The Right Approach to Database Marketing By Akhil Shahani At Isnare.com Ezine Articles

Selling to customers has never been so complicated, or so simple! While selling is fraught with complexity as businesses cater to a wide spectrum of buyers spread across time and space, the tools of technology have helped streamline the process. Thanks to database marketing, customer information has never before been as meticulously documented. Marketing databases are a super precious electronic compendium of buyer information that companies spend big bucks to maintain. What does an ideal one look like?

There’s probably no single correct answer to that question, but in general, a company serious about database marketing must cover the following bases:

The database must be complete as far as possible. All customers and potential buyers must be listed as individual “items”, with the possibility of grouping them into market segments based on certain parameters. Contact details should be complete and updated.

A history of past transactions, including exposure to any communication from the company must be maintained. There should also be a possibility of recording feedback and reactions to earlier campaigns.

The data must be easy to handle, manipulate, retrieve and analyze. It must support marketing objectives – for example facilitate generation of mailing lists, be user friendly and flexible.

Ideally, the database must be able to generate sufficient insight so as to make market research redundant!

Unfortunately, the world isn’t perfect, and neither is database marketing. The level of sophistication of databases in different companies varies to a great extent. Also, since marketing databases are seldom static, they too evolve as the business matures. Broadly, database marketing companies might have adopted any one of the following approaches to their customer databases.

Sales register: This type of database is more of an accounting tool, similar to invoicing software. It helps maintain sales data on a transaction by transaction basis, with the focus being on the sale and the not the customer. Thus, it might not be able to handle information of interest to the marketing staff – such as buyer behavior, purchase frequency etc. It also suffers from a big drawback of not accommodating data on prospective customers. Companies that use such databases might have to bring in a separate prospects database and use it independently in their campaigns.

Multiple lists: Some businesses might maintain customer-centric databases aligned to marketing needs; the only problem is that they may have too many. Thus, it would take a lot more effort to run a coordinated campaign for all their customers featuring in different lists. Not an ideal situation, obviously.

Master database: Only one database is used across all campaigns. This database is likely to document all customer related information in detail. Marketing campaigns are planned using the insight generated from this database, and there is a more “together” approach involving several departments and functions. For example, if a burst of marketing activity is planned which is expected to generate immediate sales, then, production, warehousing and logistics may need to prepare themselves ahead.

Integrated database: This is the stuff that database marketing dreams are made of. While networking all divisions may never be a possibility, sophisticated databases are moving in that direction. Information is shared across several functions, and adequate links are provided which enable smooth and timely transfer of data.

Clearly, database marketing is an indispensable part of any marketing oriented organization. And that’s why there are so many books written about it, including “Statistical Modeling and Analysis for Database Marketing: Effective Techniques for Mining Big Data” by Bruce Ratner available on amazon.com.

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