o Enquiry method – by email, fax, mail …

o Advert/mailer code – your secret code

o Date Purchased/Enquired and if purchased …

o Purchase Price & quantity

o Cost of goods – your hard cost excluding overheads

o Gross Margin – calculated from above

If you can get more information such as the type of business, their size, additional contact names … so much the better. If not try & get it later so you can use the customer’s profile in a targeted mailer.

Now that you’ve captured the customer details you can analyse your results without effort. And get answers to the questions posed above and many more. So you can continue to do and even improve on what works and stop doing what doesn’t.

If you offer a Money Back Guarantee - and you should – you will get some returns. So you’ll need to cater for this in your database design so you can analyse returns by marketing reference.

A higher than usual number of returns, (as a rough guide - over 10%), may reveal that your advert/mailer promises more than your product delivers. If so you can look to improve your fulfilment package.

You’ll need to include a check on returns when you mail your customers with a new offer. Rather than ignore them they need to be treated differently.

For instance you may have an updated version of your product that you want to reveal to previous purchasers for whom the old product did not suit.

Alternatively – you may decide not to contact these customers again but retain the information in your database for your marketing analysis. If so you’ll need a "do not contact" field in your database. And make sure you test for this whenever you do an extract for your mail merge.

And if someone asks to be removed from your mailing list it’s essential that you do so. Otherwise you risk causing offence and that’s not good for your image. And you’re also wasting money on postage & stationery.

This is particularly important with Email – otherwise you risk being treated as Spam. So never Email anyone without their permission unless of course they’re responding to an enquiry. Then you can offer them the opportunity to receive more information from you by Email and build up your list that way.

Marketing by Email to your list is the most economical method possible. However it’s not necessarily the most productive.

Testing has established that "snail mail" produces a greater response. But of course it costs more.

Even if a mailer is working well for you - possibly the results are amazing - don’t assume that this is the best you can do. Continue with it of course – it’s your "control" and at the same time try varying one thing.

Start with the headline - apart from the list itself it’s the singular most important element in your mailer or advert. Then - try your special offer, bonus, price … Then mail both mailers simultaneously to different prospects from your mailing list.

By tracking every response using the two marketing codes you can analyse the results with your database software.

You may be surprised by what you find – a seemingly whacky idea or just a small change may outsell your control piece. Even dramatically so.

Remember – when you test one mailer against another only vary one thing at a time. Change the price or the headline … but only one item otherwise the test is meaningless.

Testing should be continuous. Even your best advert will eventually tail off. Don’t wait until it does because then you’ll suffer a decline in sales whilst you’re testing a new advert or mailer. And this may take some time.

Using your database it’s easy to perform a price comparison analysis. You may find that a higher priced product or service outsells the same item at a lower price. Even if it doesn’t your database will tell you which price gave you the highest profit.

Consider …

Mailer 1 results in 10 sales at £99 each of product x giving a gross margin of £700

Mailer 2 results in 12 sales at £149 each of product x giving a gross margin of £1,788

Mailer 3 results in 9 sales at £219 each of product x giving a gross margin of £1,971

These figures are of course fictitious. But they’re not untypical. The reader’s view of your product may be coloured by the price you’re charging.

He may measure your product’s quality by the price you charge. And the £99 price may give the impression your product is cheap rather than inexpensive. It’s a reason why if you offer a bronze, silver & gold service most customers choose "silver".

Only by testing can you determine the best mailer or advert. After all it doesn’t matter what you think, or your colleague or partner thinks. Only the reader’s view matters. She decides whether to buy your product or not.

So at first glance Mailer 3 looks the best option to go with as it gives you the highest gross margin. If you’re after a one off sale of a high priced item then it probably is.

If though you offer a range of products & services your back end sales are more important to you. So Mailer 2 could be the best as it brings you more customers.

It all depends upon the Average Life Time Value of your customers.

Your back end sales are typically of two types …

You have a range of products/services that you can offer to a new customer at the point of sale and by subsequent mailers.

Your product is a consumable and you encourage your customers to repeat order. Possibly by enrolling each new customer in a preferred customer club that offers discounts on future purchases.

Your database can tell you your ALTV in an instant – provided you’ve entered the details of each sale for every single one of your customers.

Breaking even or worse on an advert or mailer can easily prove to be a real success through your back end offers.

Don’t make the mistake though of confusing apples & pears. If your business has two or more distinct product or customer categories then treat each one separately when calculating your ALTV.

It may take you a few months or even a full twelve months before you have sufficient buying history to give you an accurate figure. But every month gives you more information to analyse.

So are you starting to see how using a direct response marketing database can boost your profits? Good we’ll move on.

Let’s assume you’ve now got an established customer base complete with buying history in your database - And have a new product to offer.

Imagine the effect on your profitability if you could extract a list of customers likely to be interested in a new product or service and do a mail merge immediately. Then track the responses to your mailer customer by customer.

And be selective in your follow up mailer – using the saved list – and track the response to that too.

