Database Marketing Part 1 by Jeff Miles

Database Marketing © BusinessDoctorSecrets.com

Database Marketing is a form of direct marketing.

A database contains the name, address and purchase history of a customer, so it is more than just a mailing list. Marketers sometimes purchase these lists from other organizations and import the list into their database.

Even though databases sound very dry, they actually give the business owner the ability to relate to their customer on a more personal level. For instance, they can send e-mail targeted to that person's interest, based on their purchase history. Databases are used by large businesses with huge mailing lists.

When a company is so large it is hard to remain personal, so database marketing helps solve that problem. Everyone is tired of junk mail and spam. Database marketing is supposed to be a way to make the mail more targeted to the consumer so that it is less likely to be thrown in the trash right away.

Street-smart companies spend a lot of time analyzing the data in their databases. They sort each name on the mailing list into sub-categories based on how frequently they purchase, what they purchased, the average dollar amount of their purchases and more. It's possible to predict future customer behavior based on past history.

When you see online sweepstakes forms, contests, offers for a free product and online surveys, these are all part of database marketing. Responses to these items give marketers valuable information to put into the database so it is worth the expense of a sweepstakes or freebie to get this information. Customer service surveys sent through e-mail to current customers, with the offer of a discount, are also common ways of filling the database with valuable data. People like coupons and will often be willing to spend five minutes filling out a survey in exchange for a 25 percent off coupon or something similar.

The systems used to manage these databases are called Customer Relationship Management systems. The data isn't used just for direct marketing purposes. This information gives the customer service department a complete history on the customer when they call. The customer service representative can make special offers to the customer based on this information and can also speak to the person on a more personal level as a result.

The information in the Customer Relationship Management system goes even further. It can be used to develop new products and services. It's easy to track popular or unpopular products with a database. Not only can the company have improved communication with the customer, it can also create new products that meet the specific needs of the customer. It's a win-win because both the company and the customer benefit.

There are laws regarding database marketing, of course. There are programs that help consumers remove their phone number from telemarketer lists. There are laws that regulate the use of credit data and health data.

The person who is most likely to buy from you is the person who has already purchased from you. Acknowledgment of this is at the core of database marketing. Even a very small business can benefit from these principles by keeping an e-mail list of clients and noting their previous purchases.

A couple of good database marketing tools you may want to consider are ACT! and Goldmine.