How To Use the 60-30-10 Database Marketing Formula To Increase Profits

The definition of database marketing is doing more with customers you already have. That’s a very simple definition, yet necessary, because a lot of businesses focus on getting new business while neglecting their current customers.

To implement effective database marketing, use the 60-30-10 direct marketing formula for success. Its components are:

1. Your list – which contributes 60% to your marketing success

2. Your offer – the copy or message and whatever you’re promoting which contributes 30% to your success, and

3. Everything else – for example, email vs. direct mail, 4-color vs. 1-color, sent on a Monday vs. a Saturday, etc. All of these factors only affect the outcome by about 10%.

If you focus on combining “everything else” with “the offer,” you make only a 40% impact. Yet many business marketers fret over picking out the perfect PMS color, while ignoring the bigger, more important issue of their target audience.

Instead, invest time in segmenting your customer list-niche it down–to make it more targeted. Then match and personalize your offer to make it very special for that targeted segment. The result: 60% + 30% = 90% impact!

The best way to maximize these results is to use database marketing with a customer list. We all know it’s 10 times easier to sell an existing client than it is to find a new one. That conventional wisdom is not disputed.

So the first step in creating your database marketing system is to reach out to people who have done business with you before. Perhaps, they’re not doing business with you right now, but they’re still your customers. They’ve spent money with you. They have a history with you, and they know who you are. Customers are more valuable to your business than a new prospect. This is the profit zone.

Only after you’ve exhausted all opportunities for database marketing to customers should you consider adding the next tier of profitable lists: prospects who behave most like your current customers. The further you stray from your customer database profit zone, the less likely your database marketing campaigns will succeed and the more expensive it will be to attract new customers.