Customer Database Construction: Contacts and Management Software

A customer database is a cornerstone of an effective lead generation and customer conversion strategy. This chapter, “Building a Customer Database: Contacts and Management Software,” aims to provide the scientific knowledge and practical skills necessary to design, build, and maintain a strong and effective customer database.

The importance of building a customer database is based on the principles of Customer Relationship Management (CRM), which emphasizes that understanding customer needs and expectations, and communicating with them effectively, is the basis for success in a competitive market. Statistically, companies that use CRM systems effectively achieve higher customer retention rates and increased revenues. Analyzing customer data provides valuable insights into consumer behavior and market trends, helping to make informed marketing and strategic decisions. This chapter is based on the latest research in CRM, focusing on best practices in data collection, storage, and analysis.

This chapter will address the essential aspects of building a customer database, starting with identifying potential contact sources, collecting relevant data (names, phone numbers, addresses, email addresses, contact notes, source, group, status, contact type, and other relevant information), and selecting appropriate Customer Management Software (CMS). Emphasis will be placed on maintaining data accuracy and continuous updating. Key features that should be available in a CMS program will be reviewed, including contact information management, address book data import and export, transaction management, calendar and appointment scheduling, email integration, and report generation. How to segment customers into groups based on various criteria (such as interests, purchase history, geographic location) to enable more effective marketing targeting will also be discussed.

Building a customer database is a cornerstone of a successful lead generation strategy. It’s a system that grows and helps build relationships with potential and existing customers❓, leading to increased sales and marketing goals.

The first law of lead generation: “Build a Database”.

Contacts are the core component of the customer database, representing potential business opportunities. Accurate and comprehensive contact information increases the chance of effective communication and conversion.

Essential Contact Information:

1. Full Name: For personalized communication.
2. Phone Number: (Home, Mobile, Work, Fax) Essential for direct communication.
3. Email Address: Effective for digital marketing.
4. Home Address: Important for geographic marketing and direct mail.
5. Notes on Previous Correspondence: To understand customer needs and preferences.
6. Source: To evaluate the effectiveness of marketing channels.
7. Database Group: Categorizing contacts (e.g., “Potential Buyers,” “Potential Sellers”) for targeted messaging.
8. Active Status: Whether the customer is actively looking to buy or sell.

9. Status Level (A, B, C): Rating customers by conversion probability (A: very likely, B: potential, C: unlikely currently). Prediction models can be used:

   • Prob(Conversion) = f(Interaction Frequency, Recency, Engagement Level, Lead Source Quality)

   Where:

   • Interaction Frequency: How often you interact with the customer.
   • Recency: How recent was the last interaction.
   • Engagement Level: How much the customer engages with your marketing messages.
   • Lead Source Quality: The quality of the customer’s source.
     10. Contact Type: Categorizing contacts (e.g., “For Sale By Owner FSBO,” “Expired,” “PTA”).

Additional Information for Inner Circles:

For contacts in your inner circles (friends, family, important clients), gathering extra information can strengthen the relationship:

1. Date of Birth: For sending personal greetings.
2. Spouse/Children’s Birthdays: To show interest in the family.
3. Children’s Names: To show personal attention.
4. Anniversary Date: To congratulate customers on special occasions.
5. Hobbies: To connect with customers on shared interests.
6. Job Title: To understand the customer’s professional status.
7. Company Name: To know where the customer works.

This information helps build strong personal relationships, increasing loyalty and referrals. This data should be recorded in the calendar with reminders to contact customers on important dates.

Database Updates:

Regularly update the database, especially after a transaction or business plan completion.

1. Update Contact Information: If phone number, address, or email changes.
2. Update Category and Group: To correctly classify the customer after the transaction.
3. Update Plan: If the customer is under a specific business plan, update it after completion.
4. Update Notes: Record all important notes about any correspondence with the customer.

Customizable Fields:

Advanced CRM programs offer customizable fields for recording additional customer information. These fields aid in quickly searching for customers with specific characteristics and sending customized marketing messages. Examples include:

1. Buyer/Seller Specialist working with the client.
2. Closing Year.
3. Cooperating Agent.
4. Referring Agent.
5. Investor.
6. Adopted Buyer (a non-team buyer who bought a property listed by the team).
7. Sale Price.
8. Home Description.
9. Interest Rates.
10. Loan Type.

Customer Relationship Management (CRM) Programs:

Effective lead generation depends on database size and efficient management. Managing a large number of contacts for high-level lead generation requires CRM software.

Benefits of CRM:

CRMs (like Top Producer, Online Agent, Act, Salesforce) enable effective database utilization for lead generation. A computerized contact database offers the following advantages:

1. Fast Contact Access for Email Marketing: Sending bulk emails quickly and easily.
2. Facilitate Direct Mail: Print labels or export the database file for desktop direct mail service.
3. Central Location to Store All Contact Information: Enables multiple people to access the database simultaneously.
4. Create Processes/Campaigns/Plans for Team Members: Automate tasks and activities related to lead generation.
5. Sync with Mobile Devices and Web Versions: Access the database from anywhere, anytime.

Choosing the Right CRM:

When selecting a CRM, consider database size and usage frequency. Statistics indicate that top real estate agents have an average database of 3600❓❓ contacts and use it daily. These agents add an average of 17 new contacts per week and remove 7. A CRM program is essential to manage a database of this size.

Basic CRM Features:

Any CRM program should include:

1. Contact Information Management: Fields for detailed contact information, including birthdays, professions, hobbies, and children’s names. Look for customizable contact fields. Detailed records of correspondence with each contact should also be kept.
2. Address Book Import/Export: Avoid re-entering existing contacts manually when switching contact managers by importing them in a single file. Similarly, ensure easy export of contacts from the new contact manager for backups and outsourced direct mail pieces.
3. Transaction Management: Assign tasks to assistants, store contracts, and track listings, closings, and other transactions. Integrating these functions into the contact management system can reduce double and triple data entry.
4. Calendar and Appointment Scheduling: Record upcoming and recurring events in the calendar, schedule appointments with other team members, and remind yourself of these events and appointments. The 8×8 and 33 Touch plans should feed into the calendar for automated❓ reminders to contact customers at specified times.
5. Email Integration and Automation: Integrate contacts into bulk emails for marketing and recruitment, either one piece at a time or in a pre-programmed email campaign.

Additional Features:

Premium programs offer features like:

1. Reports: Used to analyze different areas of the business, such as marketing campaign effectiveness or the seasonality of listings.
2. Marketing Materials: Integrate contacts into.

Building and managing a customer database effectively with CRM programs is a necessary investment for business success. Collect and regularly update the correct information, use appropriate CRM software, build strong customer relationships, and convert leads into repeat customers, increasing sales and achieving marketing objectives. A customer database is a valuable asset.