A Profitable, Powerful Tool for Your Business: Database Marketing


The term database marketing refers to the systematic approach of gathering, consolidating, and then analyzing and processing consumer data. Data is analyzed both for current customers and potential customers and is maintained in a company’s database. Databases in themselves have been used to store customer data for traditional marketing for some time; the database marketing approach differs in the fact that much more consumer data is maintained, and also that the data is processed and utilized in more sophisticated ways. Marketers can use the data obtained through databases to learn more about different customers, select target markets for specific products or marketing campaigns, compare individuals or groups of customers’ value to the company, and provide more personalized or specialized offerings to customers. The key is that instead of just having a mailing list of prospective customers or a single list of current customers, businesses can use technology to evaluate and manage the information more precisely.

One of the main goals of database marketing is to promote a product or service to customers with personalized marketing. The method of communication in database marketing can be through any medium. The concept emphasizes the use of statistical techniques to develop models of customer behavior, which are then used to select customers for communications. The more information a business has about its customers the better; having a greater amount of data about customers increases the likelihood that a more accurate marketing model can be built.

In an effort to more effectively target potential customers, many enterprises use database marketing to build models of their target demographic group, track down these groups and focus their advertising budgets on them in the hope that it will result in an improved return on investment (ROI) from their advertising. Information about customers can be gathered either from internal sales data or bought in from other methods or organizations. With the advancement of the internet, more mediums to gather consumer data have come along. Many people are comfortable completing electronic forms for everything from online purchasing to online surveys to setting up e-mail accounts; thus, the amount of consumer information available to companies has increased greatly with the growth of the internet.

Historically, database marketing relied overwhelmingly on direct mail. Due to advancements in communications technology, however, now there are many advertising mediums to choose from- from telemarketing to e-mails to the internet. Every small business should keep a database of customer names, contact and transaction information. While many larger companies rely on expensive programs to fulfill this need, a sophisticated program is not needed to do this (particularly for small businesses). Microsoft Excel, for example, could be used as a customer information database compiling tool.

Especially for small businesses, building lasting customer relationships is key to a business’s success. Business’s return rate on marketing dollars spent can be drastically increased with targeted marketing efforts. A good rule to follow for database marketing is spend the most money hitting a business’ best customers repeatedly, but to also save some money to experiment with new target groups. Success doesn’t hinge on the size of a business or even necessarily its available resources. Successful businesses master an ability to collect, to store, and then to target and use customer and prospective information effectively.


Source by Kelly Dotseth