Database Marketing 101

Database marketing is a form of direct marketing using databases of existing or potential customers to generate personalized communications in order to promote a product or service for marketing purposes. By incorporating demographic collections into your e-mail-collection program and e-zine or newsletter publication campaigns, you can target specific demographic areas and market segments and personalize your campaigns. Database marketing has very specific characteristics that define it precisely. Most companies fail to meet all of these characteristics, but your goal should be to incorporate as many as you can into your database marketing program. These characteristics include the following:

Your marketing database should include repeat customers, onetime customers, potential customers, and new leads.

Record information about all your customers, including identifying information, how to contact the customer, information about any previous transactions, and any and all previous communication with the customer.

Every time a transaction takes place with the customer or a lead, all the information in the database should be available; this way, you and your company can decide how to successfully fulfill the needs of the customer.

If you have a large company and have hired one or more marketing specialists, they’ll use all of the information in the database to implement market divisions, making sure that your service or product is suitable for that division.

Effective database marketing works incrementally. This means that it incorporates any improvements that need to be made to ensure that the customer is satisfied. This includes improvements in the rate of response, referrals, retention rates, any cross-sales, and the occurrence of sales.

Successful communication with the customer is at the core of database marketing. When you have constant and beneficial communication with your customers, you ensure that they are happy. This increases your sales, builds trust and confidence, and encourages customers to refer your company or Web site to others.

The goals of your company are reflected in the way that you respond to your customers. This means that you have a clear and well-understood mission that is carried out in the way that you conduct your marketing program.

Concentrate your efforts on incorporating all of the above database marketing characteristics into your own marketing program. It may seem overwhelming to accomplish this at first; however, when broken down into milestones, you can achieve most of the characteristics for a successful database marketing program.

Benefits
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Database marketing allows you to understand the data that you accumulate so that you can effectively reach your customers and generate the sales and profits that you need to be successful. When you use database marketing the way it was meant to be used, you’ll reap the following benefits:

The ability to reach new customers and encourage them to try your products or services.

The ability to reach current customers by sending out timely communications to them.

Increased profits through more personal methods of communicating with your customers.

Increased satisfaction among your customers that instills a large level of trust and encourages future sales.

Increased potential of referrals from satisfied customers.

Reduced overhead and expenses because you can use an automated method of managing your communication with customers.

You can begin the practice of database marketing immediately using tools you already have and data you have already collected. The time will come when you will wish to consider streamlining and modifying your data collection, data storage, and data processing practices, but in the beginning, all you will need is your existing customer data set and the desire to maximize the efficiency of your marketing operations.

First, you will want to start the process of organizing the data you have. What kind of data have you been collecting? From whom have you been collecting this data? How is this data stored? You will need to answers these questions by inspecting your current data-collection practices and analyzing your data storage systems and techniques. Commonly stored information may include: