Platt Perspective on Business and Technology

Building a client base – part 5: CRM and populating your client database with the right data

Posted in startups, strategy and planning by Timothy Platt on August 20, 2010

You have a product or service to offer, and an idea as to the market demographics that would find value in what you offer. Your market analysis should have given you a sense as to what these potential customers are looking for, and at what price point, and it should have given you an idea as to where they go for information and for product and service recommendations and reviews. You also have networking and viral marketing – word of mouth and its online equivalents to help spread the word about your business and what you do with it.

You probably also have at least a start on building a database system, and with a database and something of a front end that customers and potential customers can reach out to you through. This may be through phone line connections. It may be through online forms that you maintain through your own web site. You may be working to develop leads through online links and even forms pages on third party directory and service consolidation and ratings sites. And you have started to actively collect and organize your client data that you can use in developing an active customer relations management system, a customer outreach and a productive business that actively and proactively connects to your target marketplace. And now you find yourself facing an emerging challenge.

This is my fifth posting in this series on building a client base, with the first four appearing in Startups and Early Stage Businesses as postings 34, 36, 38 and 42. I have written about identifying and connecting with clients and potential clients, and about data fields and databases. Now I am going to turn to the issues of maintaining your system so you do not find yourself overloaded with out of date and problematical information, and so you do not accidently reach out to the same customers multiple times with the same messages.

People move and they sometimes change their email addresses – or if they have more than one email account they sometimes decide to do their purchasing using a different one than they initially gave you. This can happen with home and personal email and it can definitely happen where a customer gives you their work email address. Many people have middle names that may or may not show in your records or that may be entered as middle names or middle initials. There are many ways that data can be added into a system for most any real world client or customer and with time and with the potential for connecting to that same person multiple times it is easy to accumulate duplicate records. And records listed can become obsolete for carrying out of date or inaccurate information in key fields. So this posting is about data cleansing to catch and correct for errors, and it is about de-duplication, and that is a problem that vexes even the largest and best run customer-centric companies.

It is hard to convincingly say your company is Green and environmentally responsible to someone you have accidently sent six copies of that same catalog to, each showing a different variation on their name and all to the same address – again. I share that example from experience, noting that my wife and I receive multiple copies of the same catalogs every time from each of several companies that proclaim their environmentalism as a key marketing statement – some with just my name, some with my wife’s and some with both and for me with and without the Ph.D. showing and all to the exact same home address. Data cleansing and de-duplication are not easy, but failure to do this can and does add to your costs and this can be a significant avoidable cost.

Sending multiple catalogs or other physical mailings to the same household or business customers, and to the same recipients there means wasted expense for producing and shipping these marketing and sales tools. There is always going to be at least a minimum unavoidable loss of potential return from this type of investment from copies damaged or lost in shipment, and from printer to you and from you to your customer base. But loss from error in shipping labels and from duplicates sent to the same customer can be much larger and that is largely avoidable.

Emailed catalogs and messages look at first glance to break away from this pattern of increased expense from increased numbers of copies sent out but even there, errors and duplications carry avoidable costs that can and do scale up with increases in numbers of faulty and duplicated emails.

• Internet Service Providers (ISPs) actively look for and seek to filter out spam, and when the same basic message and subject line come from the same IP address to multiple faulty or out of date email addresses this goes into a spam recognition score for the sender. And if that score reaches a threshold level that would warrant concern, your catalogs and other mailings sent to that ISP and its members will be labeled as probable spam.
• Even if duplicate emails go through, people are more likely to delete without reading if they get what looks like too many emails from the same business.

Here the loss is not from up-front costs, but it is from loss of sales and business and just as real.

How do you best track for and manage your data cleansing and de-duplication? There is no simple single answer to this and if there was no one would ever find multiple copies of that same catalog in their mailbox on the same day – again and again, or multiple copies of that same email in their inboxes. But there are some steps and even at least semi-automated steps that you can take that can make this easier and the costs from this problem lower. And here, as with posting four in this series: Selecting a Database Solution I will assume that you are using some form of relational database to house your client data.

For postal mailings as one possible approach:

• Set up a SQL query that you run on a regularly scheduled basis that looks for duplications to the same street address without regard to room, apartment or suite number data and look for similar or identical names.
• Set up a SQL query that you run as regularly and on the same schedule to identify possible duplications for names to similar addresses.

The goal here and with similar queries is to help you filter out potential duplications that you would then review as a smaller set than you would face if you had to manually go through the entire database. So Bob Smith Jr. and Bob Smith Sr., both living at the same address might be sent separate catalogs, but Bob Smith Junior and Bob Smith Jr. probably indicates a duplication, and so does 123 Everlee Place, Apt. 1, 123 Everlee Place Suite 1 and 123 Everlee Place without either, and certainly if they are all going to Bob Smith Jr. Ultimately someone is going to have to actually look at the records flagged for review but well thought out SQL queries can help you limit the number of files you have to so review.

For email distributions, you can and should offer a link to every message sent that a recipient can click to, to tell you this is a duplicate email and unneeded. This should be added into the basic template used and above the opt-out option link. You should also be tracking bounce-backs, and be following a set of consistent automated distribution rules for removing recipients from the bulk email distribution list sent to. As a simple example you might:

• Immediately remove any recipient from your distribution lists if you receive an opt-out message from them.
• Immediately remove any recipient from those distribution lists if you get a “recipient not found” or similar bounce-back indicating this is now a faulty email address, or that it is the address to an account that has been closed (e.g. Bob Jr. no longer works at the XYZ Corporation so he is not longer in their email system.)
• Remove an email address from the distribution list if you get three “full inbox” bounce-backs in a row as a single bounce-back of this type or even two may mean the box unexpectedly filled up while the owner was away or inattentive, but three or more would mean the email address has probably been abandoned. This is an issue that can and does arise with free email accounts from sites like Yahoo that can be set up as throw-away accounts to limit advertising and other clutter from a main email account inbox.

The problems and issues I write of here do not and will not simply jump out at you on your first day in business, or even in the first year for most small and growing enterprises, but it is something that can sneak up on you and especially as time passes and records accumulate, errors, duplications and all. And the potential for this is certain to arise as your business scales up. So I recommend planning for and building for this and for managing it from early on when it is still a small and easily managed potential problem so you do not suddenly realize you have a cash and efficiency (cash) bleed from it.

The next posting in this series is going to look into security and risk management issues in maintaining and accessing your client database and CRM system.

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