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How valuable is your customer database?

Last updated July 9, 2013

Most of the business owners I work with want to sell their business, for lots of money and retire. Family businesses generally have a different agenda but whatever your goal you need to build value in your business. You might find that you need to raise debt or equity funding and that’s where value becomes critical.

Most accountants will tell you that the balance sheet or P&L is more important than value. It is important but in my view the business is only worth what someone is prepared to pay for it. That ‘worth’ is made up of assets and goodwill that a purchaser can rate.

Related Article: Building Valuable Business Assets

One of the most valuable assets you have in your business is the customer database. When companies go out of business, top of the ‘for sale’ list for the liquidators, is the customer database. Why? It is a physical asset that has future value that others are prepared to pay for, sometimes handsomely.

This valuable database will have been built over a long period; you will have worked hard to attract and retain those customers. You will have been securing a valuable repeat income from them and that is what makes them valuable to someone else.

What type of databases will you have?

  1. Customers who have purchased
  2. Customers who have enquired, but not purchased
  3. Customers who have purchased more than once. These are your brand advocates.
  4. Customers where you have long term contractual agreements in place
  5. Those customers who pay you a regular monthly subscription, fee or service payment
  6. People who have signed up for your newsletter, mailing list or promotions
  7. People who have attended your events
  8. Follows on Twitter and Pinterest, likes on Face book, even your businesses connections on Linked In.

Having all these customers on your database(s) is not enough. To obtain maximum value the database must have clean, accurate and up-to-date contact details as well as purchase history. Duplicates act as a black mark so the regular cleansing of the database is one of those marketing hygiene tasks that should not be overlooked or put on the ‘tomorrow will do’ pile.

If you want to add value to your business, perhaps your customer database should have the once over, now?

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Shirley Mansfield
Master Business Problem Solver

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