Database Marketing

8 FEB 2023

The systematic collection, compilation, and processing of consumer data are known as database marketing. Database marketing, often known as customer relationship management, is a type of direct marketing. In a company's database, information on both current and potential clients is gathered and kept up to date. An organization can better understand and market to its customers as a result of the process of gathering this data, perhaps increasing revenue.

Database marketing is a type of marketing technique that can be used by businesses including merchants, technology suppliers, insurance providers, and other services. Organizations with huge client bases will benefit the most from this marketing strategy since they will produce more transaction data, which opens up more opportunities to identify potential customers.

Even though databases have long been utilized to store customer data in traditional marketing, the database marketing method stands out because it contains significantly more consumer data. Database marketing makes use of the data in a variety of ways after it has been processed.

In database marketing, marketers will use the data gathered to better understand customers, choose target markets for particular marketing campaigns (through customer segmentation), assess how valuable clients are to the business, and give customers more customized options. Customers' names, addresses, emails, phone numbers, purchase histories, job titles, website cookies, and even help requests are among the data that may be collected.

Following data collection and storage, marketing teams can analyze the data and use it to create more individualized customer interactions and draw in new potential customers.

How does database marketing work?

Data is first gathered from a variety of sources in database marketing. You can track people's names, addresses, emails, phone numbers, purchase histories, and other information. The information can be gathered through a variety of techniques, such as tracking user cookies, purchase histories, newsletter subscriptions, or anything else that calls for the completion of forms, such as entry forms for contests, offers of free samples of goods, product warranty cards, and so forth. Additional client records may be created as a result of leads generated by the marketing and sales teams. Although different nations may have varying rules surrounding what types of data can be bought and sold, prospect data can also be purchased from third parties.

Once acquired, this data is subsequently kept in a database. A data warehouse may host the database for larger enterprises. Different data sets from various departments that contain pertinent information about clients or potential consumers are sent to a data warehouse. A company will also be able to process vast amounts of data with the help of a data warehouse.

With the aid of marketing tools, the data can be filtered through database analysis. The information might be divided based on variables like demographics or possible customer behavior. The database has to be updated as frequently as possible. Data about a consumer or potential customer will probably alter over time. A business should pay more attention to data that is less likely to change, such as names, phone numbers, and emails, to avoid collecting out-of-date information.

Database marketing benefits

Database marketing can provide benefits to marketers, advertisers, and consumers by:

  • Finding the best channel to contact customers.
  • Identifying customer groups, such as loyal customers, first-time customers, or potential customers.
  • Organizes prospects on demographics and other potential demographics, such as potential interests.
  • Personalizes marketing messages toward individual prospects.
  • Prioritizes valuable accounts.
  • Potential to increase customer retention.
  • Data collected can be used for future promotional campaigns.
  • Saves expenses on sending campaigns to unlikely customers.

Types of database marketing

Consumer database marketing and commercial database marketing are the two different types of database marketing. The target audience is what distinguishes the two.

Businesses that sell directly to consumers, or B2C companies, use consumer database marketing. Names, email addresses, phone numbers, street addresses, gender information, and locations are among the data that are gathered in consumer database marketing. An organization may use giveaways, competitions, account signup, or free shipping offers to collect this information. Once such data has been saved, it can be utilized to send customers customized letters or emails.

Businesses that sell directly to other businesses, or B2B firms, employ business database marketing. Business database marketing collects data on a variety of topics, including corporate revenue, names, e-mail addresses, phone numbers, job titles, website cookies, and purchase histories. B2B businesses would like to gather this information through LinkedIn, webinar registrations, whitepaper downloads, industry studies, demos, free trial offers, and event registrations. An organization can begin marketing using benefit-focused emails or niche social media advertising once this data has been gathered and saved. A compact, thorough business database can be maintained with the aid of account-based marketing.

A B2B database may be smaller than a B2C database if it is utilized for database marketing. Businesses that use business database marketing might only target large target accounts, therefore a large database to hold a lot of consumer data is not necessary.

Database marketing tips and strategies

There are several database marketing tactics and advice available. For instance, a few fundamental pointers are:

  • Know the audience being marketed to. If an organization lacks detailed customer profiles, it may not have as much informed insight into who its prospective customers are.
  • Know the data that will be the most useful to collect. It may be information like demographics, activity, or transaction history.
  • Respect a customer's privacy. Personal information found on social media may be easy to find, and having an abundance of identifying information could be useful, but potential customers will not like having so much personal data about them being kept -- especially without their knowledge.
  • Work with other internal teams. Sales, support, and marketing teams will all have information about customers to collect because they often work directly with customers.
  • Use marketing software. Software tools should help make it possible to see different data points at once, view customer types or organize data by service and product categories.
  • Keep data as up-to-date as possible. Information can deteriorate pretty quickly as people move, change jobs and email addresses, or make other life changes. It is important to value information that is likely not to change often over information that will.
  • Implement strategies such as multichannel marketing or predictive analytics.