How to build a customer database and attract new customers?

Most businesses spend a large share of their marketing budget on attracting new customers. Yet many visitors leave the website without making a purchase, so the money spent on advertising is lost. Effective customer acquisition rests on a contact database the business owns itself. The database lets you get back in touch with customers you have already gained, even after an advertising campaign has ended. This article explains why a business needs its own customer database and how to grow it in line with GDPR.

Why does a business need its own customer database?

Advertising costs on social networks, Google and other digital marketing channels keep rising. How many people a business reaches on these platforms is set by the platform algorithms, which the business cannot influence.

With its own contact database, a business no longer depends on platform algorithms to reach customers. Email addresses and phone numbers that customers leave themselves stay with the business, so the business decides how often it writes and what it sends.

Attracting new customers costs far more than retaining existing ones. Your own database lets you notify existing customers regularly with offers based on their earlier purchases. The business then does not have to rely only on the flow of new customers coming from advertising.

How to attract new customers?

Customer acquisition needs a specific offer that a person receives in exchange for their email address or phone number. Without one, it is hard to attract customers because nobody leaves personal information without a reason. The most common ways to attract customers are the following.

A worthwhile offer

A discount code or free delivery for new subscribers in an online shop gives a person a reason to leave contact details and make a first purchase right away.

Useful content

For a service business, content given in exchange for an email address works well, such as a price estimate or a short guide. This way you gain potential customers who are already interested in the service but still weighing up their options.

Order notifications

Customers most often leave a phone number in exchange for order notifications, such as a confirmation or delivery time. With the customer’s consent, these numbers can later be used for offers as well.

Interactive games and prize draws

Online games or so called prize wheels, which website visitors can play conveniently and interactively, work very well for building a new database. Prize draws work well in physical retail, where customers fill in registration forms to take part.

Where to collect new customer contacts?

A sign up form on the website

A sign up form gets the strongest response in the most visited sections of a website. The fewer fields there are to fill in, the more people finish the sign up, so one email address or phone number is often enough.

A registration pop up

A registration pop up appears when a visitor takes certain actions, such as getting ready to close the page or staying on the site for a while. It holds an offer that benefits the customer, in exchange for which they can sign up for notifications.

The checkout stage

A buyer who is already entering order details can agree to receive news and offers with a single click. This way the database gains people who have already bought from you and are ready for offers.

Games and competitions

A person takes part in an interactive game or competition by leaving an email address or phone number, so the business collects a customer database in a short time. People tend to share such competitions, so they reach more customers than usual.

What are the GDPR requirements for collecting contacts?

Collected contacts may be used for offers and news only with the person’s consent, which has to meet three GDPR requirements.

Freely given consent

The person must agree themselves that they want to receive notifications. This choice must not be ticked for them in advance.

A clear purpose

The sign up must state what kind of messages the person will receive.

The option to opt out

Every notification must state how to stop further communication. After an opt out, that contact is no longer used.

A customer database where customers have given consent to receive notifications and offers produces better results because the messages reach people who want them.

How to increase sales with a customer database?

Collected contacts deliver results only when the business has a clear plan for using them, so collecting contacts is only part of a customer acquisition strategy. Regular offers encourage existing customers to buy again, so over time the database becomes a steady source of sales.

Customer segmentation

Grouping contacts by purchase history or interests lets you send each customer an offer that suits them. When an offer matches the customer’s needs, it brings more purchases than one message sent to everyone.

Choosing the right channel

Each channel has its own strengths. SMS suits short and urgent information, while email suits broader content with images and descriptions. The two channels complement each other and together reach the customer in different situations.

Preparing messages in advance

Messages can be prepared in advance and sent at a set time or after a specific customer action, such as a purchase. The marketing strategy sets how often each customer group is contacted and with what content.

Over time some of these customers become loyal customers who return without extra advertising costs.

What are the most common customer acquisition mistakes?

Three mistakes recur most often in customer acquisition, whatever the industry.

A purchased customer database

Purchased contacts have not consented to receive your messages, so sending to them breaches GDPR and damages the sender’s reputation. Value comes only from contacts who have signed up themselves.

A registration form that is too long

Every extra field reduces the number of people who finish the sign up. More information about the customer can be gathered later, once they have made a purchase or taken a specific action.

Contacts that receive nothing

Collected contacts lose their value if the business does not use them. When the first message arrives only after several months, the customer no longer remembers when and why they signed up, so they often opt out of further notifications. Customer acquisition is affected by how quickly and how regularly a business starts contacting the collected contacts.

Start building your customer database

NESS provides tools for collecting customer contacts, including sign up forms and dynamic registration pop ups, as well as SMS and email channels for reaching existing customers. Contact us to build a customer database together and to develop a customer acquisition strategy that suits your industry.