Marketing Basics: The How and Why of Lists

“The money is in the list”.

How many times have you heard that?

Well, you hear it so much because it is so very important.  Whether you are an online or offline business you need to cultivate a list of your best customers.

Having a customer list is critical to your business success.  Without a list you are throwing your marketing and advertising dollars away.  I could end the post right here and feel okay about it because what I’ve just written is critical and clear, but just to make sure you ‘get’ the importance of it let’s cover the why and how…here we go!

Why You Need a Customer List

Having and refining a customer list is an education in itself.  Reviewing your customers helps you to find out what they buy and why the buy.  This is critical especially if you want more customers just like the one’s who are currently buying your products and services.

It is also a good idea to regularly segment your list by demographic information.  Do you have lots of local customers or do your buyers come from everywhere?  Do they all fall into a similar age, gender or economic group?

With these few facts in hand, it makes the process of choosing the right advertising venues much easier.  Why spend money on ads that don’t target the people most likely to buy.

Think about television advertising for a moment.  When Coke pays to have a commercial run during a popular weekly sitcom they are hitting thousands of viewers.  But the money is paying to advertise to diabetics who likely won’t buy, teens/tweens who don’t do the household shopping, Pepsi lovers, non-cola drinkers, vegetarians and organic eaters, etc.  All that money going to advertise to people who will never buy the product.

List refinement and cultivation removes the added expense of advertising and marketing to people who aren’t likely to buy.

A customer list is not just for research purposes it is a tool for communicating with your potential buyers.  Typically if someone buys and they are happy with their purchase, they are more likely to buy again from the same vendor.  We are all creatures of habit when it comes to spending patterns.

It may seem like price is the biggest consumer buying consideration but that is a false notion.  Only about 10% of consumers buy on price alone.  Most buy on experience.  If the experience was good they will go back.  Think of your favorite restaurant…you likely go there because you like the food or atmosphere and price likely plays a small role.

It makes sense that in order to improve the customer experience, constant contact is a must do item.  Customers like to know about those with whom they do business.  A weekly email or newsletter can have a tremendous effect on whether or not that customer returns.  Even more importantly, adding an offer to your otherwise informational communication can prompt customers to purchase, especially if they have been sitting on the fence about a particular purchase.

But How Do You Make Your List Great?

To be sure a list of names is just, well, a list of names.  What you do with the list once you have it determines whether or not the list will be great or mediocre.

Segmenting the list is one way of enhancing its effectiveness.  I typically make two segments for my automotive business list.  One list is for the top customers.  Customers make that list by meeting certain criteria, only one of which is dollars spent.  The second list is for everyone else.

The first list receives newsletters, coupons, offers and flyers regularly.  The second list receives informational updates and flyers.  I have segmented my list in this way to ensure that the customers that are my “best” customers get the best stuff.  These are customers who are easy to work with, keep their appointments, follow directions, take care of the cars regularly, basically people we love working with.  The second list is for those customers who show up late, complain about pricing, don’t always do necessary work, make it difficult and I’ll work with them but it’s a lot more work.  Finally anyone who is extremely difficult is removed from the list entirely.

Your segmentation may be based on a whole set of different factors.  You might segment by gender, by dollar value spent, by order size, by location or any other factor that translates as important for your business type.

By segmenting you can laser focus your advertising, marketing and communication efforts and, in turn, convert your list from good to great.  A highly responsive list is a business building list.

Of course the best way to make any list great is to use it.  I’m always surprised at the number of businesses with access to list creation who simply don’t bother.  And then there are those who have lists but never use them, either to enhance their marketing and advertising efforts or to just send out a simple flyer or newsletter.

The absolute greatest list is the one that keeps customers coming back again and again.

So if you have no list, start making one.  If you have a list start using it.  Dollar for dollar, hour for hour, it will be the best investment you ever make.