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How to build a better customer database.

"One of the most valuable assets on your balance sheet," says T/Maker chief operating officer Andrew Preston, is a well-maintained list of registered users. We consider the value of our registration base to be worth more than everything but the value of our source code. It's greater than the value of our receivables, it's greater than the value of our inventory--in fact, I'll argue that it's greater than both of these combined."

At OpCon West, Preston offered these tips for developing and maintaining a customer list:

* Never miss a chance to collect names: We actually get only

about half our names through registration cards," says Preston.

T/Maker collects the rest from direct mail and telephone sales,

tech support calls, and joint promotions. If you are creative

in your negotiations up front when you do an OEM deal, you can

sometimes extract the names and addresses of everyone who bought

your product."

* Use premiums to boost response rates: By offering customers a

valuable premium--such as free software--Preston says it's

usually possible to boost registration rates dramatically. For

example, he says a $300 lottery that T/Maker runs three times a

year produced a 20% increase in registration rates for each of

the company's two best-selling products.

* Be selective about incentives: Preston says he generally doesn't

offer registration premiums to T/Maker's direct response

customers, since the company already captures their names and

addresses as part of the sale. As a result, he can spend more on

incentives for retail customers, whose registration cards are

the most difficult to get."

* Try to capture "lost" users: Don't write off customers who never

registered their copies, Preston says. Though it's expensive,

many of these users can be lured back into the fold through

magazine and direct mail offers. Even pirate users are worth

uncovering, he adds, because many will buy upgrades and add-on

products. If you have 50,000 good registration cards, you

probably have another 250,000 users out there you don't know how

to find."

* Encourage telephone registration: A good time to capture

unregistered users is when they call in for tech support, says

Preston, though getting tech support people to take names and

addresses is tough." One solution: Use lower-skilled customer

service people to screen all calls and collect basic information

before turning the caller over to a support technician.

* Keep the registration card simple: Adding lengthy market

research questions is a sure-fire way to kill response rates,

Preston argues. Usually, customers will answer one or two

questions without resistance; above five, "they won't fill it

out," he says.

* Invest in good list maintenance: It's amazing how often people

move," says Preston, who estimates that almost half of most

customer names will be undeliverable after two years. To keep

its lists up to date, T/Maker sends "Address Correction

Requested" mailings to all of its registered customers at least

twice a year. In addition, T/Maker manuals include a change of

address form. "We get those back," he says.

* Keep testing: Registration cards are like direct mail, says

Preston--it's easy to test different offers, and keep pushing

response rates up by selecting the winners. "I do not believe an

85% registration card response rate is unreasonable," he says. Andrew Preston, chief operating officer, T/Maker Co., 1390 Villa St., Mountain View Calif. 94041; 415/962-0195
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Title Annotation:chief operating officer; advice from T/Maker COO Andrew Preston
Article Type:Brief Article
Date:Mar 23, 1992
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