Database marketing sounds like something Wal-Mart or Amazon.com is fantastic at. And they are. But so are many small businesses down the street. My local coffee shop has one of the best database marketing systems in the world. Their order processing machines remember my favorite cup of joe and serve it up to me hot, on sight, without my even asking.

Of course, their order processing machines are bipedal, with organic computers known as brains and eyes in lieu of optical scanners. Database marketing essentially seeks to emulate what the baristas at the Coffee House do naturally.

So, how can you know if your company is a good candidate for database marketing? There are three essential questions to ask:

1. Do you have best customers? Do you possess a group of customers that clearly drive more profits--not gross sales, remember, but profitsto your bottom line?

2. Can you identify those customers?

3. Can you reach those customers? Can you communicate with them, individually, and treat them special?

It is extremely valuable to you, then, to answer the above three questionsafter you answer this one:

Are you already a successful database marketer?

Many sole proprietors already are. So are thousands of sales reps. They are familiar with their customers, they understand their preferences. If they have under a hundred customers, maybe even fewer than 500, they know their names and their likes and dislikes and know which ones contribute the most to their pocketbook.

But once a business achieves a certain size it becomes impossible for any one person to know all the customers. This is where the aid of the computer comes in. But, we dont want to discuss tactics in this article. Rather, lets simply focus on whether or not your company is a candidate for a database marketing program. And that means we need to devise some questions that help us answer each of 1, 2 and 3 above.

Payment. Can you capture their individual financial contribution? Does everybody pay with cash or credit card, and then scoot out the door? Or do you invoice your customers?

Communication. Do you know their name and address? Can you acquire their name and address? How about email address? Can you acquire it?

Acquisition Method. Do you know how they heard about your company in the first place? Can you track and quantify how much it cost your to acquire that customer?

Decision Maker. Does the person who actually buys from you control the purchasing decision? If you sell to consumers, the answer is probably yes; but if you sell to businesses it can get a bit more complex. In some industries even finding let alone reaching the true decision maker can be tough but--thats the person you need to market to for you to be effective.

OK, the above are entry-level questions to ask when evaluating if your small business is a candidate for a database marketing program. Again, the key advantage the application of a database marketing program affords as part of a small business marketing program is the ability to target best customers. You find those customers that send the most to your bottom line, and spend more of your advertising dollar on them.

If you cant identify and communicate with a best customer segment, then it is probably best to look at a mass marketing program, where you essentially spend the same marketing promotional dollars on each prospect.

If you can identify these best customers, then you are ready to learn more about specific database marketing techniques.

Remember: Brand (who you are) + Package (your Face to the Customer) + People (customers and employees) = Marketing Success.

2006 Marketing Hawks