10 Steps to Build a Powerful Customer Database

9 min read
Node tools in a marketing automation platform showing the lead management process in a campaign.

Database marketing sounds like a buzzword, but in fact, it can be crucial to successful marketing and business development. When planning omnichannel campaigns and building sophisticated automation paths, do you think about the quality of your customer database? With complete, up-to-date information about your customers, you can communicate and build relationships with them. Read on to find out how to build a customer database that delivers the desired results.

The main problem with customer databases 

Salelifter performed an analysis of almost 100,000 contact forms to check for the most common mistakes made while completing them. The results of the study revealed that almost a third of them contained an error. 25% of users didn’t provide their first and last name, often using the character of a movie, a fairy tale, or a celebrity, treating the name as a pseudonym or login rather than the actual data that could be verified. 

Errors appeared in the: 

  • postcode (45%)
  • address (17%)
  • phone (13% – wrong submission, number, prefix)
  • false data (5% - lexical errors, added improper aliases or non-existent domains)

The poor quality of email databases translates into huge losses caused by ineffective marketing campaigns. According to the IT Business Edge report, large businesses in the US spend an average of nearly $200,000 on direct mailing, which does not return the desired results. TDQI noted that the annual loss of US-based companies resulting from defective data is estimated at $611 billion.However, despite these statistics, enterprise spending is still primarily focused on protecting against external attacks rather than building quality customer databases. 

So, do we need a database in our marketing strategy? 

The most popular search for database phrases is the question - what is a database? So I quickly reply, that marketing database is a form of direct marketing and involves the collection of customer data such as names, addresses, emails, phone numbers, transaction histories, customer service submissions, and so on. This information was analyzed and used to create a personalized experience for each customer or attract potential customers. 

Therefore, the answer we need is obvious. This is the same question as - do we need customer relationship to sell. Relationships and data are still the foundation of effective marketing. 

There is no perfect solution for collecting good quality data but there are many possibilities to minimize this problem. Here are the ten steps to prepare optimal conditions for building a credible customer database.

Step one –  you need a clear form!

It’s a good idea to start by verifying the fields in the form. For fields like postal code, it’s easy. Just determine that it is XX-XXX, where every X must be a digit. Setting a condition for the field for cell phone numbers will be more tricky, though. When users come from different markets that use different formats, they may not fit the template you create.  

Screen present subscription form

To avoid such situations in all sorts of form fields, you can follow these simple tips:

  • First name. Accept all letters and special characters used in different languages. Again, remember that some markets may use non-standard formats.
  • Last name. Apart from letters and special characters, allow for spaces and apostrophes for certain names (O’Reilly, etc.). For both first and last names, allow for up to 30 characters.
  • Email. Don’t assume that everyone has a “normal” email address that requires just letters, a period and @. Special characters are not uncommon now and Google even allows spaces and pluses in Gmail addresses. And did you know that usernames in email domains can be up to 64 characters long?
  • Telephone. There are lots of formats for different kinds of phone numbers around the world, some with as many as fifteen digits. On top of that, the country code prefix can require another five digits. Best to allow for up to twenty digits in your phone number field.
  • Password. Don’t limit the imagination of users. Accept letters, special characters – everything. There are, however, signs like < and > that shouldn’t be used because they can cause HTML problems.

Also, remember to provide a description of the form fields so that the user can submit the information you need. For example, in the number or email field, specify whether it should provide private or company data. In the latter case, additional verification and exclusion of the domain associated with popular mail accounts such as “@gmail.com” may be used. 

Step two – remember about email verification

The most important piece of information for your customer database is the email address. In many customer monitoring systems and CRMs, it is the identifier that tells you who you are dealing with. Without it, the rest of the data is irrelevant, because we will not be able to identify the contact. 

That’s why it’s always worth using the two-step verification process. To download a document, subscribe to a newsletter, event, receive a coupon, etc. users not only fill out the form but must click the activation link in their email. This allows us to be sure that the address does, in fact, belong to the user. 

