Cover Your Bases

Managing The Beast

Depending on the size of your database, you can likely manage it in-house. Whether you use contact management programs like ACT! 2000 or GoldMine, an off-the-shelf database software package like Access 2000 (Microsoft, $339 street) or a custom-designed program, you'll need to decide what information will be most useful to you. According to Chachko, the most critical information for all entrepreneurs includes such basics as company names and addresses; contact names; phone and fax numbers; and e-mail addresses. Other important information to consider includes sales history, seasonal needs andpreferred products or services.

However, Chachko suggests entrepreneurs go a bit further in their fact-finding. For businesses that market to consumers, it's also important to capture information about the size of each customer's household and his or her occupation, hobbies, favorite media, likes, dislikes and other lifestyle information. For business-to-business marketers, gather information about the size and industry of the customer, the level at which buying decisions are made and other details, such as the business's own purchasing process and seasonal product consumption.

"This gives you a template to go out and find other customers just like the best customers you have now," says Chachko. "Such information allows you to understand who's buying your product or service and where to find them."

Gathering the data can be as simple as providing an on-site questionnaire, creating a form on your Web site, or requiring your sales or customer service staff to collect information. If asking your customers lots of questions makes you uncomfortable, you can turn to outside sources for help. Large information-services companies, such as Experian Information Solutions Inc. (http://www.experian.com) or Harte-Hanks Data Technologies (http://www.hartehanks.com), can provide much of the information you need, for a varying fee.

These companies warehouse huge national databases compiled from such varied information sources as warranty cards, online questionnaires, magazine subscriptions, telephone surveys and public records. Often, you can supply basic information, such as names and addresses, and these services will provide you with additional background, including interests, shopping habits, credit cards, magazine subscriptions and the like. Such information is usually priced on a per-thousand basis at $50 to $200 as the criteria get more specific.

As your database grows, it's important to limit access to it for several reasons. First, having too many employees who don't fully understand the format of the database or the protocol of entering information could potentially damage the integrity of the data. In addition, a good database is an important company asset--if an employee moves on to one of your competitors with a copy of your database, the consequences could be devastating. Similarly, if you contract with an outside database management or marketing company to manage your database, consult with your attorney to add a confidentiality clause to your contract.

Gwen Moran is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).

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This article was originally published in the February 2000 print edition of Entrepreneur with the headline: Cover Your Bases.

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