How to Use Databases More Effectively

Getting the most from your database

A well-maintained and efficient database can be real asset to a micro-business, so long as it is used effectively. This article explores some of the uses a micro-business might have for a database.

Profiling Existing Customers

Do you know the most profitable type of customer for your micro-business? Profiling can give you that knowledge and involves looking at customers to identify common characteristics between them. For example, perhaps they all work in a specific type of industry, or spend a particular amount, or use your products for a specific purpose.

This knowledge can help a micro-business find new customers by creating marketing activities targeted at that type of industry or promoting that type of usage. It may also help them to adapt and tailor their products, based on what they are actually being used for. This is one of the key principles of using a segmentation approach to enhance your marketing, which you can read more about in Segmenting a Customer Base.

Keeping in Touch

It’s very tempting to focus on getting the next sale, but it’s often easier and cheaper to sell to existing customers. This is explored further in Managing Existing Customers.

Communicating with existing customers regularly encourages them to buy from you, or reminds them that you exist, or might even lead to referrals to potential new customers.

Send out regular direct mailing pieces to your customer list, or a regular email newsletter with special offers and company news. In fact, anything that reminds the customer list that you still exist. If they know you exist, trust you to deliver on your promises and provide goods and services that they actually want, you’ll never be short of sales.

But you can only keep in touch with them if you have a database of some kind.

Increasing Efficiency

How much time does your micro-business waste trying to find customer or supplier information? Keep everything in an easily accessible database so you don’t have to spend so long looking for it.

Finding Sales Opportunities

Profiling enables you to identify what attractive customers look like. Imagine that you’ve discovered that a company of a certain size uses one of your products in a particular way. Why not contact other customers of that size who do not have the product and try to sell it to them by highlighting that they could use it for that purpose?

Alternatively, there might be customers who have the product but do not use it as often as you might like. Write to them and suggest they use it differently and see if the usage figures increase. An example of this you may have seen in general advertising recently is Philadelphia Cheese, which seems to have relaunched as a cooking ingredient.

Disadvantages of a Database

To be honest, there aren’t really any disadvantages, but there are a couple of significant considerations, namely technical knowledge and cost.

Efficient databases are invariably computer-based so you will need to have some comfort in using them. This may worry confirmed techno-phobes but it doesn’t have to be complex, an extremely useful database can be created from Microsoft Excel. But you might need to be willing consider a training course in your chosen system to get the most out of it.

There are two aspects to cost; purchase costs if you need something new, and the time spent on it. There should be a direct link between the amount of time spent on it and the benefits you derive from it. Remember though that you’ll need to allow time for learning to use the system and initial set-up, as well as committing to regular management and maintenance of it.

If you’re ready to start using a database then read Does a Micro-business Need a Database? for some of the essential things you need to know and Database Content and Management to see how to keep it up-to-date.