How you measure your marketing database can tell a lot about how you do marketing. If your focus is primarily on the size of the list, you’re probably heavily into e-mail marketing and driving impressions. With this focus, economies of scale are important because the more prospects that see the offer, the more opportunities for sales. On the other end of this spectrum are people who focus more on the data quality of the information in their database and how it can be used to profile, segment and qualify sales opportunities to improve conversion rates. Both strategies have their strengths and can produce results, but in most cases, a more balanced approach to data management is prudent.
Determining the appropriate balance between list size and list quality for your company is a critical factor in building a database management strategy. This will influence not only how you do marketing, but also your approach in dealing with customers and prospects. For instance, if you’re primarily targeting a very large group of customers, identifying new, potential prospects may not be an issue. Missing out on a single opportunity isn’t as critical. In this is the case, to drive sales you may choose to do more generic e-mail blasts, e-newsletters and online advertising to generate interest across a broader group.
On the other hand, if you’re targeting a very finite group of customers, new opportunities may be limited and thus, more valuable. These prospects should be targeted with offers that are more aligned with their specific interests and needs. As a result, you may choose to use more flexible communication elements such as tele-prospecting, direct mail and regional events to attract and educate prospects. The goal for this target group is to maximize each opportunity and increase the conversion rate.
Regardless of your approach, managing both the quality and size of your database is important because it is in a constant state of evolution and devolution. Without proper oversight, it will slowly deteriorate to the point of worthlessness. To prevent this from happening, consider the following lifecycle for managing your database.
Phase one is growth. Adding new contacts is essential to establishing your list, but also to maintain existing lists as prospects become customers or are eliminated as potential candidates.
Phase two is evaluation and profiling. At this stage, you want to learn as much about every individual prospect to better qualify and determine their likelihood to purchase. Additionally, with each new variable discovered, you have more opportunity to segment your database into groups of individuals or companies that share similar characteristics for targeting purposes.
Phase three is maturation. Contacts within a database will show tendencies to take action or not and you should build programs to encourage activity. Grouping individuals by their past responses is helpful in measuring their level of interest. It’s at this stage that you can better define customers by their potential to make a purchase.
The final stage is suppression. Eventually, a prospect that has shown no interest or activity over a specific period of time can no longer be considered a prospect. That doesn’t mean they should be deleted from your database. They should be removed from campaigns, particularly those that contain a variable costs. Continuing to target these individuals is fruitless and will significantly decrease your true marketing metrics. Doing this will also allow you to focus your energy on targeting prospects with an active interest in your solution that have a higher propensity to become customers.
Managing your databases size and quality in this way can help you better understand your pipeline as well as target individuals with the right type of information to move them through the buying process. This in turn will help you improve your conversion rate, which will result in higher sales and more productive marketing programs.