DATABASE M

ARKETING

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Paul Uthup

INTRODUCTION

Database marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes. The method of communication can be any addressable medium, as in direct marketing.

Database marketing emphasizes the use of statistical techniques to develop models of customer behaviour, which are then used to select customers for communications

The "database" is usually name, address, and transaction history details from internal sales or delivery systems, or a bought-in compiled "list" from another organization, which has captured that information from its customers. Typical sources of compiled lists are charity donation forms, application forms for any free product or contest, product warranty cards, subscription forms, and credit application forms.

There are two main types of marketing databases,

1) Consumer databases (B2C)

2) Business databases (B2B)

SOURCES OF DATA

DATABASE MARKETING TECHNIQUES Database Marketing and techniques tailored to fit your own products and

services, you can gather and store targeted information about your visitors, clients or prospects.

1. Appended Data - More in-depth data may be desired for business to business (B2B) communications like SIC code, number of employees and annual sales, for bidding projects. Or for one-on-one relationships with clients like for realtors and insurance products, people can append data to name and address files, seeking out income, age, home value, length of residence, number of children and over 30 other bits of info. The resulting data is then used in all types of well targeted marketing campaigns. Appended data can be done in-house or outsourced with larger companies that have more complete databases.

DATABASE MARKETING TECHNIQUES - CONTD

2. Website Data – Some websites offer a means to gather their own data, too, through the use of cookies that gather information from website visitors. This marketing method is popular for allowing Internet marketers a means to learn more about who visited their sites, which pages they searched and for how long, and many other site statistics. These are then used for their product and service creation, packaging and pricing.

3. Email Communications & Tracking – Email surveys, customer reply forms and shipping documents that use tracking numbers and share them with the clients are excellent examples of database marketers in action. By using this type of tracking, companies can improve their customer-client relationships, resulting in increased sales and customer retention, and earn more about their clients in the process for future sales and retention efforts.

EVOLUTION OF DATABASE MARKETINGDRIVER #1: THE CHANGING ROLE OF DIRECT MARKETING

The move to relationship marketing for competitive advantage.

The decline in the effectiveness of traditional media.

The overcrowding and myopia of existing sales channels.

DRIVER #2: CHANGING COST STRUCTURES

The decline in electronic processing costs.

The increase in marketing costs.

DRIVER #3: CHANGING TECHNOLOGY

The advent of new methods of shopping and paying.

The development of economical methods for differentiating customer communication.

DRIVER #4: CHANGING ECONOMIC CONDITIONS

The desire to measure the impact of marketing efforts.

WHY DATABASE MARKETING ???

If your work in a market niche with a limited number of prospects, e.g. 100-10000.In this case, if you can compile a database of all your prospects, it may be more economical to communicate with them directly, rather than via mass media.

If your business is repeat by nature: your product requires regular replacement, service or replenishment, or you sell complementary products. When you have customer details on the database, you can contact them at the right time with the right offer and gain extra sales for a very low cost to your business.

Your sales cycle is three months or longer. Prospects will forget about you should you be out of contact for 90 days or longer, so you need to remind them that you are there. Database marketing is a targeted, cost-effective means of doing so.

CHALLENGES OF DATABASEMARKETINGTracking their online behaviour has become the most effective means for

most organizations to understand what is top-of-mind for their target audience RIGHT NOW. Message and offer, finely tuned to audience, have been and remain the key to effective database marketing

To build an effective online database marketing system, it’s necessary to use a robust targeting platform that integrates online behavioural data with any essential customer data

It’s a very rare database marketer that wants to target based on simple aggregations like visits, page views or time on site. These just aren’t meaningful database marketing aggregations

CHALLENGES OF DATABASEMARKETING - CONTD

Web analytics systems evolved primarily as reporting and site analysis systems. As a consequence, Web analytics systems don’t generally work at the correct fundamental data level – the visitor

The volume of data can be enormous and mining the data would be a costly affair.

Targeting a Single Communication: Understanding what a visitor cares about most

Targeting against a basket of interests: Creating Fuzzy-Logic

Marketing organizations have learned and re-learned that working within the vendor SaaS model is faster, cheaper and ultimately better than getting involved with big IT.

The addition of Score into Visitor Data Mart isn’t just the addition of a separate methodology for doing selections. It’s a deep integration where scores become another input available to Segments

CONCLUSION

The bottom-line is this – for almost every marketing organization in the online world and for almost every task where serious SaaS plays exist, the out-sourced SaaS model has become the norm which cannot be ignored

Database marketing with online data is still in its nascent stages. Despite huge amounts of seemingly invaluable online customer behaviour and a growing capability to integrate data across channels, few organizations have been able to truly unleash this capability.