Back in the early 1990s, the New Jersey Nets — the NBA team that’s now the Brooklyn Nets — had a rather clever way of cutting costs:
Each season, they saved on hard drive space by deleting the names of the previous season’s ticket holders.
After all, who’s got space for all those names, addresses, and phone numbers of people who had paid thousands of dollars for season tickets?
Besides, if anybody had not renewed their season ticket this year, then what was the point of keeping their contact data? The Nets could just go out and run TV ads or radio ads or maybe go knock door-to-door to fill any unfilled seats.
Maybe my tone is not sarcastic enough, so let me make it clear:
If you do a good job selling to a cold audience — to people who have never bought from you before — you can hope for about a 2% conversion rate.
In other words, 1 out of every 50 strangers might decide to give you some money, carefully, guardedly.
On the other hand, if you do a modest job selling to a warm audience — to people who have bought from you before — you can hope for about 20% to 50% conversion rate.
In other words, 1 out of 5 people might decide to give you more money, or it might be as high as 1 in 2. Plus, the selling tends to be easier, and the price more flexible.
All that’s to say, the Nets’ habit of regularly deleting customer records was an act of criminal negligence. It probably cost the organization millions of dollars in profits over the years.
Of course, it’s not much less negligent to save customer records and never do anything with them.
One ecommerce client I worked with had a database of about 150,000 buyers. It just sat there inside Shopify, while the client worked furiously to optimize Facebook ads and bring in more new customers.
But you see where I’m going with this, so let me wrap it up:
Step one is to stop wiping your hard drive clean and throwing customer records away.
Step two is to start selling those customers.
If you want to get it done for you, write me and maybe I can help. Or if you want to get it done yourself: