The old saying ‘A slice above the rest….’ is really a story about database marketing. Most successful businesses today understand that the value of a customer extends past the immediate sale. The term Life Time Value (LTV) refers to the value of over the lifetime of their relationship with you. Further, LTV differs by customer. So, golf aside for a moment, it makes sense to go for the better slice.
Besides, it’s a fact. On average, 80 percent of a company’s revenues and profits come from 20 percent of its customers. Do you know who your customers are and which ones are the best?
Truth is you can’t know your best customers or slice them into useful segments for targeting without creating a database. A properly built, maintained and segmented database acts as a power drive for “relationship” marketing – establishing a relationship with a customer that goes well beyond the first purchase.
While actual costs and statistics can vary, the American Marketing Association reports that database marketing consistently has one of the highest Returns on Investment (ROI) of all marketing methods. Why?
By sorting your database by customer type along with when and how often they buy, you can slice up and promote to the consumers you want most to reach –the top 20%, for example. Thus, you increase their Life Time Value and at much less expense.
The following links will take you to articles and tips containing useful resources for building and maintaining a customer database.
Intro to Strategic Database Marketing
http://www.small-biz-marketing-tips.com/strategic-database-marketing.html
The Customer Contact Database
http://www.small-biz-marketing-tips.com/customer-contact-database.html