Database Marketing is a powerful and efficient way to collect customer’s information and develop and analyze the data collected to create a marketing campaign. Usually seen as the next generation of direct marketing, database marketing is a way to target the specific audience you want and create an effective campaign to sell to a tailored audience.
Database Marketing relies on generally the same principles regardless if you’re using it for B2C or B2B, however, it does have an effect on how you would use it.
Best Practices with Database Marketing
As with most marketing strategies, there are ways of doing things, and then there is the right way to do them. Generally, you want to ensure that you are acting ethically with customer information while also taking advantage of all the data you have access to.
Growing Your Database: Depending on whether you are trying to set up your B2C or B2B campaign, data can be gathered and used in a couple of different ways. B2C marketing generally means gathering as much data on your customers’ information to create unique profiles of countless consumers. Then you take all of that information, analyze it, and use the data you have acquired in targeting who you want.
Generally, you are pulling addresses, emails, phones numbers, and any other type of identifiable information to later analyze or target. The larger the pool of people you have, the more options you have in your marketing. B2B Database marketing is similar in concept, but generally, the ultimate goal is to create a new business partner rather than a repeating customer and tends not to involve transactional data.
Buying Your Data: Another way to build up your database’s size is by simply purchasing the customer information. You can actually buy emails according to attributes of the customers, skipping a lot of the difficult data analyzing. The benefit here is that it takes some of the more daunting work away from you. The issues with buying emails, however, is that depending on whether you rent or buy them, you can run into issues.
Buying emails can seem like a fast and efficient way to start your marketing campaign, but there are drawbacks. Usually, any data that you buy will run into data decay and fairly quickly become irrelevant. As customers change addresses, move out the group you are targeting, or lose access to the internet, their address ceases to be useful. Another issue you run into is that since you generally only buy their address and name, you can’t hone in on consumers beyond a superficial level as you lack more details.
Additionally, renting is usually just as futile as you run into similar issues with buying the emails. What puts rented emails in a greater disadvantage is the fact that you aren’t able to see the emails or data of the customers you are paying for. This results in paying to data that you aren’t even privy to.
Analyzing Your Data: Gathering information and data isn’t useful unless you take advantage of what that data says. One method that can be utilized to evaluate the traits of your consumers is done by using the RFM method (recency, frequency, monetary value). By going based on your companies preference, you can choose to market to those that have only recently bought a product, frequently buys them, or buys the priciest item. Depending on your needs, you can come any part of RFM together to ensure you are targeting your company’s desires.
Challenges with Database Marketing
As with all forms of marketing, there are going to be issues you will eventually encounter, which will need to be overcome in order to connect with your consumers. Some problems simply need a minor modification to make your marketing more successful. Other times, however, you’ll have to revamp your entire strategy to enhance your performance.
Overwhelming Information: Marketing strategies always require you to gather as much relevant information to ensure you’re set on the right path. Database Marketing, however, requires much more data to create an effective campaign. This ultimately means that you are forced to use database automation and invest more money to gather relevant information. The reverse is also possible where if your population size is too small, you’ll waste time and effort trying to set up a campaign for them.
Being as Specific as Possible: People very quickly have become less and less welcoming of marketing attempts. Due to the specificity capable of Google searches, any attempt of marketing that isn’t absolutely relevant will likely fall flat. Fortunately, the fix is to simply gather more audience data and apply your findings to your marketing attempts.
Data Decay: Data is just the observation of trends, which means that it is prone to changing as often as people do. Data stored in a database about people are prone to become irrelevant over time simply because people can legally change their name, open a new email address, receive new phone numbers and so forth. After a year, 30% of your data will likely become irrelevant and require you to constantly be adding and updating information.
After a year, 30% of your data will likely become irrelevant Click To TweetThis is only scratching the surface of all the intricacies and specific aspects of database marketing, as the potential of data use is nearly limitless. With this information, you should be ready to make the best out of your database marketing campaign and engage your target audience like never before.
About the Author
Nick Rojas is a business consultant and journalist who lives in Chicago and his hometown Los Angeles with his wife. His work often discusses social media, marketing, and branding in regards to small and medium enterprises (SMEs).
