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Database marketing: Feature Article

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Database marketing consists of the gathering and processing of consumer data to aid in the direct marketing of products. The information collected will be stored in the company database. Marketing efforts have used the existing databases for a long time to send direct mail pieces, but databases are now being used to store information for online campaigns like email marketing. Database marketing allows consumers to learn more about their customers because they are able to track varying degrees of information. Tracking the information of customers will help a company determine the value of it's customers and determine what type of marketing campaigns they typically respond to.

When a company incorporates a database marketing technique, they are using every possible strategy to gather the information. For example, a company will use statistical techniques to determine the customer behavior and catalog them in the database with different categories. Several companies will send salesmen and other prospects out into the marketplace to build the customer database. A standard database consists of the customer name, address, and transaction information from past purchases. The database can then be divided into categories based on this information. For example, a marketer may decide they want to target large organizations that typically donate to charitable organizations. By having a well-maintained database, a company will be able to compile a listing of these organizations for their marketing campaign.

Quite often companies will send information to all their customers in the database. When a company generates a large database marketing technique, several customers will consider the information SPAM or junk mail. When a company decides to use their database for a targeted direct mail campaign, they are contacting customers that are actually interested in the information and will benefit from the information provided by the company.





Helpful Resources:
Wikipedia: Database Marketing
Wikipedia.org talks about database marketing and how companies use it to target specific customers. It discusses the importance of keeping a database up-to-date and why it is important to assign customers to separate categories.

Database Business Marketing
This web site provides great information about database marketing. It discusses how businesses use their database for business to business marketing and how to perform a data analysis with this information.

4 Phases of Database Marketing
This web site provides information about the 4 phases of database marketing. It talks about different steps a company must take in order to implement successful database marketing campaigns to their target audience.

Database Marketing Definition
This web site provides a brief definition of database marketing. It also provides links to other articles about how a good database will help a company maintain successful customer relationships.

Database Marketing Book
This book by Edward Nash provides great information about database marketing. It talks about how database marketing is marketing or selling a product directly to a consumer versus marketing to specific groups.

Strategic Database
Strategic Database specializes in helping companies create good databases that provide detailed information. They provide database services for business to business companies and business to consumer companies and help them target the correct audience.

Maintaining a Database
This web site provides information on database marketing. It describes the importance of maintaining a database and how to use a database to save money when you are targeting a specific audience.

Database Marketing Information
This web site provides information on database marketing and discusses how database marketing has become a popular tool for several online companies. It talks about how companies use database marketing to target audiences all over the world.

Database Mining
This web site talks about database mining and database marketing. It provides tips on the importance of maintaining a database and using it to reach the correct audience. It also discusses different categories that are used for successful database marketing efforts.

Database Marketing Efforts
This web site provides information on successful database marketing efforts. It discusses the different database structures companies use to implement successful database marketing strategies. It also talks about how database marketing can be successful for companies that create a proper database.




Most organizations that participate in database marketing are larger organizations. A customer database will allow a company the opportunity to find segments of customers and invest time and money contacting them about products or services. Smaller companies can participate in database marketing, but because most direct mail campaigns are large, they tend to be useless for smaller companies. The customers of smaller companies tend to be loyal followers and will find out the information from visiting the store or from others.

Some of the most successful organizations for database marketing include the financial industry, telecommunications, and retail industry. A company that has the ability to generate large transactions for their product and reach millions of consumers is considered a company with a successful database marketing effort. Most companies will divide their database into multiple sections, but there are two main sections a database must be divided into: existing customers and potential customers.
In order to have a successful database marketing campaign, a company must have the following information in order:

First, a company needs to identify potential customers and actual customers and establish separate records for each person and also connect them into groups of consumers. Second, each customer in the database needs to have information about past transactions and information about the customer's needs. Third, the customer information must also include information about the customer's responses to company marketing campaigns. Fourth, the database must replace market research by obtaining information from consumers. Fifth, a company must have successful maintenance of their database and be able to access the data when needed.

