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Are you proactively building a million-dollar database?

 24 May 2022     Donald Cooper 

My wife and I typically spend three wonderful weeks every December at our country house in the Muskoka Lakes area, two hours north of Toronto. What I’ve discovered about most of the businesspeople in that region is they do nothing to proactively grow their businesses. They have, however, become quite proficient at whining about how lousy business is.

In just one day, the week before Christmas, I bought a new power drill at a local Lumber Yard; shopped at a gift shop; browsed through the studio of an artisan potter; bought flowers at a flower shop; purchased a gift certificate at the local live performance theatre; and, had lunch at a local chef-owned restaurant.

The sad thing is not one of those six businesses asked me if I’d like to be on their database so they could proactively advise me about upcoming events, special offers or community happenings. Not one of them is building a database that will allow them to communicate, add value, build relationships, create loyal fans and grow their business.

Not only would this simple step add to their bottom line every year but, some day, when they want to sell the business, it will be worth a lot more with a large, active and loyal database than without one.

Depending on what business you’re in, the least amount of info about customers and prospects that you want to gather for your database is their name, business name (if that’s relevant) and e-mail address.

If it’s helpful, over time, you may add to that basic information by documenting some or all of the following information: address and phone number; name of family members or relevant family info; what they buy; when and how much they buy; how they prefer to pay; their likes, preferences, dislikes and special needs; their interests, values and concerns; special dates in their lives, or in their relationship with you; how long they’ve been a customer; past complaints or service problems and how they were resolved.

For example, Fairmont Hotels knows all those things about me and also that I’m allergic to feathers, prefer a king bed and a room on a high floor, near the elevator. They use that information to serve me wonderfully.

On the other hand, in the last four years I’ve spent over $20,000 at Home Depot on lumber, stain, tools, flowers, mulch and a large garden tractor and they don’t know me from a hole in the wall.  I think I’m an important customer there, but never get treated that way because they haven’t got a clue who I am. What a missed opportunity.

It’s tough to have a relationship with people you don’t know a lot about. So, here’s the thing. If the pizza place around the corner, that your family orders a $15 pizza from, over the phone, every few weeks, knows more about you and your preferences, your buying habits and your family, than you know about some of your biggest and most valuable customers, you have a problem in today’s hyper-competitive world. And the problem can be solved, easily, with a little effort and some very affordable software.

Stop whining about needing more sales and do something about it. The internet is the greatest ‘gift’ to the art and science of marketing ever devised. It allows you to proactively market directly to people who already know you, trust you and love you. And, if you choose, your growing database may allow you to market far beyond your physical location through your website, blogs, e-newsletters, special announcements and social media.

Some businesses do get it. Last Valentine’s Day my wife and I drove 120 miles and paid a lot of money to have dinner at the beautiful Inn on the 20 in Niagara wine country, southwest of Toronto. Why did we do that? Because they asked us to.

We drove past hundreds of very good restaurants much closer to home and probably less expensive. Because Inn on the 20 served us wonderfully the last time we were there, they got us onto their database by asking if we’d like to know about special gourmet dinners and other culinary events they offer from time to time.

We cheerfully gave them our e-mail address and, magically, two weeks before Valentine’s Day a beautifully designed email arrived on my laptop describing their special Valentine’s dinner just as I was starting to worry about how I was going to make that a special day.

I called their 1-800 number immediately, booked the dinner and was asked if we’d like accommodation in the Inn that evening and, perhaps, a relaxing couple’s massage the next day.

Now, here’s the bottom line on all of this. When we arrived at 6:30, the dining room was packed with happy couples. This inn is in the middle of nowhere, especially in winter, and they filled the place because they built a customer database, created an extraordinary event and then promoted it to their database, at virtually no cost to them. They were proactive and they were making money.

Proctor Marine in Simcoe, Ontario uses their database to send out a helpful, monthly e-newsletter with important information on boating, boat maintenance, new products and tips on where and how to fish. It’s a marketing masterpiece.

Peter Swanek, owner of Peter’s Players in Gravenhurst, Ontario started with about 200 e-mail addresses of people he thought might like to know who’s playing at his newly opened Blues and Jazz venue. By using a pop-up on his web site, he quickly grew that list to over 6,000 followers and fans and, using that list, sold out every show in a few hours. To do this, you need a great web designer. Don’t deal with amateurs even if it’s your nephew.

What’s really goofy is the thousands of businesses do spend the money to create a customer database and then do absolutely nothing with it. They have all the expense and none of the benefit. I see it all the time.  It’s nuts.

A few years ago, we had the built-in humidifier in our condo serviced by a company recommended by the manufacturer. When the service man (also the company owner) finished the work, he used his cell phone to take photos of the equipment and the label with the model and serial number on it.

He told me when he returns to his office, he’ll create a database file for us and insert those photos, along with a note about the work he did and what work will likely be required on his next service visit. Then, when we call for future service, he’ll simply look us up in his database and immediately know what tools and parts to bring and how much time to schedule for the work.

He also assured us he would create an automatic ‘bring forward’ in his database system and proactively call us when the next seasonal servicing is required. I was impressed! This is brilliant, proactive marketing that creates customer ownership and increased sales except for one thing. It has been four years since that visit and he has not followed up once. Not a peep. Nada. Nothing.

Many businesspeople tell me their customers simply won’t divulge their name and contact information. That’s a sure sign your customers don’t like, value or trust you. Clearly, you’ve failed to build a meaningful relationship with these folks, and that’s a huge problem.

If people believe you will honestly send them valuable and interesting information, news, insights, reminders, updates and special offers and that you won’t abuse the relationship or sell their information to others, they’ll gladly give it to you. So, if you can’t build trust, you can’t build a database. But then, without trust you can’t build anything.

Bonus thought: In addition to your database of customers and prospects, you should create a separate database of media and key influencers who write, broadcast or blog about what you sell or the lifestyle you deliver. Then, every few months, send them some interesting or even controversial info about what you do, or your industry. Tell them what’s new, what’s special, what’s next, that their followers will find interesting. These people can help make you famous and famous is good.

So, what will you do to create and then consistently and responsibly use a database of customers, prospects, media and key influencers? How will you use it to deliver value, build relationships, inform, amuse, inspire, increase sales and grow your bottom line?

That’s it for this week. Stay safe! Live brilliantly!

Phoenix AMD
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This HGO article was written by:
Donald Cooper
Donald Cooper

Donald Cooper has been both a world-class manufacturer and an award-winning retailer. Now, as a business speaker and coach he helps business owners and managers throughout the world to rethink, refocus and re-energize their business to create compelling customer value, clarity of purpose and long-term profitability.

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Home Goods and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

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