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Increase your profits by up to 100% through database marketing

November 30th, 2000 by  Rachel Alexander 
Find out how you can use a database to grow and retain your customer base, and to increase the per capita value of your clients.
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It's in your interests to keep customers because their value to the business increases dramatically over time with a corresponding impact on profits. Indeed, Harvard studies show that you increase profits on average by up to 100% if you keep just 5% more of your customers.

Building a database is a fundamental direct marketing tool which enables you to retain your customers, especially to:

  • increase your customers'

frequency of purchase

  • increase the

    • total number of customers through referrals

  • increase the

    • average dollar amount of purchase through stimulating extra sales

  • measure client behaviour in order to

    • minimise wasted spend

  • and to

    • retain clients that might

    be thinking of "straying".

    Think about it - if a customer buys one pie for $1, and you are so friendly that you convince her to come in twice a week... then you convince her to buy a $1 packet of chips each time too, and then she tells a friend about it - your sales end up being $1 x 2 x 2 x 2 = $8.00 - an 800% increase in sales.

    Utilising your database improves the cost-effectiveness of your spend (i.e. costs less per response to generate extra sales) and increases operational efficiency since you are using your existing resources to best effect. Once you have the appropriate software and names and addresses stored, here are some examples of how you can utilise your database more creatively:

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    About the author

     Rachel Alexander 's picture
     Rachel Alexander 


    Rachel Alexander is the WISE Self-Employed Woman of the Year 2000 for the South Island (ASB Bank Women Business Leaders Awards). She started her business, Alexanders Advertising in early 1997 offering sound marketing advice to accelerate their sales. The company’s services have now expanded to include a full design studio, specialising in tourism, brochures, web sites, direct and e-mail marketing, letterbox advertising and marketing coaching.