The goal of database marketing is to find ways to communicate directly with consumers and have them respond in a positive manner. When the customer responds, the company will measure the response and make sure the customer was fulfilled with their experience. Database marketing reinforces the customer relationship with a consumer and the company. Every time a customer speaks to an employee via the telephone or in person, they are having a need fulfilled. Other methods of fulfilling a customers need include direct mail pieces, events, webinars, stores, or visiting with the person at a sales seminar. Unlike other marketing promotions, database marketing emphasizes the importance of utilizing any medium necessary to elicit a response from the customer.

There are 4 separate phases of database marketing, they are defined as follows:

Phase One - The Mystery List. A mystery list is when the same customer appears on multiple listings in the database. Separating this customer from multiple listings and recognizing that they are one person will help marketers when they are analyzing the database for marketing efforts. It is important to classify which list a customer belongs to, and if they are added to multiple lists, they need to be flagged with this information.

Phase Two - Combining Databases. Most companies have multiple databases for different organizations within the company. For example, the sales team may have a separate database from the marketing team however the customers may overlap one another. If a company is using multiple channels to market to their customers, they need to combine the database into one group so each customer only receives one marketing piece instead of two or three. The information in each database should not conflict with another database because this only leads to confusion within an organization.

Phrase Three - Customer Communication. Of course the most important step of database marketing is to communicate with your customers. Each database must include reminders to communicate with your customers. For example, including the birthday of a customer will help a company remember to send a happy birthday message and possible offer them a discount for any purchases made on their birthday. When a company is planning the customer communication information, they must remember that the emphasis is on the customer. Customers need to be properly identified by their needs and locations. Once customers are identified, it will be easier for computer programs to separate them into categories and send reminder messages.

Phase Four - Automated Systems. A good customer database must link information and function automatically. Customer information must be up-to-date and older customers need to be placed into a different database from active customers. A good computer program will have the ability to ensure that critical information is relevant and is placed in the proper area.

In order for a company to implement successful database marketing efforts, they need to have as much information available as possible and include up-to-date information on prospects. Some companies build extensive databases that provide detailed information about their consumers while other databases provide the simple facts. Large companies even have data warehouses where the information is stored and cataloged. Several companies purchase mailing lists from other companies' databases. Marketing to new clients from a third-party relies heavily on the maintenance of the database. If a company sells their mailing list to another company, they need to make sure they information they are providing the other company is accurate.

Several companies participate in different marketing strategies like business to business marketing. If a company has a database that deals exclusively with business to business relationships, they will have a smaller database than a company that uses business to consumer marketing. The complication for a company that uses business to business marketing is that they do not have a lot of information available and they may only have one contact per organization. If that contact moves to another company, they will need to build a relationship with another person if they want to continue obtaining business from the company.

Database marketing also involves analyzing the information collected. It is important for a database to include as much information about the customer as possible. Several databases include a section for miscellaneous notes where the employees are able to write additional information about the customer. For example, a loyal customer that tends to spend a lot of money with the company may be eligible for discounts; by including a notes section in the database, employees will learn this information about the customer when they call so they can give the proper discount to this individual.

Databases have been around for several years. Software programs to store database information are getting better and are including a complete history of consumers buying behaviors and other information. A good database should be able to host multiple users and should be able to accommodate users via the internet. When a business professional is away at a conference or attending another location, they may need information from the database and they should be able to access this information whenever and wherever they are. New databases are able to track phone numbers to the phone call that is dialing into the company. Tracking the number to the profile information about the customer in the database helps companies keep their information up-to-date and allows the customer service representative to learn more information about the person they are speaking to. This information will help the company build relationships with their customers and add a personalized touch to each phone call. Database marketing is also helpful for businesses that want to test new products or services before they reach the public. The ability to target consumers by grouping them into separate categories will help businesses cut extra costs for marketing efforts.

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