Building a Database to Grow your Online Business
When a new business starts its life, whether it is online or off, one of the biggest and more costly challenges is to acquire new customers. This cost is a reality, however, the growth of any online business like this one can be balanced with direct marketing strategies and around the use of building a database.
Successful online businesses are those who are strategically mining their customer database, always communicating, delivering value, and facilitating new sales with the same customer. New online businesses will be growing a database through sales, and email opt-in opportunities. However, do not rely heavily on the email opt-in opportunity in the early stages. Your website will need to build credibility with visitors before they will consider providing their email address.
Quickly growing a database will be one of the keys to help in achieving financial targets in a websites first year of life. In order to aggressively grow a database of potential customers worth talking to requires two primary approaches: purchasing a database, or partnering with existing businesses and conducting dual direct marketing campaigns.
Purchasing a database
For example, Smile City is a business which contains a database of over 125,000 New Zealanders and has the ability to filter a database under any requirements. For example, you may only want to speak to “cat owners”, this may reduce the captive audience however, your business proposition becomes far more relevant. Smile City only charges you for the emails sent out, so the more targeted, the less it will cost you.
Even though this push marketing technique is not heavily relevant when compared to pull marketing, if the standard push success rate of 2% is applied, it could equate to some early wins on the board and send a considerable amount of cat owners to the website.
Dual Direct Marketing
This approach only works if you know of a business which has their own database of customers who would greatly benefit from your product/service offering. If there is a potential to gain access to a database such as this, it could become a very cost effective method to build sales and your own database.
At this stage it is important to note, to avoid spam law implications, there are codes of conduct which must be followed. To make this work for you and to comply with spam law, the campaign must be seen as originating from the database owner. Aside from spam law, it is important for the database to first recognise the email has come from a business who they recognise. If they don’t recognise the business they will instantly assume the email is spam and unsubscribe.
Once you find a database which can work for you, the other challenge is building a commercial arrangement to benefit the database owner. The database owner can be incentivised on the financial performance of the campaign, you only need to pay to acquire the customer once. When they are on your database, the direct marketing approach becomes yours to control.