By Christopher Niesche - smh.com.au

EVERY small business should have a prospect list - a database of existing and potential customers where the business can focus its marketing efforts.

But it needs to be more than just a list of names and email addresses. It has to contain people who are in the target market for your products.

Here are tips on how to build up a prospect list.

Use Twitter and LinkedIn: Communicate on topics that relate to clients and drive them to your website for a newsletter or free e-book to capture their contact details. ''Constantly engage with them,'' says Marketing Eye founder Mellissah Smith. ''I'm in marketing, so I'll retweet people who have written blogs or news articles on being an entrepreneur, or social media or advertising, but at the same time we'll have commentary of our own on how to use your social media in a meaningful way.''

Hold competitions: Using Twitter and LinkedIn works well if you're in the business-to-business market. To build up a consumer database, engaging on social media and holding a competition is effective, says Smith.

Ask questions: When you're capturing data, ensure you have enough information about prospective clients to be certain you're targeting the right people. Ask a couple of questions when people register online.

Understand your customers: ''When you better understand what your customers look like, you have a better understanding of where to allocate your marketing or your resources to find more people who look like them,'' says Jeff Healy, of customer engagement consultancy Monkey Logic. For instance, use existing customer data to probe things like customers' age and gender, their location and income, and the products they buy.

Buy contacts: If you don't have the time or resources to build your own database of prospects, you can buy a contact list of people with similar characteristics to customers.

Referrals: Current customers are a good source of referrals to new customers. ''With the advent of social media, you have the ability to get very positive word of mouth through many channels, simply by asking customers for referrals,'' says Healy.

Create content: Create useful and compelling content that looks at the solutions your business offers to entice potential clients to your website to give you their details.

Public speaking: Go to events where potential customers can be found and make a speech. Business coach Deb Pilgrim specialises in advising women in small business, so she often approaches women's networking groups or business clubs to see if they'd like her to speak. She collects potential customers' details by asking them to sign up for a free e-book or the like.

Read more: The Sydnye Morning Herald