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How to build a customer database for your small business

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Building up a good customer database and email list can be crucial for the success of your small business's marketing campaigns.

If you're new to business and don't have a customer list, buying access to a database or email list is your only option.

It could also be the right choice if your current database lacks the depth to generate decent activity for your business.

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Buying access to lists and databases typically involves dealing with a third-party list broker.

List brokers specialise in the sourcing of existing lists or the creation of new lists tailored to your particular business needs. Creating a list from scratch can take a while so, if you want a bespoke list, factor that into your marketing campaign's time line.

A broker can match you with the owner of a list you wish to buy or rent.

The broker takes a commission from the owner for the service, according to Prospect Shop, a marketing agency, while you pay the owner for the use of the list.

As with a stockbroker, a list broker supplies you with information about the lists, quotes a price and answers any questions you have.

"Pricing for lists can range from a few hundred dollars to more than $5000 for a marketing list, depending on the type, quality, amount and length of time you want access to the data," says Luke Maddison, a marketing strategy partner at my consulting firm, Corpwrite Australia.

There are a number of ways to find a list broker. A good place to start is the website of the Association for Data-Driven Marketing and Advertising (ADMA), which provides list brokers' contact and company details. It also sorts list brokers by location and interest area.

ADMA has a code of ethics that members are required to adhere to, as well as a mechanism for dealing with complaints.

If you purchase a marketing list, the Australian Communications and Media Authority (ACMA) recommends you double-check that the consumers in the list have given their permission to receive marketing messages from third parties.

In the event that the ACMA investigates a complaint about your business's marketing practices, you must be able to demonstrate that such a consent exists.

This means that a simple assurance from your broker that the marketing list is an opt-in list or that subscribers have consented may not be enough. So if you have concerns, ACMA recommends asking questions such as:

  • How did the subscribers opt in to the list? If they filled in a form or entered a competition, ask for a sample so you can see exactly what fields they completed.
  • What exactly did the subscribers consent to? Ask to see any terms and conditions, and clarify what they were told when they signed up and if the consent specifically includes third parties.
  • When did the subscribers consent to be on the list? If they gave their information to the list broker years ago, will they really expect to receive marketing messages today?

"It's important that you can satisfy yourself that the database is reliable," says Maddison. "If you're not satisfied that the list broker can provide the information you require to get your message out, make sure you go back to them for further assurances or evidence."

Purchasing the marketing list without asking the right questions puts your business's reputation at risk, warns ACMA.

"You also run the risk of not complying with the Spam Act and being fined many hundreds of thousands of dollars for unsolicited direct marketing communication," says Maddison.

? This column is dedicated to my good mate, long-term Money columnist and Corpwrite business partner Chris Walker, who passed away after a long fight with bladder cancer in March 2016.

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Anthony O'Brien is a small business and personal finance writer with 20-plus years' experience in the communication industry.
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