building a database

In this article in his series addressing how retailers can generate more profitable business, Mike Court, managing director of business growth specialist Conexus International, highlights the importance of a customer database

Who do you sell to? Customers, of course, but how do you define a customer? It’s a safe bet that if you haven’t communicated with them for more than 90 days, you can’t truly consider them a customer. But do you have to lose them simply because they’ve not visited your store?

Independent electrical retailers tell me that it’s tough trading out there – people aren’t so willing to part with their money and online businesses are really damaging trade.

The market is changing – but it always will – so what are you doing to get customers to your store? Are you doing anything differently to last year?

By effectively using a customer database, independents have a huge opportunity to capitalise on their relationships with customers, plus getting behind product innovations such as DAB, HDTV, deep cleaners and the like, can really help drive your business.

But, what are you doing to bring customers to your store to see them?

Are you actively communicating with them? If they don’t want to visit your store, they won’t buy from you.

You do have a database – don’t you? A database that details what customers bought and what they could buy. A database with a contact name, address, phone number, email address and a profile of what type of customer they are. Even family groups are potential customers – such as teenagers. If you haven’t a customer database, start building one now.

Understand a little about marketing and you will understand how best to communicate with your customers. So define them by their buying habits and check this list to see if you can put realnames by the groups.

Innovators: Those taking risks with new technology. They don’t don’t care about budgets and want to be the first on the street with the latest trends/ technology. They represent around 2·5per cent of your customer base.

Early adopters: This group wants to be perceived as trend setters. It’s important you define and identify these people as they pay a premium price for the privilege of being first.

For independents, when it comes to selling fashionable/new products, this group is the most important to identify as they like showing off their new purchase to friends. They become your unpaid sales force and they represent around 13·5 per cent of your customers.

Early majority: These begin adopting new technologies, once proven. They represent 34 per cent of your customer database and if you know who they are, they’re a great sales opportunity. For selling new products/technology, your marketing should be geared to their requirements/motivations.

Late majority: Only purchase once technology is proven, the fashion established, price normalised. These form 34 per cent of your customer base. There’s little point wasting time/money/ effort in ‘cutting edge’ new product advertising to these people. They want security and value for money.

Laggards: Sixteen per cent of your customers, they have about as much interest in fashion/new technology as a polar bear has with a sunbed. They only buy when necessary. They will probably look to replace the product they bought 20 years ago with exactly the same model. There are niche opportunities with this group, but personally that’s not what I would be looking for right now.

Ensure you have a database. Start addressing your customers’ motivations and attract your past customers to come and see you again.