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How Accurate Is What You Know About Customers

If what you know about your customers is outdated, you could be wasting a lot of money. Today, I received a mailing from a computer network appliance manufacturer addressed to a company I closed in 1999. It was one of those expensive full-color folders with glossy inserts, mailed flat with over a dollar in postage.

While this mailer might have been of interest to my old company, as a management consultant I have no interest in network appliances today. The assumptions this mailer had about me as a buyer were completely wrong.

Consider these facts about your business-to-business customers:

• While business addresses change less frequently, 16% of your customers addresses will change of the year. What are you doing to keep addresses correct?
• Phone numbers (especially extensions) change daily across your customers base, you can't rely on operators to connect your sales people. How easy is it for customers to update their accounts?
• As much as 1 in 5 employees change positions each year, meaning todays customer could move leaving key accounts without contact. How are you finding out about new decision-makers?
• Businesses close, approximately 10% of businesses close their doors each year according to the Small Business Administration (in the UK, it's 6.3%). Are you marketing companies that can't buy your product anyway?
• As much as 2% of any outgoing direct mail is returned as undeliverable, of the remaining delivered as much as 2% don't reach the intended recipient. How much less would your campaign cost if your message was delivered?

How much of your marketing efforts are wasted by inaccurate assumptions? Yes, this company could have purchased a rented list, but ultimately it is your companies money wasted when your message doesn't reach the intended audience. Enough changes in your own customer base that, without effort, 75% of what you know about customers is wrong.

How can you improve your customer knowledge? It starts with first consolidating customer information, second integrating data elements between divisions, and perform regular data cleansing actions. How much is it costing you to base your assumptions on old or inaccurate data?

/ clearly-communicate | profitable-customers /

By Justin Hitt at September 19, 2003 6:02 PM  Subscribe in a reader