How Long Should You Keep Contacts in Your Database?

I’ve found that companies often remove people from their databases far too soon–especially considering the potential lifetime value of the prospect and his company.

If your customer buys your type of product only once in a lifetime, then keep him on your database only until he buys from you or a competitor. If the contact repeatedly buys the kinds of products or services your company provides, however, consider leaving the person on your database forever. Or leave the contact on your list for as long as you know you can still cost-effectively get your marketing messages through to him by mail, e-mail, fax, or phone. When I’m providing direct marketing solutions, my clients frequently tell me that they are now closing first sales from prospects who have been on their databases for two, three, four, or more years.

One way to determine if keeping prospects and customers on your database for a long time is cost-effective is to compare the annual cost of database marketing to one prospect or customer with the cost of finding a new prospect or customer. For example, if your company spends an average of $250 to generate an inquiry but only $25 a year to keep in touch with each contact through database marketing, you could afford to keep the prospect or customer on the database for up to 10 years for the same cost.

If you’re going to keep contacts and companies on your list for a while, I suggest that you occasionally ask the contacts if they still are interested in hearing from your company. Tell them that if they don’t respond, you’ll remove them from your list, then remove those who fail to respond. Better yet, keep the nonresponders’ records for statistical purposes but code them to be suppressed when pulling lists for mailing, faxing, e-mailing, or calling.

M.H. “Mac” McIntosh is president of North Kingstown, RI-based b-to-b marketing consultancy Mac McIntosh.