Why companies should build better contact databases.

by Peg Fisher

Distributor databases often include contact names for people in their customers' accounts payable staff. These employees pay bills. They do not buy products and services, or influence purchasing decisions. Front-line sellers (outside and inside sales, counter sales, and telesales) must rely on between-the-ears market intelligence or manual notes to keep tabs on contact names at customer locations. 

Conversely, direct-marketers build and maintain a database of customer contacts because they know increased sales, market share, and reduced materials and mailing costs directly correlate with targeted one-on-one direct marketing.

Distributors can reap major benefits by building better databases.

Why add contact names to your database?
There are two reasons why distributors should maintain contact information in their database: 1) To increase marketing material productivity, and 2) To reduce material production and postage costs. 

If the only names in your database are the accounts payable staff at your customers, you're wasting promotional efforts on them.  When you send promotional materials along with your invoice, you inconvenience them. They must separate and toss the useless information. Most don't forward the material (or even know who might need it). 

Another mistaken strategy is to send X number of catalogs or promotional materials to customer mail rooms in the hope they'll get them to the right person. In most companies, the policy for handling materials that lack proper addresses goes something like this: "No name or title or mail stop number? Toss it." Either way, you waste marketing dollars.

Target marketing means putting the right materials in the hands of the right contacts. There is a direct correlation between target marketing and increased sales and market share. The premise goes like this: all contacts do not need and cannot use the same information about your company and products. Depending on each contact's job, needs and interests vary. So should your marketing communications. Customers appreciate targeted materials because they are contact-focused. They appeal to contact-specific needs and interests of buyers and purchasing agents vs. influencers and users. For example:

Marketing materials that target buyers or purchasing agents should focus on services that help them gain efficiencies and reduce purchasing time and costs. Examples include:

Marketing materials targeted to influencers and users (engineers, technicians, maintenance foremen) should focus on their need for products and services that help them do their jobs. Examples:

Direct marketers diligently build and maintain databases. Their database allows them to implement one-to-one targeted marketing with catalogs, mini-catalogs, special promotions on products and services, and educational materials. They maintain  information on each contact that includes:

Better contact lists in your database make for better list segmentation by contact type. Better contact information also reaps benefits such as increased sales, greater market share and reduced costs from less waste and postage. Sometimes called "data hygiene," list maintenance is an ongoing process.

Database building tips
Start by defining a consistent process for building a database and establishing expectations of your employees. Do not assume employees know how to properly input database information. Assumptions result in multiple records for the same account when names are spelled differently (Ken vs. Kenneth vs. Kenny) or have different street addresses (bill to, ship to) while others have a P.O. Box. Here are questions you need to answer to develop database input guidelines:

Who is responsible for gathering database information?

What is your time frame for updating your database? 30 days?

What specific information do you want employees to gather?

Where should information be recorded? On a form you design? Directly into your system?

What standards apply? For example, must entries include complete company name vs. abbreviations, correct spelling, nick names vs. given names, accurate job titles?

Who gets completed forms (if you use a manual system)?

How will you maintain your database? Who is responsible for updates? How will you track the date of the last update?

Distributors may gather new customer contact information when setting up a new account or establishing a line of credit. A better approach is for field sales or telesales to use this opportunity to sell contacts on your company. 

Companies can gather contact information about existing customers in several ways. For example, you could hold field and telesales responsible for accounts assigned to them, and give lists of other customers to other employees, such as inside and counter sales. If you have thousands of customers, consider outsourcing the task to a service agency call center.

Sales rep WIIFMs (What's In It for Me?)
Sales may perceive building a database as taking time away from selling. Let's dispel that myth. Database building can help salespeople break old selling habits and focus sales personnel on new contacts with potential new sales opportunities.

We all fall into old habits and forget to ask questions, such as:

   "Is Tony Di Angelo still your engineer (maintenance foreman,
    plant manager, etc.)? 
   "Do you have other engineers?" 
   "Who makes spot buys?" 
   "Who specifies the products you buy?" 
   "Are you the only one who does purchasing? Do you purchase
    for X Department or Y Operations?" 
   "Can you help me verify information on our database?"

Salespeople also fall into the habit of calling on the same people all the time. They spend time only with selected contacts, such as buyers and purchasing agents, but miss opportunities to sell to users and influencers. Or, they assume the person they call on makes purchases for every area. By asking questions and gathering contact names, they may learn that the tool room, maintenance department and other operations do all or part of their own buying.

A by-contact database gets the biggest bang from your marketing buck. To focus employees on getting the job done, consider what one company does. It pays 50 cents for every new contact profile. Employees continuously focus on building and maintaining their database. This ensures that their one-on-one marketing materials drive customers to contact them.

Peg Fisher is president of Peg Fisher & Associates Inc.
(PF & A), a sales, marketing, and customer service consulting firm and trainer to supply channel companies. Reach her at 262-633-1675, or via e-mail at pfa@execpc.com.

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