Using a customer database to grow your business
Learn how to collect information for a customer database, such as customer habits and product performance, to better serve each and every one of your customers.
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Hi. I'm Ashley Meyers for the Wells Fargo Business Insight Series. Today we're talking about how to use a customer database to grow your business. Joining me is Ramon Ray, editor of Smallbiztechnology.com. Thanks for joining me, Ramon.
Ashley, you are so welcome, and it's great to be here. Thank you.
I know that having a customer database can be helpful for turning one-time buyers into repeat customers. What kinds of information can you capture using a customer database?
Yeah, you're right. A customer database is extremely important, and I think that it's important to build a customer database for a few reasons and a few things that you can capture.
I think, one, you have your customer profiles and demographics. It's very important, Ashley, to know about your customers — what they want and what they're doing. Point two, I think it's important to know what those customers are buying and when they're buying it. Not just what they're buying, but also when they're buying it, times of day, and etc. The other thing that's important, Ashley, is what products are more successful than others. Maybe you're selling "widget A" when you should be selling "widget B." Maybe "widget C," though, is more profitable. Things like that. The other thing is, what about promotions and discounts? A lot of times actually small business owners give promotions and discounts and etc., however I think having that intelligence, to know what works, is important.
And I think overall, I've found that the database is one of the best tools to use to better serve customers before, during, and after the sale.
Wow, that seems like a lot of useful and important information. How can small business owners collect all of that data?
Yeah, it's a good question. And I think that what I find is that the customer database is really, it's an important, integral part of any small business's contact management information system, or contact management system. Or their customer relationship system, sometimes people call this CRM, customer relationship management. I think also, if you have a retail store, as many small businesses do, you can build that customer collection point right into the point of sales system, or cash register.
So here's a few things, Ashley, that I've found, some kind of ways to collect that information. One is email newsletters. You have an email newsletter database, and that's really one way to be able to provide that information to your customers. And I would dare say, as you send out the email newsletter, you can place links in the email newsletter that as people click on those links, you can track them, know what they're doing, and encourage them to even add more information about themselves. Point two, is kind of the geographic or location-based information. These databases, or components of your database are important, Ashley, because it's important to know what regions are doing well that you're selling in, and/or what other regions you may want to go into that are high growth opportunities and areas. Third thing I think that's important is your inventory. There's nothing worse than having a customer come to your online store, or come right to your point of sales system, and want to buy from you, and you don't have the product. So I think these are kind of three ways that small businesses and businesses in general can use.
I think some of the tools they can use include Excel, which many people use. But the problem, Ashley, with using Excel and some of the tools that are stored in your computer is just that. It's just stored on your computer, on a single computer. I'd advocate that small businesses use online databases. And online databases or what's called cloud computing, allow your data to be accessed anywhere by any authorized user. And most importantly, Ashley, you can share this database much more easily with your entire team.
It's great that business owners have so many options for gathering that information. Once you have your data, how can you use it?
One, it's important to be able to provide a personalized experience to each customer. Whether they're on the phone or online, that you can treat them as if they're the only one. Point two, what about knowing what products and services you may want to remove from your inventory or add to the inventory? Even based on the holiday: Valentine's Day, or Christmas or Hanukkah, whatever it may be. Point three, is what about launching a new business? So you can use your customer database to say you know what, we have demand in this area — and there's so many areas, Ashley — but the last thing I'd say is to have a better targeted advertising and marketing campaign.
And don't forget to also protect the data that you do collect, along with customer privacy in email communications. See the article, "Guarding against a data breach," and read up on the CAN-SPAM Act for more information. Thanks Ramon. This information is really helpful for understanding how a customer database can help a business grow.
You know, it's been fun, and it's been my pleasure to share with the Wells Fargo audience. Thank you.
And thank you for joining us for this segment of the Business Insight Series. To learn more about how Wells Fargo Business Banking can help you, visit wellsfargo.com/biz. In the meantime, we wish you continued success.