How Your DBA Can Use Database Marketing To Improve Your Business

Jack Dawson

November 06, 2015

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Data is considered an asset by business entities. The more of it they have, the more they can learn about their customers and the more they can improve their services to meet their needs. Database marketing is where consumer data is gathered, consolidated and processed in a systematic way for potential and current customers. This information is then stored in the databases of a company to be processed and analyzed in ways that are considered new and definitely more sophisticated.

The data is used by marketers to gain more knowledge about their customers, to decide on target markets for certain campaigns and to also create offerings that are specialized for the customers that they have. Even though this has been going on since the eighties, there has been an explosion of data with the advent of the internet, and the possibilities of how it can be effectively used have also sky rocketed. Data has become even more useful today than it has been in the past.

The question that many people ask is where the data is obtained. There is a wide range of sources, both internal and external, that make it available. The sources include email correspondence, promotional efforts, social media, sales information, warranty cards and many other places. The goal of database marketing is really to create strategies that in the end will bring an increase in company profits.

By building a consumer database maintained by the DBA, the company is able to establish, build and maintain relationships with their customers. Using the information they have gathered, they can then understand the intricacies of customer relationships and then use that information to boost customer retention thus guaranteeing a steady income stream from repeat customers. At the same time, they can continue working on amassing a new customer base that is also well maintained for repeat business.

In order to effectively use database marketing, there are three stages that you must adhere to as follows.

Collecting Data – You must be committed to collecting data of both potential and existing clients. The data needs to also be relevant and accurate because mistakes can be counterproductive. Making the data available to the marketing department is also essential because they can then use it to plan their activities for the future.
Mining the Data – It is not enough to collect the data; you need to mine it and turn it into useful information. This means that you will need to analyze the data quite critically and get the information that you need to effectively communicate and market your services and products. It will likely mean using the information provided in order to segment your potential and existing customers in order to send them appropriate, targeted, marketing messages.
Creating Business Strategy – Your DBA can extract the data for analysis and with the information received; you can then begin to create your business strategy for the coming years. Some of the different things you may find yourself doing is enhancing or modifying your marketing strategy, adjusting your pricing, changing your communications strategy and even allocating resources differently. The changes you make will be informed decisions that will aid your organization into long term profits.

Perhaps you are wondering what benefits you can hope to gain with database marketing. Here are just a few.

You will see an increase in sales. The information that you gain from gathering and analyzing customer data will enable you to identify new markets for your services and products. By exploiting these new opportunities, you will stand a good chance of increasing your sales as a company.
Your profitability will go up. Marketing usually accounts for a large chunk of the company’s expenditure each year. Being able to target where your marketing efforts will bear the most fruit is a definite plus. Using your database and the information gained from it you can do just that. You are able to segment and therefore target or focus your marketing efforts where they will be more cost effective, efficient and cause and improvement of your profit margins.
Product development improvement. The information in your database will also become a source of market research for the company. Your clients will give you feedback on the products you have in the market – what’s working and what’s not. Armed with this information, your company can then set to work making improvements where necessary to ensure that your products are meeting the needs of the client. The information can also be used when you are designing a new product.
Take your marketing communication efforts a notch higher. With accurate data, you will be able to improve your customer communication efforts which will make it possible to build relationships that will last. This in turn will mean repeat customers and even enhanced customer loyalty.

There are several examples of how you can use data marketing to your advantage. You can use it to launch your loyalty program if you have been thinking about setting one up. This will help you attain and keep the sales history of your clients. Once you identify your loyal customers, you can easily reward and engage them and this will work like magic in encouraging them to select your business over that of your competitor.

You will also be able to calculate the lifetime value of a customer. This is a model used to predict what a relationship with a customer for a lifetime is worth to your business. Today, getting this value has become easier and more accurate since database marketing techniques have become a lot better. Once you understand the customer’s lifetime value, you will be even more eager to establish customer relationships and maintain them over time.

You may be wondering about the cost of setting up the infrastructure to make this work. Well, if you had to purchase all the necessary hardware, it would cost you an arm and a leg. However, there are wonderful cloud based services that are operated remotely with excellent results. You should definitely consider those.