The Tasks of Database-Marketing:

• Selection of the right target-group
• Definition of control-groups
• Implementing a direct-mailing activity
• Analysis of the results of a promotion
• Increasing customer-loyalty
• Building a customer-relationship
• Building a customer-history

Building a customer history

Building a customer-history is one of the most critical tasks within Database-Marketing. You may ask WHY, but the answer is quite obvious.

Since you want to get a better knowledge about your customers (we assume that this is one of the reasons why you would like to use Database-Marketing: to better service your customers and to better fulfill their needs) what is more obvious than studying the behavior of customers? And isn't the transaction history or the order history an excellent (and above all: an easy) beginning? OK, so this is the answer!

Having a customer-history (meaning: any file in which information about a customer is stored in a historical way - i.e. a snapshot every month) certainly is the most effective and still the cheapest way to study the behavior of your customers, besides continuous market research.

Which information can you store in a customer history?

The answer is again quite easy: everything that can happen on a regular basis. You might want to store:

• order information
• transactions
• any kind of contacts
• participation in promotions
• even NO participation is relevant
• visits from salesmen
• coming to fairs and sales exhibitions
• ...

This list can be expanded to whatever you can imagine. It mainly depends on your business, how you do business and what you would like to know about your customers (and current prospects!). Always remember: a detailed history file gives you an excellent overview what your customers did at a certain time and what they did not! It can be a very valuable mine you may use for mining precious insight into the behavior of your customers!

How do you build a customer history?

The answer sounds simple but you soon will discover it is not!

Collect every information about your customers/prospects that you can get your hands on, save it in a database and add a time stamp for when this information was valid. Do not overwrite any information, just add the new information.

So why is this not easy?

Because when we said "every" we meant "every". And this is where a typical company gets into troubles. Because "every" also included information about any:

• telephone-contacts you had
• letters you sent
• products the customer/prospect was interested in
• investment plans the customer/prospect happened to inform you
• ...

See what we mean?

And finally a very tough one:

• it covers not only your customers but also possible prospects!

Collecting this type of information normally involves the whole company and demands a very strict policy. It does not involve only the salesmen/-women and marketers but every secretary, every telemarketing-caller, the CEO, ... . Building a customer history and living it - requires a deep change in the way your company does business. And as you certainly understand by now - this is NOT EASY!

Especially when it gets to storing information from potential customers (=prospects) you will find out that your standard accounting software will typically not allow to handle this (or: the accounting manager will not allow you to do so ...).

How do you use the history file?

Query the database and design time-series. This gives you valuable information about:

• the development during time
• changes from previous periods

By analyzing the development during time i.e. you can find out how behavior of your customers changes over the time of your relationship. By analyzing the changes from previous periods you gain a precious controlling tool that can serve you a radar - you may find out if you are still on the road to success or not. The earlier you know - the faster you may respond!