Step three – always offer something valuable 

To have people share something of their own, you should offer something in return first – such an offer is called a lead magnet. Depending on the features and purpose of your product, it can be free content, a discount, product demo or consultation. 

Screen present discount coupon

Once you know what kind of lead magnet fits best, make sure users understand what they will get from you and why they will benefit from it. If this is a demo of the program – describe exactly how it works. If it’s an ebook, show several pages so they know what they’re getting in exchange for their information. Avoid creating a landing page that contains only a contact form without presenting specific information about the offer. 

It’s always a good idea to show users what they will get after leaving an email address. If they get something other than expected, they will feel cheated and not willing to trust you again and share their data. 

Step four – use the foot in the door method

It’s quite natural that you want your customer database to contain as much valuable data as possible. You may have an impression this requires many fields in your sign-up form, but your goal is to keep barriers low: 

  1. Avoid asking for data that you can obtain some other way - e.g. by extracting them from other databases
  2. Don’t require data you will not use - t’s unlikely you will need such information as the client’s address if your product doesn’t need client locations
  3. Ask questions as simply as possible - long custom filled forms often scare page visitors away.

The right approach to extract valuable data is the “foot in the door” method. This rule says that you will achieve more success by asking for one small thing at a time. Getting an email address is that “foot in the door” that allows you to ask for more later. This means you have a better chance that the user will share more information in the future. Automating this process can help to get the most out of the relationship you build. 

Step five –  use automation

The “foot in the door” method may be even more effective if fully automated, but it needs to be set up logically. It does not work to constantly harass someone at the beginning with an incentive to subscribe to a newsletter or join a database. Let’s allow the user to first know about the offer. If you want to encourage someone to subscribe to a newsletter, set up the automation so that a notification will turn on when you open, say, the second article on the site. 

Giving the client a little time increases the chance of signing up and adding up to your customer database. 

  1. Make sure you frame your message in the right terms. It’s about what they get, not you. Make it clear that signing up to your newsletter has concrete benefits like x, y and z.
  2. Another method worth trying in automation is progressive profiling, the gradual acquisition of data gained through increased engagement. This can be done in a number of ways. You can, for example, offer more and different downloads, first by sending them to an email address, then asking for additional information before other downloads can be accessed. Materials can also be differentiated by offering discounts, coupons, ebooks, or invitations to events – with each one asking for something else from the user.
  3. You may also play with intermediate profiling, which is gaining data in other ways, like asking subscribers to complete a quiz. This is what Teavana did to learn more about their customers and their preferences when it came to what kind of tea was best for them. Results from the quiz were used to adapt content for different customers.

Step six– go mobile

Making sure the forms on your page are mobile-friendly isn’t just an option, it’s mandatory. The harder it is for mobile users to interact with your site, the less likely they are to complete the signup process.  

Screen present mobile screen with subscription form

Since there’s an endless number of mobile devices on the market, make sure your site displays properly on screens of different resolutions. You can test it with a free tool, e.g. Am I Responsive? 

Step seven – don’t duplicate! 

Customers don’t like long forms so keep everything as brief as possible. We often encounter situations when you need to enter your password, email, or other information twice. This is irritating since the data is often hidden (in the case of passwords) and when a mistake is made, you have to start all over. 

What are the alternatives? The simplest is that we do not ask for a password again, and instead of this make sure that there is a quick mechanism for generating a new password in the event of a mistake. If you need to re-ask for better verification, email it. Making characters in the password field visible will let the user type the password correctly in the first take. 

Step eight - the potential of external bases 

A marketing database can always be enriched with external data that will help better target advertisements or offers, but also help to reduce out-of-date information, changes in e-mail addresses, delete cookies, etc. Using external data for communication aims to create better-personalized marketing messages, reduce mismatched targeting and reach inactive customers.  

