Database marketing is a systematic approach to the gathering, consolidation and processing of consumer data. Database marketing is also a form of direct marketing and may be called customer relationship management. Show
Data of both customers and potential customers are collected and are maintained in a company's database. The process of collecting this data allows an organization to better know and market to its customers, leading to more potential sales. Who benefits from database marketing?Organizations such as retailers, technology vendors, insurance companies and other service providers may make use of database marketing as a marketing strategy. This approach to marketing is most useful for organizations that have large customer bases, since they will generate more transaction data, meaning more aspects to find new prospects. Although databases have been used to hold consumer data in traditional marketing for a long time, the database marketing approach is differentiated by containing much more consumer data. The data is also processed and used in different ways in database marketing. In database marketing, marketers will use the collected data for the following purposes:
Types of collected data may include the following:
After data collection and storage, the data can then be analyzed and used by marketing teams to make a more personalized interaction for each customer and to attract new potential customers. How does database marketing work?Database marketing starts by collecting data from various sources. Names, addresses, emails, phone numbers, purchase history and other data can be tracked. The data can be collected through various means, including the following:
This information, once gathered, is then stored in a database. Larger organizations might house that database in a data warehouse. A data warehouse will receive different data sets from separate departments that have any relevant information regarding customers or potential customers. Having a data warehouse will also allow an organization to process large amounts of data. The data can be filtered through database analysis using marketing software. The data can be separated by factors like demographic or potential prospect behaviors. The database should be kept as up-to-date as possible. It should be assumed that a customer or potential customer's data will change over time. To keep from collecting outdated information, an organization should place more focus on information that is less likely to change, such as names, phone numbers and emails. Database marketing benefitsDatabase marketing can provide benefits to marketers, advertisers and consumers in the following ways:
Database marketing challengesDespite the benefits an organization can see from database marketing, there can also be a few challenges as well. Those include the following:
Types of database marketingDatabase marketing can take place in two forms, consumer database marketing and business database marketing. The difference between the two is the target audience. Consumer database marketing. Businesses that sell directly to a consumer, or B2C organizations, use this approach. Data collected in consumer database marketing includes the following:
To gain this information, an organization may implement giveaways, contests, account registrations or offers for free shipping. Once that information is stored, it can be used by sending personalized mail or emails to consumers. Business database marketing. Organizations that sell directly to other businesses, or B2B organizations, use this approach. The data collected in business database marketing includes the following:
B2B organizations would want to collect such data through LinkedIn, event registrations, whitepaper downloads, industry reports, demos, free trial offers or webinars. Once this data is collected and stored, an organization can start marketing through benefit-focused emails or targeted social media ads. Account-based marketing will help in maintaining a small, detailed business database. A database used for business database marketing may be smaller than a B2C database. Organizations that employ business database marketing may only focus on large target accounts, so there's no need for a large database to store large amounts of customer information. Compare the differences between B2C and B2B marketing.Database marketing tips and strategiesThere are numerous tips and strategies regarding database marketing. Some basic tips include the following:
Real-world examples of database marketingA couple examples of database marketing could be an e-commerce app that uses data about transaction history to better and quickly assess a customer service call or a food delivery app using transaction data to find which times a customer is most likely to order from them. However, some real-life examples of database marketing can be found in Facebook, Amazon and Netflix.
Editor's note: This article was written by Alexander S. Gillis in 2020. TechTarget editors revised it in 2022 to improve the reader experience. What are the benefits of direct marketing to buyers?Because it communicates directly with customers, it can deliver a higher conversion rate (the percentage of the targeted group that, for example, buys your product) at a lower cost.. is affordable.. is measurable.. enables you to promote your products and services directly to the customers who need it most.. Which of the following are benefits of direct marketing for sellers?What Are the Benefits of Direct Marketing for Sellers?. Advantages and also the disadvantages of direct marketing.. High division and targeting.. Upgrade your loyalty strategies.. Increase your sales with former and present clients.. Create new organization chances.. Tests and analyzes the results.. What are the 4 main types of direct marketing?Here are 11 of the most common types of direct marketing:. Telemarketing. Telemarketing involves contacting clients over the phone to sell them a product or service. ... . Email marketing. ... . Text marketing. ... . Direct mail. ... . Kiosk marketing. ... . Direct selling. ... . Social media marketing. ... . Brochures.. What are two disadvantages of direct marketing?However, although there are many advantages of direct marketing, there are some disadvantages you need to consider:. Intrusive – Some people find direct marketing annoying and intrusive. ... . Environmental Impact – Some direct marketing techniques are associated with having an environmental impact, mainly direct mail.. |