Economy

Database marketing and management for SMEs

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Sales and marketing would be impossible without good database systems. As business tools go, database software is essential. There are some new products you should know about. By SIMON LLOYD.

By Simon Lloyd

Every small to medium enterprise knows the value of a customer database as a sales and marketing tool. Used properly, the customer database is one of the most potentially effective devices to reinforce customer loyalty and boost sales.

Every SME also knows how challenging it can be to devote the necessary time to ensure the customer database keeps growing, is accurate and up-to-date, and is put to best marketing use.

And of course there is the time-consuming task of choosing which software to use in the first place. Any SME wanting to make better use of a customer database can access dozens of online resources that are readily available, and database management solutions can be custom-built or bought off the shelf.

“A lot of SMEs aren’t using their customer databases properly,” says Mackey Kandarajah, co-founder of web design and database marketing company Pakka.

“They don’t communicate with customers through the database enough, but of course it usually comes down to a lack of resources, especially time. Using a database effectively often means a lot of changes to the way an SME does things, but we all know that so many SME owners have enough to do just running the business and maintaining cashflows,” Kandarajah says.

Pakka is one of a growing number of companies offering database sales and marketing solutions specifically tailored to the SME sector. One of Pakka’s most successful and popular offerings is its suite of web-based email marketing software, called Rapid-e-mail Solutions.

The company designs emails for SME clients and sends them out to clients’ databases, and costs can be as little as $400 for a one month email marketing campaign. Importantly in today’s environment where tetchiness about spam and privacy abounds, such email marketing services are fully spam-legislation compliant.

Kandarajah says he tries hard to educate clients on the importance of accurate data collection, especially where this is done offline – at, for example, a customer service desk or reception area.

“You’ll have a [receptionist] gathering customer contact details, but they are so often wrong. We have one client with a database of 5000 [customers], but by the time we ran it through our software to ‘clean it up’, there were only about 2500 customers with correct contact details.”

On Pakka’s advice, this particular SME changed its method of collecting customer contact details. Those who physically visited the company were handed a card on which to fill out their own details (as opposed to the receptionist taking them down), and if they provided an email address, they were automatically entered into a prize draw.

Email is becoming indispensable when it comes to the customer database, and just about any type of business can make good use of it without breaking the bank.

Jane Thom, the principal and founder of children’s party products e-tailer and party planner Partykids.com.au, has used email newsletters to build strong relationships with existing customers, and to build her database of new customers very efficiently.

The trick, according to Thom, is to send an email newsletter often – but not too often – and to make it informative and relevant. “I have a database of about 5000 [customers], and everything I do as an online business is by email,” Thom says.

Her business has been operating for six years, and she chose online SME marketing company Solutions Management to design her website. One attraction was that web-based email marketing software was included in the package. Among other things, emails are addressed to “Dear John” as opposed to “Dear Customer or Dear Friend”, an important feature of the software given today’s customer expects to be addressed personally.

“[The software] is so easy to use I could send out a newsletter every day,” Thom says. Not that she does.

“The reality is, I do it only once every couple of months,” she says. “I’m very conscious of how spam is becoming overwhelming, so if I send out a newsletter by email I must make it good and worthwhile, so I’m not constantly bombarding people with stuff.”

It’s a strategy that works well. Thom says her response is rapid and of good quality. “If I send a newsletter in the morning, usually I’m taking plenty of orders by the afternoon and the following couple of days, directly as a result of the newsletter,” she says.

One of the drawbacks of off-the-shelf database applications is that they are not designed for any particular industry sector. Sure, it’s not difficult for someone with a good grasp of software writing to customise, for example, FileMaker Pro to suit a particular SME’s needs, but it’s a different proposition altogether to do that for an entire industry segment.

That is precisely the challenge that excited Lee Woodward. Woodward had built a successful career as a real estate agent in Sydney extending over 15 years – so successful in fact that he had reached absolute capacity in the number of listings he was handling at any one time. He had designed and refined his own paper-based system over the years, but it wasn’t enough to keep up.

“Then I started building some systems to manage all my owners and buyers, but when I looked into the technology available to help with that, I couldn’t find a piece of software simple enough even to do [real estate agent] core functions,” Woodward says.

He moved into sales training, but could see a big opportunity still presented in the database area. “I was working at the time with five of the country’s biggest agencies and none of them had any database software,” Woodward says.

He says could see the potential in a database that was a real estate management tool as well as a marketing application.

A chance meeting seven years ago with software writer Andrew Duncan – and an investment of $30,000 of Woodward’s own money to pay for Duncan’s IT skills – resulted in what has become a purpose-built database now used at more than 3000 Australian real estate agencies, Complete Data.

The database, written on a FileMaker platform and designed for the best possible user-friendliness, manages a raft of functions such as matching buyers with sellers, it automatically sends templated SMS messages to segmented groups of people listed on the database, produces sales timelines for individual properties, generates emails and prints hard copy material such as letters to potential vendors following a sales agent’s listing presentation. An agency’s administration department can use it to track contracts, advise buyers and sellers of key dates, and even remind agents to send a gift when the property settles.

The entry cost of Complete Data for an agency with 10 salespeople is a one-off licence charge of $20,000.

Sue Clyde-Smith, principal of PRDnationwide in Edge Hill, Queensland, says her agency’s investment three years ago in Complete Data has more than paid for itself in the efficiency gains made by her sales team, which in turn has certainly led to more property listings than would have been the case without it.

“We chose it because it’s the only database specifically designed for real estate,” Clyde-Smith says. “It’s very user-friendly, but also important is that it’s flexible so we’ve been able to add our own touches to it. The [software] is networked through our server so our agents have access to all the data whenever they want and can use all its functions, but only the agent who has input a buyer or seller’s details can alter them, so there’s never any confusion.

“We used to have triple the work before this system came along,” she says. Woodward says he is now working on versions of Complete Data for other types of industries.

“We’ve developed Complete Data so that it can be synched with MYOB, and it’s barcode compatible so potentially it’s usable by any small business who has customers who need invoicing and chasing, or who wants to send out bulk emails and SMS. We can develop many different versions because every [business] has quirky ways of doing things,” he says.

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