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Want to get a handle on the best market for your product and get to know what your ideal customer is looking for? If so, database marketing is a must. Database marketing involves companies using data about consumers to develop targeted lists that market directly to those consumers in a personalized way. The company analyzes the data, which can come from a number of different sources. These might include direct mail, social media, sales, website and customer service interactions or buying lists.

Database marketing is different from other types of marketing, like mass marketing, because it’s targeted and tailored to specific groups of consumers. Databases can include names, addresses, email addresses and demographic information like genders, ages, locations and information about previous purchases. For example, say you want to target an audience of senior men who like boating and live in Florida or young women who own guitars in the U.S. There are databases of exactly those kinds of markets available.

Who Uses Database Marketing?

All types and sizes of brands, marketers and organizations use database marketing, from sole proprietors and medium-sized companies to multinational corporations and educational institutions. Facebook has a user database of more than two billion people and LinkedIn has one of more than 500 million users.

The target audience for database marketing is one that a brand has determined is the best prospect for its product or service. Companies can choose to use B2B database marketing and/or consumer database marketing, depending on which people or entities they want to market to.

The Benefits of Using Database Marketing

Think of database marketing as getting to know your current and potential customers. When you’ve learned who they are and what motivates their buying decisions, it opens the door to a broad range of benefits.

  • Personalization: Database marketing personalizes your marketing. Consumers like to feel that companies that are reaching out have a degree of familiarity and know the consumers’ values and interests. It helps develop promotions and marketing messages that are relevant to the target market. When you know your customers, you can develop products and marketing materials that resonate with them.
  • Market Identification: Database marketing educates brands about the best markets for their products and services so they don’t waste money going too broad with their marketing. If you try to appeal to everyone, you can miss the market that needs and/or wants your product because your message isn’t tailored to it.
  • Promotes Feedback: This marketing helps generate feedback from customers. You can use this to tailor products and marketing more specifically to them and to develop new products.
  • Lead Generation: It helps generate pre-qualified leads. For instance, say you’re selling sleeping bags. With your database marketing, you’re also targeting consumers who love camping and have purchased tents and other camping gear before. This means you’re marketing to pre-qualified leads.
  • Brand Awareness: Database marketing increases brand awareness. The consumers in your database are interested in the types of products you sell. However, they might not have been aware of your brand before you marketed to them.
  • Boosts Conversions: Because database marketing allows you to reach pre-qualified leads, it’s more likely to lead to sales and other types of conversions.
  • Customer Retention: Not only can it help you get new customers, but database marketing can also help you keep current ones. It helps you uncover issues customers might have with your product so you can address them.
  • Market Segmentation: Database marketing helps you segment your markets and your promotions. This way, you know which groups of consumers respond best to specific products and campaigns.
  • Cost Effectiveness: Database marketing is less costly than traditional advertising. For instance, social media databases offer an excellent way to target niche markets without the waste that comes with broader mass marketing.

Top Tips for Database Marketing

Here are some of the top things marketers and brands need to know before they start database marketing.

  • Research First: First and foremost, look before you leap. Take the time to do the research to find the market that’s best for your product. This could happen through doing online, phone or in-person surveys or interviews or checking buying industry reports. Look at existing markets and see how they can be expanded or segmented.
  • Check the Competition: See what and how the competition is doing. If a competitor offers an e-newsletter, subscribe to it. Check out its social media for customer comments that could be useful to you.
  • Be Selective With Software: Make sure you’re using software that can handle what you need to do with your databases. Keep in mind that your databases contain information that you’ll need to be able to easily share with others. Look for a format that can work for everyone.
  • Collect the Right Information: Sometimes, it’s easy to overlook the basics and things that might seem obvious. If you’re building a database, make sure you’re collecting the right kind of information to use for your marketing. For example, if you’re planning to do email blasts, make sure to get email addresses for your contacts.
  • Make It Easy for Your Market: Make sure it’s easy for your target market to provide you with the information you need to collect. For instance, if you have online forms to capture leads, make them simple to find, fill out and understand. If you’re offering an e-newsletter, make it easy to sign up for.
  • Categorize Leads: Categorize your prospects. Put your leads in categories that show which stage they’re at in the buying process. Track them as they move through the process so you can update them.
  • Keep It Current and Clean: The quality of your data is extremely important. Because it’s the basis for your marketing, it should be as up-to-date, clean and accurate as possible. Remove duplicate and spam contacts.
  • Know the Laws: If you’re targeting international markets, bone up on data-protection laws, especially when it comes to database marketing in the UK and European Union.
  • Let Them Try It: Consider offering free trials or tools to your target market so they can get familiar with what you do and how it can benefit them. For example, a number of design software companies offer free product trials for a limited amount of time. Potential customers can see if a product meets their needs before signing for a paid contract or version.
  • Stay in Touch: Keep in regular contact with your database contacts, but don’t overwhelm them with excessive communication.
  • Track Your Results: Keep track of the results you get from targeting a particular market with a certain promotion. You can make changes as needed to your product, service or message.
  • Keep Growing the Database: Keep adding new contacts to your database to ensure you have a steady stream of sales prospects coming in. At the same time, be sure to remove those that are no longer interested in receiving communication.
  • Share the Leads: Pass the leads that are close to buying along to your sales team. Update customer information on a regular basis. Be sure you’re using software that makes it easy to do so.