The subject of databases and database marketing usually does not inspire most people’s imagination, in the same way as say, finding long-lost buried treasure. However, effective use of business databases is analogous to finding buried treasure – it’s just hidden within your own business.
Database marketing refers to leveraging information about your customers and/or prospects, for the purpose of generating more sales and profit. Computer databases make the whole process simpler and faster.
Although there is much one can know about database marketing, for this overview, we’re simply going to address databases from a high-level perspective, and not delve into the many ways that database information can be dissected to yield even more efficiencies and profit.
Let’s look at the four fundamentals of database marketing.
You Need a Database
The first and most obvious fundamental is that you need a database. Any database.
Although this may seem too obvious to state, here in the 21st century, there are still companies that are so focused on selling and delivering products and services that they haven’t had the time to go through the process of converting paper records into a database.
And although creating a database from past records won’t likely be featured within your favorite list of business projects to contemplate, even starting a database is better than having no database at all.
At least any effort it takes to begin a database, even if it’s not companywide to begin with, is a step in the right direction.
Having said that, converting old records to a database is very desirable.
Update The Database
Fundamental #2, you need to update the database. Setting up a customer database, or prospect database, and not updating it with ongoing information has very little value. It’s almost like having a map of where to find the buried treasure, but not using it.
And to be clear, by “updating the database,” I’m simply referring to putting information into it. And continuing to do so.
Analyze The Data
The third fundamental is where database marketing begins to better parallel the idea of digging for buried treasure. Except in this case, you can have a very high certainty that there is treasure to be found. However, a better way to describe the “digging for treasure” would be to call it “analyzing the data” for ways to better market your products and/or services. And this kind of treasure reveals more and more of itself the more you dig.
Stated another way, you will not receive the payoff until you analyze and act on the data.
Act On The Data To Generate More Sales
Which is the fourth fundamental point here. Acting on the data to generate more sales would be analogous to poking your shovel into the treasure chest and actually pulling it up.
In the spirit of keeping this short and on point, and merely reflecting a high-level perspective, recognize that the process of analyzing the data and extracting the treasure will vary from business to business.
If we considered a spectrum of applications of database marketing, from simple to more complex: on the easiest side of the spectrum we’d have examples like sending seasonal emails to past buyers who made seasonal purchases. If they bought holiday gifts last year, send them an email promotion about buying holiday gifts from you this year.
A slightly more complex example would be to isolate those prospects in your database whose contact information was derived from a specific series of trade expos over the past 3 years. Once that segment of your database has been established, then conduct an email and telemarketing campaign featuring a new product or service that is directly pertinent to that niche.
A more complex aspect of the spectrum would be paying to have your database of customers and/or prospects cross-referenced through a national database clearinghouse to find which of the customers who purchased running shoes from you in the past, might also be camping or hiking enthusiasts. In which case, they would be good prospects to email and to send direct mail promotional offers about your new line of hiking boots.
There are more sophisticated ways to leverage the value of any business database but this simple overview expresses the fundamentals of what database marketing is about.