Developing and maintaining a database is very important

A database is more than a simple list of names and addresses. What turns a list into a database is the additional information, coupled with your ability to select names from or report on the list using any combination of data elements.

BENEFITS OF A DATABASE

By maintaining your list as a database, you can segment in many ways for targeting. Targeting improves the productivity of your offers. You can use a database to isolate the segment of your list most likely to respond to a particular offer. With a good database, you're not "mass-mailing" your offer to parts of your list that may have no interest in it (based on their characteristics). Because the number you're mailing is smaller, your response rate (number responding/number mailed) - one measure of productivity - should be higher. (And, of course, you'll save on printing and postage costs.)

Here are two simple examples of targeting using database information:
1. You're the owner of a neighborhood General Store. For each customer, you keep a record (with dates) of all the services you've provided to that customer. You're planning a special pre-summer promotion on permanent waves for the month of May.

Instead of mailing an announcement of the sale to your entire customer list (many of whom don't have their hair permed), you select only those customers who had a permanent at least three months ago. In this way, you're targeting those customers who are most likely to take advantage of your upcoming sale.

2. You're the dinner chairperson of a local fund-raising organization. Your mailing list is made up of a wide range of contributors, from those who've donated only a few dollars to those who give annual gifts of thousands of dollars. For each contributor, you maintain a record of all past donations and functions he/she has attended, in addition to basic mailing information. This year, you're asking for donations of $100 a plate for the annual dinner dance. To get the best response to your invitation, you first target those contributors who were at last year's dinner dance. Then you target those who weren't at the dance, but who donated more than $100 in the past year.

Depending on the response you expect from these first two groups, you may next want to target those names on your list that didn't attend the last dance, but contributed $50 in the last year. You may even want to have a phone follow-up to the first two groups but use the mailing only for the third group.