Your best prospects for new business and charitable donations may be right under your thumb. In fact, they are probably grouped amongst your existing clients and donors. A few tips on how to “mine” your customer base to enhance your business and ensure customer loyalty.
“Walmart is coming!” While this pronouncement may send a shudder down the spines of retailers within the local community that a Walmart location is being planning, we can all certainly learn how to increase our business from America’s most successful retailer.
Walmart is a pioneer in the use of “data mining.” Mining for data is similar to mining for gold, because the finds can be highly rewarding. It differs in that instead of requiring backbreaking labor with heavy equipment, data mining can be done with a few well-placed key strokes on our computers. Data mining allows us to unlock valuable information contained within our own databases and customer files, helping us do more business with existing customers, and making them happier for doing that business with us.
We don’t even have to spend the millions that Walmart does, or even use all of their sophisticated techniques. You may already have the software you need in your existing database. In fact, in many cases, by studying individual invoices, you should be able to detect purchasing patterns.
Why is this so vital to your business’s growth?
You probably have customers with seasonal needs who place orders at certain times of the year. Data mining can make this information handier, so that you can time a special offer in advance of their next anticipated purchase. Same goes for donors in the world of fundraising. People tend to donate on yahrzeit’s or other important momentous occasions in their lives. Scheduling periodic reviews of your records will aid you immeasurably in finding new opportunities with your existing clients.
This brings us to one of the most important but overlooked topics in marketing. Segmentation.
One major advantage of segmentation is that it provides you with an analysis of your existing customers and categorizes them by groups. For example, if you are a financial advisor, you will want to group your clients by investment category. So, when you see a company whose shares are poised to rise, or that AAA insured tax-free bond that will allow your customers to sleep at night; time is then of the essence before the deal disappears. You will know exactly whom to call and what to offer.
If you are a storeowner, ideally, you would like to track the items that customers tend to buy in the same visit. Here too, we can look up to Walmart, who upon reviewing sales slips, found that male shoppers were showing up on Thursday nights to buy their weekend supplies of beer and diapers. (Maybe they should also start selling cholent!) They wisely moved these two items to adjacent displays.
Baltimore-based marketing analyst EJ Barry has some really powerful ideas on segmentation. You won’t find the following line in the Bill of Rights, but EJ Barry says it without mincing words. “Segmentation is based on the precept that not all customers are equal. Some can’t live without your product; others couldn’t care less. Some customers are highly profitable; others are only marginally profitable or even cost you money.”
Segmentation helps you identify potential based on recurring patterns. After all, history repeats itself. All businesses have seen marginal customers whose orders suddenly grew exponentially. There were probably some signs in advance that could have tipped us off. Wouldn’t it be nice to be aware of such “buy” signals to woo similar customers who display those same attributes? By the same token, customers who may be in the process of dropping a vendor, normally display warning signs. If we grouped those warning signs, and stayed alert for them, we might be able to prevent the loss of a good customer, or even nudge a troublesome or unprofitable one elsewhere. The start of another business year is an opportune time to mine our own businesses and dig up as many informational nuggets as possible. Sounds like it’s time to consult with a professional marketing firm who can advise your company on how to dig up the date – and more importantly – use the valuable data to grow your business.
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