THE DATA BASE DASH:
The computer database has long been used by financial institutions to weed out the high-risk consumer, target the most desirable prospects and keep a pertinent profile of the latter. Today, the value of the data base has become even more apparent as more and more companies achieve increased cost effectiveness and profitability by using it to keep more detailed information on customers in order to maintain and expand customer relationships.
Leading marketing departments have data bases that not only list a customer’s name, address and type of account, but in the case of banks, include salary range, size of deposit, average balances, types of credit cards, information on home ownership, even age and family size. Such a database allows a company to target a market segment based on need, rather than sending the same message to all customers. Furthermore, it increases effectiveness by elimination of mail to customers where the product or service does not apply. For example, it’s not unusual for non-home owners to receive mail advertising home loans from their own banks. Maximizing efficiency maximizes cross-selling opportunities.
With a data base, businesses are able to obtain demographic information on their customers that is relayed to the sales staff; establish a list of potential high-risk customers, numerically rate a group of prospects by their likelihood of responding to a certain product offer and keep a customer information file to manage attrition. Perhaps the strongest attribute of a marketing database is that it holds information critical in retaining customers.
“A data base is a powerful marketing tool,” said Doug Farber, vice president of Penny/Ohlmann/Neiman’s Direct Marketing Division. “In the case of a bank, for example, information is gathered that helps bank executives better discern the individual needs of customers. When bank customers are satisfied with services, they tend to remain loyal to that particular bank. And ultimately, that’s the bottom line in establishing a marketing database in any type of business – keeping the customers you already have.”
P/O/N advises large corporations and growing businesses to re-evaluate their current selling techniques and consider building a separate marketing database on current customers. The investment will pay real dividends.