It’s easy with a marketing database. You simply select a list of customers who previously purchased a related product or service or customers of a specified industry or geographical area or demographic category …

Then you do a mail merge with your offer letter or email and save your database list so you can do a follow up a week or two later.

Simply targeting your offer results in …

Lower mailing costs so increased gross margin

Increased sales – you can refer to a previous purchase or expressed interest in your mailer

Little risk of offending your customers by mailing offers irrelevant to them

Using your database you can keep track of your mailers too …

As each letter is generated by the mail merge a record is kept in your database so you’ll know at any time in the future which customers received a particular mailer. And importantly - those who responded and those who didn’t.

A list enables you to manage your Multi-step sequential marketing. It’s almost impossible without a database designed for the purpose. So you can execute stage 2, 3 … knowing those prospects who responded to the previous stages & those who haven’t – yet.

All too often you may have given up on a list because it was just too difficult to implement a multi-step process. If so, you’ll have a sneaky feeling of the amount of sales you’ve missed.

You can extend the list concept to "what if scenarios".

Produce a list of customers or prospects that fit a particular profile. Then review the numbers and if they’re significant try and match a product to the list.

All too often you can be product orientated and forget that your customer is only interested in benefits. Their profile often determines what they’ll be interested in. And if you get really good at it you can even predict their needs before they realise it themselves!

Whenever a customer asks for a product or service that you don’t currently offer make a note of it in your database. Then if & when you do have such a product you can extract a list of customers who may have previously enquired about it.

Customers appreciate customised attention – it shows you care about them and the service you provide. So use your database to build a profile of every customer.

Once established you can use it over and over again – without effort. Provided you keep the database up to date of course.

So long as the information you reveal to your customers is interesting and relevant to them they won’t object. No matter how frequently you contact them. And the more often they hear from you the less likely they are to speak with your competitors.

Based upon the information in your database you can make sure it’s relevant and importantly you don’t repeat the same message inadvertently.

If your database is flexible it can be used for more than just marketing. You need though to be able to hold all the information that’s relevant to your business. Don’t buy a product that puts you in a straightjacket!

The information your database holds is needed by every person in your business who communicates with a customer – even if only indirectly. After all – "It’s All About The Customer". So use it as your CRM database too.

It’s all too easy for day to day activities to dominate so you forget about the things you must do to grow your business.

Being reminded of things to do, mailers to follow up, customers to contact … mean you stay in control and can be proactive. So use your marketing database for every aspect of customer contact.

One simple example that works - if a customer’s account is overdue for payment and you decide to put it "On Stop" make sure that everyone in your business is aware of it. Place a Stop Notice in the Client’s database record visible to everyone authorised to access it.

When a customer visits your premises -it’s amazing the reaction you get if you know in advance whether she drinks tea or coffee - And how she takes it. Just add the information to your database after her first visit.

The information in your database is structured so that it’s quick to find what you need. It must also be quick and easy to update.

So design your own data entry "form" – it’s called a template – so you’re prompted for the information to be entered. You don’t have to remember what’s important as you’re prompted for it automatically.

So now you’ve got all you need to profit substantially from your use of a Direct Response Marketing Database. To help you grow your customer base and make additional £££££’s from ethically exploiting the information you’ve gathered.

Remember your back end sales can be worth many times more than your profit on the initial sale. It all depends upon the Average Lifetime Value of your Customers. This determines how much you can afford to spend to attract each new customer.

Your database now gives you virtually the whole picture except for your financials. And you can often integrate these too with your Direct Response Database.

And even if this is not possible you can still use your Marketing Database as the focal point of your business. Simply generate your customer documents as PDF and store them in the customer record in your database.

This is very straightforward with a PDF creator program. Just set up an extra printer in Microsoft Windows as your PDF printer. Then whenever you need to retain a copy of a document in your database just "print it" to your PDF printer.

So now you do have the total picture and so does everyone else in your organisation that’s authorised to do so.

You may decide to select a product that integrates with your existing application software. Whilst this may give you some perceived benefits do not compromise your selection of the best product for your business.

First though you need to make it happen for your business so … take the first step and select a system that meets your needs …

It needs to provide everything discussed in this report and the things that are important to you. A useful checklist is …

Can it cater for an unlimited number of customers or is there a limit?

Is it a Single or multi-user system – so even if you start with just you as you take on staff you need to ensure they too can access the database – simultaneously.

Can you choose the information you can record for every customer & prospect? Or are the items pre-defined?

Is there a practical limit on the different types of products & services the database can hold?

How easy is to extract a list of customers for mail merging? And can you save this for future use such as a follow up mailer?

Is there an easy to use report writer or do you need to learn another product?

Is it an "Open System" integrated with Microsoft products such as Word & Excel?

How easy is it to analyse your marketing activities? And can it give you the information you need to monitor the success of each mailer, advert …

Does it include "reminders" so you can be proactive – all the time?

Is it really easy to use?

… And all your other hot buttons