You know that restaurant you love to visit. You walk in the door, they say hello, and they call you by name. You chat with the server. It could be any server, because you’ve chatted with all of them. Now the pandemic hits and you can no longer visit your favorite restaurant. Guess what, they probably don’t even really know who you are.
Most small and new companies have never put together a customer database. Yes, they know frequent customers when they see them. But how does that work when you no longer “see” your customers? It doesn’t. Now is the time to pull together a useful customer database so you can see insights about who your customers are.
Okay, so what is a useful customer database?
First let’s define a customer database, sometimes called CRM (customer relationship management). You can use some CRM software like Salesforce.com or Hubspot. But a great way to get started is simply in Excel or a table. Make people rows and data/actions columns. Most companies have scraps of information in different places. The goal of building a customer database is to get all of the information in one place so that you can see everything you know about a customer across a row.
What kind of data can you put in this database?
Any information you have. Maybe you remember some people’s names with their faces. Write down their names. Google their name and city. Add a picture in the next column, column 2. How about their favorite purchases? That’s column 3. How often do they buy? That’s column 4. You get the picture. Build the database with whatever information you have. You probably know more about your customers than you think you do. But, you’ve never written it down.
Don’t know their names? Have you ever collected business cards, written receipts, order forms, credit card slips, point-of-sale card swipes? Go through whatever records you have and see who you can put in the rows. Then try to add any demographic information you have – what neighborhood they live in, gender, relative age, if they have children or not, zip code, etc. Finally, add any behavioral information you have – favorite products, purchase frequency, special orders, how friendly they are, etc. If they’ve given you permission to contact them, you can add contact details like email, phone or address. If they haven’t opted in to communication from you, any communications will be considered spam and is illegal.
Build a Customer Insights Database
What do you do with this information?
This next step is the most important. You want to bucket your customers into some categories. The best categories are loyalty-based. It could be something like: Weekly customer vs. occasional vs. only once. Or it could be by size of the order: large vs. medium vs. small. Or it could be by types of products they buy. Or it could even be based on how they like to communicate with you. The key is to think about different categories that would cause you to approach them differently.
Now that you know something about groups of your customers, start designing products and promotions that are better suited to their needs. One local restaurant noticed that some people were ordering for a family. They put together a family meal for takeout – 4 entrees, salads, and desserts for one set price. Or maybe they are seasonal buyers – what spring, summer, fall or winter package can you configure for them? Think about how often you should be talking to them (by email, mail or text). Do they need a weekly, monthly, or quarterly reminder that you are there for them? The key is to understand who your customers are. Once you have that insight, you can decide how to enhance your relationship with them by anticipating their needs. You offer them value and they reward you.
You can find out more about the Customer Value Void and how to avoid it in The Titanic Effect.