Database marketing

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Database marketing

What is Database Marketing?

Database marketing is a form of direct marketing. It involves collecting customer data like names, addresses, emails, phone numbers, transaction histories, 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 pieces like brochures and catalogs and mailing them to a list of potential or current customers in the hopes it evokes a positive response.

Database marketing takes that strategy a step further by seeking to understand how customers want to be marketed to, and then applying those insights to fulfill the customer’s need via the best channel.

The Importance of Database Marketing

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

Benefits of Database Marketing

Today’s consumers expect a personalized experience with your brand. To deliver one, marketers need a unified view of each customer across every touchpoint. Only then can they understand the customer’s journey and engage them in a meaningful way. Database marketing strategies make that easier.

Customer databases can help you:

Identify customer groups – from your most loyal, high-value customers to first-time customers and occasional purchasers
Create detailed customer segments based on demographics, behaviors, or even personal interests
Design highly personalized messages for both current and prospective customers
Determine the best channel and time to engage customers
Improve your marketing efficiency by not wasting time and money sending campaigns to those who are unlikely to respond
Build effective loyalty programs that provide the right incentives for repeat purchases
Improve customer service by providing support staff with a 360° view of the customer’s interactions with your brand

Challenges of Database Marketing

Watch out for these database marketing challenges:

Data decay. Anytime a customer or prospect changes jobs or earns 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to a new address, changes their name, gets a new email address, or makes any other life change, their profile becomes out of date.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 at an average 2-3% each month, which means in just a year, a third of your data could be invalid.* To limit data decay, focus on information that is less likely to change: name and phone number, for example, rather than business email.
Data accuracy. Customers don’t always provide accurate information. Typos, handwriting legibility, or incomplete info can have a big impact on the quality of your database. You can limit inaccuracies by replacing input fields with standardized drop-down menus or checkboxes.
Acting on customer data in a timely manner. Collecting and analyzing customer data is just the first step. You have to act quickly enough to capitalize on a customer’s interest in and interactions with your brand. This is where marketing automation tools like CleverTap become so important.

Effective Database Marketing Strategies

Identify your target audience. How old are they? What income level? What job title? Where do they live? What are they interested in? What else do they buy? Build a detailed ideal customer profile for your product, and then use this profile to decide what kind of information you need to include in your database.
Collaborate with other teams. Marketing, sales, and support all have direct contact with customers and prospects. What information does each team need to be effective?
Find the right software. Customer data doesn’t do anyone on your team any good if they can’t access it. Choose a tool that makes it easy to see different kinds of information, customer types, and even organize customer information to match your different product or service categories.

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