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Using Databases for Effective Specialty Marketing

Vinod Gupta, Founder, Chairman, CEO, infoUSA, Inc.

Chances are that as an entrepreneur, you’re in a specialty – or niche – business. For what, after all, is entrepreneurship about if not finding untapped potential in a corner of an existing market ignored by major companies?

I know. I’ve been there. Back in 1972, when I was working for a recreational vehicle manufacturer in Omaha, Nebraska, my boss wanted a list of all of the RV dealers in the country so he could sell to them. There was no such list, so I decided to create one. I ordered every Yellow Pages phone book in the country, all 4,500 of them. The books were delivered to the company and stayed there until my boss ordered them removed because they were blocking the entrance.

I had them taken to my home garage, and there I went through the books one by one, compiling the RV list that my boss coveted. I gave him the list and told him he could have it for free – if I could also sell it to others. He agreed, and my company – infoUSA, Inc. – was launched.

The Role of the Database

These days, of course, infoUSA no longer sells lists on yellow pieces of paper. We computerized in 1983, and today, we maintain one of the nation’s largest databases, including 14 million businesses and 220 million consumers. Some four million customers use this resource. More than 90 percent are entrepreneurial companies like your own – many with only one or two employees. These small businesses account for fully 60 percent of infoUSA’s annual revenue of $311.3 million.

The point is that we know small businesses. We also know something even more fundamental: that for such companies to thrive in what are typically specialty markets, databases are an effective tool for reaching customers. While this resource doesn’t do the whole job, it can and should comprise the core of a marketing program which also includes publicity, word-of-mouth recommendations, or “buzz,” savvy geographical placement of the company’s physical outlets, such as retail stores and offices, and, if affordable, advertising.

Put another way, databases, which slice and dice lists to pinpoint just the right prospects for products or services, enable entrepreneurs to find the proverbial needle in the haystack. You as an entrepreneur, for example, might have a target market of only 200 companies or a select universe of individuals who might have use for your product or service – you sell feminist-oriented prayer books for Lutheran women ministers in their 20s, or seeds for gardeners who grow vegetables native to Sicily, or, like one of our own customers, jelly beans for companies offering employees coffee breaks in rooms set up for that purpose.

You might think finding customers for such products amounts to finding precisely those proverbial needles, and in a way, it does. The difference is that if you know what your needle looks like, a database can do the legwork for you.

Using Databases One, Two, Three

Simply put, databases make the job of finding customers as easy as one, two, three. To use databases effectively, company owners must take three distinct steps. What follows is a look at each.

  • Step 1: Know Your Customers

In any business, there’s no substitute for retaining existing customers. Make these people happy, and they become the base from which you add others.

As a niche marketer, you have at least an idea of who might want what you have to sell, even if they aren’t yet actually buying. Get to know these people. Understand what they are looking for. Consider what they like and don’t like about your product or service.

  • Step 2: Analyze Your Customers

Your current customers or clients have all of the information you need to find other customers. Analyze them to find common characteristics. If you are selling to businesses, consider revenue and number of employees. If you are selling to consumers, focus on demographics, such as age, as well as income levels.

Armed with this information about your customers, you are ready to make use of a database to look for new ones.

  • Step 3: Find New Customers Just Like Your Existing Customers

In a niche business, you find new customers by cloning your existing customers. Once you know and understand your current customers, you can determine the types of businesses or customers to target.

An online brokerage, for example, was seeking to build its business further and needed a list of names of people “with a propensity to invest” just like its current clients. Our company used proprietary modeling to provide a set of names of individuals from throughout the United States with the required level of income.

You should buy a database-generated list only if you have analyzed your current customers. In addition, you should wait to buy until you are ready to use the list, because lists do have a short shelf life – about 30 to 60 days if you are selling to consumers and six to nine months if you are selling to businesses. Indeed, about 70 percent of infoUSA’s entire database changes over annually.

No Magic

Of course, databases don’t do the whole job of securing customers for products or services. An entrepreneur must be ever vigilant about prospecting – and not only when business is slow. Encourage your sales reps to call on customers even when business is booming and they don’t need them. Once customers are secured, make servicing them your top priority. (At infoUSA, depending upon a customer’s wishes, we provide lists on printed labels, by email, or on CDs or DVDs. We aim to satisfy the full spectrum of our customers’ requests!)

The magic of databases is that there is no magic. Every entrepreneur has a product or service to sell. The trick is to match what you are selling with people who are buying. Used effectively, databases serve as the resource for making that happen.

Know your customer. Understand your customer. Find new customers just like your existing customers. Niche businesses are really that simple.

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