Be Specific Data mining gives you the ability to create and deliver marketing messages that are finely tuned to the specific interests of a given consumer segment. Rennekamp, for example, sends the same quarterly newsletter to all segments, but customizes his message to each with a letter insert.

Ohio Energy/Improveit Home Remodeling mixes twice-a-year phone contact with extensive direct mail efforts to, in Leader’s words, “stay in front of them so that we can generate the business before someone else gets it.” The scripts that his marketers use are highly personalized. When calling previous customers, for example, they know the work that has already been done, as well as particulars of the house — original siding or not, what type of windows it has — so they can cross-sell or talk about new products or promotions in a way that addresses the customer’s particular needs.

Database marketers say their marketing is most effective when it’s precisely targeted. But it doesn’t have to be to add dollars to the top line and profit to the bottom. What’s essential is maintaining some kind of regular contact with the names in your database.

Patrick Lanaghan, owner of The Window Replacement Co., Winchester, Va., mails a newsletter with the same content to all the names in his database four to six times a year, even though he collects a wealth of information from his Web site that he could use to segment his audience. His marketing typically includes a price-off installation on Four Seasons sun-rooms each January.

This January, having been data mining for less than two years, he worked his database (of just 1,200 names) to good effect by sending a letter and two postcards, followed by a phone call to every contact. “I was looking for $190,000 in sales in January and my guys did $410,000. They attributed all of the increase to that program,” he says.

Clearly, database sales can have a dramatic impact on lead costs. “We sell 37% of first-call leads at a lead expense between $225 and $245,” Sonner says. “Properly set rehashes sell at 64% with a lead cost of between $145 and $170.” Those rehash leads have a higher combined cost, but it’s less than a new lead and the leads close at almost twice the rate, giving the greatest return for the cost, Sonner explains. Schulz says that his data mining generates $453 additional net sales per lead issued and lowers his overall marketing costs from 20.5% to 12.9% of sales.

Software Solutions Although it may be possible to manually manage a database, it’s not practical. All the contractors mentioned here use software for lead management, marketing, and in most cases, to manage their businesses end-to-end as well. “We know everything about our business in real time so we can really drive the business,” says Leader, who reviews detailed reports on call center, sales, and installation activity daily. With this information he can benchmark any business activity and replicate best practices to make the business faster, more efficient, and more consistent.

Implementing database management can be relatively simple, though it’s a process that can and should be done over time. Moreover, pulling it off requires preparation. Every person involved needs to understand its importance to the business and their role in it.

“This is a marketing function. It’s not just data entry,” Musch says. “Management has to make people understand that this is a serious thing going on in the office and that these computers are a powerful tool for our marketing.” Most important, contractors and others say, is that management thinks the process through upfront. It plans and sets goals.

“We spent a lot of time as a company asking what we wanted to get out of this,” Rennekamp recalls. Managers at Energy Swing thought about the kind of direct mail they wanted to do, how they would want to segment it, and the various categories that leads would fall into, he says. Even with that effort, Rennekamp finds that he wants to collect and store new types of information — such as product sold by county in the six counties where the company does business — and that the software he uses (MarketSharp) is flexible enough to allow him to do that.

In a business where you live or die on leads, contractors who mine their data say it’s the key to long-term survival.

“I’m afraid the guys who aren’t willing to change are going to be left in the dust,” Schulz says. “I can’t see a business operating on a simple paper-tracking method with the technology we have today. How does a guy run a profitable business if he can’t look at a report every day and know whether or not his lead costs are what they are supposed to be or if he’s making money?” —Jay Holtzman is a freelance writer based in Jamestown, R.I.