The most popular uses of external data are: 

Screen present two mobile screens with shop filtering base on weather data
  1. Weather forecasts By predicting favorable and unfavorable barometers, heat waves, violent storms or snowstorms, we can match offers with a short response time. We can use the "buy now" campaign or temporary discount coupons. This type of advertising is effective in the medical, fashion or gardening industries, where the weather has a significant impact on purchasing decisions.
  2. Proximity marketing. Contactless marketing targets the message to smartphone owners who are within a certain distance from beacons, devices based on geolocation technology or RFID. These technologies enable the encoding of a specific message, mainly marketing, specified by the sender, which will reach the smartphone when its owner is nearby. This type of message will make the recipient/customer be able to use the offer immediately. In the past, we used GPS signals on smartphones only when we needed Google Maps to check how to get somewhere, now we have thousands of GPS-based applications and all of them require the user to actively transmit data at any time. This is a perfect solution for our marketing strategy but also a great opportunity to collect and update the database.
  3. Look-a-like is used to expand our ideal target groups to include "behavioral twins", that is, people with a high level of convergence of demographic data, customer journey or behavior patterns eg. on Facebook. This tool allows us to expand the audience, even if at the moment a small group of people is interested in the website. Look-a-likes can also be extremely helpful in activities outside Facebook, e.g. with programmatic buying.
  4. DMP (Data Management Platform) is a special data warehouse used for the classification, analysis and processing of recipient data. This data can come from various sources:
  • First party data: data collected or created by the company itself, owned by it. Data sources include data from websites or social media, items viewed or purchased in online stores, and customer data from marketing automation, CRM or ERP systems.
  • Second party data: third party data that we can use (we have adequate consent with marketing agreement.).
  • Third party data: Anonymous data collected by multiple DMP data partners (company registers, media, credit card companies, online stores, etc.). They contain information on media use, hobbies, interests, professions, purchases intended or completed and demographic data.
  • Interconnected databases (first, second, third party data) can be combined to create precise user segments. We can send the database created in this way to our system and start the process of constant updating.

Step nine  - update database  

An effective marketing base is primarily up-to-date and constantly expanded, not only with new or potential contacts but also new and updated information about our customers. Modern marketing takes customer data changes into account and is focused on collecting them, because the greater the competition in the industry where we sell, the smaller nuances affect the last success.  

  1. Check what your customer wants now - If we want to create effective marketing campaigns that translate into interest, sales results and the general increase in interest in our product or brand, we need to know what customers want here and now. Place of residence, occupation or interests changes over time, the same as our style, product categories that interest us, the price range of products and services, and even the preferred form of communication.
  2. Choose the right tool - Marketing communication should allow you to access to different types of information and clients, because every time a client or prospect changes job, moves to a new address, changes name, receives a new email address or makes any other change in life, his profile becomes out of date. A well-managed database collapses on average by 2-3% each month, meaning that in just a year, a third of your data may be invalid. To reduce data degradation, focus on information that is more valuable, such as a phone number instead of a business email address.
  3. Monitor data accuracy - Customers do not always provide accurate information. Typos, handwriting legibility, or incomplete information can make a big difference in the quality of your database. You can reduce inaccuracies by replacing the input fields with standard drop-down menus or checkboxes. Pay attention to this especially in the contact form. Base mortality 20-30%.

Step ten – be honest and tell subscribers what the data is used for 

One of the most common fears among people who lie on signup forms is that they will receive tons of unwanted calls and emails trying to sell them something. That’s why you need to make it clear why you’re asking for data and what you use it for. 

Screen present subscription form with information about the purpose of collecting email addresses

Stress that you: 

  • Don’t share the data with anyone else
  • Won’t send spam
  • Will make it clear what you will send and how often

If you have a wide range of products or services, give the user a choice about what products or areas they want to inquire about. You can also send surveys asking about how often users want to receive information. 

Wrapping up

Without a clear strategy and creative communication, each database is just a useless set of sequences of numbers that don't tell anyone just anything. If we leave it alone, we will not actively engage our clients or potential clients, the collection will quickly become obsolete, and people who once became interested in us will have time to forget or buy a given product or service from our competitors. The real challenge lies in collecting real data that allows us to create accurately targeted campaigns. It is worth taking time to get to know techniques and strategies that will help to maximize your database’s potential.