted You
– Enter the Customer Sales
– What was sold
– Date of Sale
– Customer Notes
– How many times a customer visits your website
If you are looking at buying an off the shelf customer database, you need to make sure that you can choose what information you can put into the database rather than being forced into putting dummy data in. Essentially what I mean, is that the database will let you put one or two pieces of information about the customer in, rather than having to enter every piece which you might not have. In reality you will find, and in particular on the web, that you may have to collect each piece of customer information over a period of time.
For example, if a customer visits your website, you might ask them if they would like to register for a free newsletter, to be sent by email. At this exact point, you would anticipate to get the maximum number of people giving you their details you might only ask the visitor for their First Name, Last Name and Email address. If you are interested in learning a range of techniques on how to get give customers confidence in giving you their details have a list to a set of interviews by a gentleman called Mr H. These interviews reveal some pretty switched on techniques to encourage your visitors to give you their information.
You will notice that I specified First Name and Last Name separately. There is a very good reason why I suggest this. Email marketing gurus will tell you that more people read your emails if you address the customer by their first name. By having their first and last names separately there is no chance of insulting the customer by using their last name.
Other fields like address, suburb, state, postcode, country provide very important information on helping you to work out where your visitors are coming from. They can also help you work out how to develop your products and services by helping you take into account specific regions and their cultures. For example, you may present information on a particular product to an Asian person differently than to a European. The presentation could vary dependent on the language and cultural issues.
This is also very important to consider when you are evaluating who is visiting your site. For example, if you had 50% of your traffic coming from another country then you would certainly need to consider developing your website to meet those cultural needs. If you didn’t collect your visitors’ information then you would certainly have no idea who was looking at your site.
Collecting the customers address details also gives you a lot more confidence in identifying where your customers are located. One of the reasons you may consider collecting their address details is to negotiate with your postal or freight company, the price for delivering your products to a certain region. For example, if I new that 40% of my product sales were in Thailand, I would then talk to my freight company on getting a special discount for sending a certain volume of traffic to that country. By the way, you can do this even for small volumes and by that I am talking 10 to 15 parcels a week. Just ask them, you can never tell unless you ask.
Some of the other key information you should be collecting is how they heard about you or your website. For example, if the customer found you from Google then you need to know that. If they found you from an obscure article you wrote then you need to know that. This information is going to become really important as it will help you to work out what advertising works, what doesn’t and what is most effective. For example, if you new that say a customer coming from Yahoo bought more from your store then you would definitely consider focusing your advertising dollar in that area. If you found though that visitors coming from Google’s PPC service gives you a better financial reward then you may consider investing more time in that arena.
The key thing about Customer databases is this, it’s about giving you real information that you can use to make more informed decisions. Personally, trying to run a business without a customer database is exactly the same as buying a lotto ticket.
The other cool thing about collecting the sales information, is that you can workout what products and services are selling and when. Quite often, people will find that their businesses are seasonal. My training business is no different. My team and I know that during tax time in Australia, our training business will be quiet but after that two month period we know we will be back working extremely hard.
The other key information you should be tracking is how often someone visits your website from the first time they visit. You need to know how many visits it takes before they will enter their information into your website, and then you need to know how long it takes before they buy from you. All this information is stored in the few fields I mentioned at the start of the article.
Sales people called what I mentioned before their Sales Ratio. Essentially it tells you how many people you have to get in front of, to make those all important sales. For example –
Newsletter Registerees: 1000
Full Registerees: 100
So if you know that it takes 10,000 visitors to get 10 sales, then you know the more visitors you get, the more sales you get. Knowing your sales ratio, will certainly make life a lot more comfortable and easier when you make the decision to purchase advertising or work out what traffic generation techniques work for you.
I should note also that you can get different sales ratios for different media or medium types. For example, you might find your sales ratio for say traffic generation via Google PPC (Pay-Per-Click) advertising is more effective than another.
The bottom line is, you must be collecting this customer information. The more customer intelligence you have, the more effectively you can service your customers.
One of the tools you will want to consider getting to know is how to use Microsoft Access. This tool is fantastic for doing the calculations I mentioned before. The really cool part about Microsoft Access is that once you have created a report once, you can keep reviewing the report with the latest data without have to keep recreating the report.
The final point I would like to make, is that it doesn’t matter whether you are running an Internet Business or a Bricks and Mortar Business you must be collecting information on your customers from the day you open. Without this information you will find it virtually impossible to run your business effectively.