What is Database Marketing and Why it’s important

 Database marketing

Database marketing is a form of direct marketing. It involves collecting customer data such as names, addresses, emails, phone numbers, transaction history, customer support tickets, and so on. This information is then analyzed and used to create a personalized experience for each customer or to attract potential customers.

Traditional direct marketing involves creating direct mail items such as brochures and catalogs and mailing them to a list of potential or current customers in the hope that it will elicit a positive response.

Database marketing takes this strategy a step further by seeking to understand how customers want to be marketed, and then applying that knowledge to fulfill the customer’s needs through the best channel.

Importance of database marketing

Today’s marketers have access to more customer data than ever before. This is why database marketing is becoming so important again. It’s all about harnessing that sea of data to create more relevant marketing messages that better resonate with customers – current and potential.

Advantages of database marketing

Today’s consumers expect a personalized experience with your brand. To achieve one, marketers need a unified view of each customer across all touch points. Only then can they understand the customer’s journey and engage them in a meaningful way. Database marketing strategies make it easy.

Customer databases can help you:

• Identify customer groups – from your most loyal, high-value customers to first-time customers and occasional customers

• Create detailed customer segments based on demographics, behavior, or even personal interests

• Design highly personalized messages for current and potential customers

• Determine the best channel and time to engage customers

• Improve your marketing effectiveness by not wasting time and money sending campaigns to those who are unlikely to respond

• Create effective loyalty programs that provide the right incentives for repeat purchases

• Improve customer service by giving support staff a 360° view of customer interactions with your brand

Challenges of database marketing

Database marketing offers some compelling benefits – but to be successful, marketers must also understand the challenges.

Beware of these database marketing challenges:

• Data decay. Whenever a customer or prospect changes jobs or gets a promotion, moves to a new address changes their name, gets a new email address, or makes any other life change, their profile becomes out of date. A well-managed database decays by an average of 2-3% each month, meaning that in just one year a third of your data could be invalid.* To reduce data decay, focus on information that is less likely to change: name and phone number, for example instead of a business email.

• Data accuracy. Customers do not always provide accurate information. Typos, handwriting legibility, or incomplete information can have a big impact on the quality of your database. You can reduce inaccuracies by replacing input fields with standardized drop-down menus or checkboxes.

• Immediate action based on customer data. Collecting and analyzing customer data is just the first step. You need to act fast enough to take advantage of customers’ interest in and interaction with your brand. This is where marketing automation tools like Clever Tap are so important. By uniting rich user profiles with a powerful segmentation and Omni channel marketing campaigns, you can deliver timely and personalized experiences to each user.

Types of database marketing

Database marketing can take two forms, consumer database marketing, and business database marketing. The difference between them is the target audience.

Consumer database marketing is used by businesses that sell directly to consumers or B2C organizations. Data collected in consumer database marketing includes names, email addresses, phone numbers, addresses, gender, and location. To obtain this information, the organization may implement giveaways, contests, account registrations, or free shipping offers. Once this information is stored, it can be used to send personalized mail or emails to consumers.

Business database marketing is used by organizations that sell directly to other businesses or B2B organizations. Data collected in business database marketing includes information such as company revenue, names, emails, phone numbers, job titles, website cookies, and purchase history. B2B organizations would like to collect such data through LinkedIn, event registrations, whitepaper downloads, industry reports, demos, free trial offers, or webinars. Once this data is collected and stored, the organization can begin marketing through benefits emails or targeted social media ads. Account-based marketing will help maintain a small, detailed business database.

The database used for marketing a business database may be smaller than a B2C database. Organizations that use business database marketing can only focus on large target accounts, so there is no need for a large database to store large amounts of customer information.

Database of marketing tips and strategies

  

There are many tips and strategies regarding database marketing. Basic tips include, for example:

• Know the audience it is being marketed to. If an organization lacks detailed customer profiles, it may not have a well-informed view of who its potential customers are.

• Know the data that will be most useful to collect. This could be information such as demographics, activity, or transaction history.

• Respect customer privacy. Personal information found on social media is easy to find, and having enough identifying information could be helpful, but potential customers will not like having so much personal information stored about them – especially without their knowledge.

• Collaborate with other internal teams. Sales, support, and marketing teams will have all the customer information to collect as they often work directly with customers.

• Use marketing software. Software tools should help make it possible to display different data points at once, display customer types, or organize data by service and product categories.

• Keep data as current as possible. Information can deteriorate very quickly when people move, change jobs and email addresses, or make other life changes. It is important to value information that is not likely to change often over information that will.

• Implement strategies such as multi-channel marketing or predictive analytics.

Examples from life

A few examples of database marketing would be an e-commerce application that uses transaction history data to better and quickly assess a customer service call, or a food delivery application that uses transaction data to determine when a customer is most likely to order from them. . However, some real-life examples of database marketing can be found on Facebook, Amazon, and Netflix.

• Facebook will segment user data by name, email, phone number, gender, date of birth, location, and interests. This allows Facebook to create personalized experiences for its users and information for marketers.

• Amazon will collect data such as what users have viewed purchased, or added to wish lists. Amazon then compares this to what other users have purchased and uses the resulting data to try to sell new items to the potential buyer. This process creates a recommendation engine that is based on consumer behavior.

• Netflix will track data about what shows and movies a user watches and then compare that data to what similar users have watched to make recommendations.