Database Marketing

Database Marketing is a systematic approach to the gathering, consolidation, and processing of consumer data (both for customers and potential customers) that is maintained in a company's databases. Although databases have been used for customer data in traditional marketing for a long time, the Database Marketing approach is differentiated by the fact that much more consumer data is maintained, and that the data is processed and used in new and more sophisticated ways. Among other things, in Database Marketing, marketers use the data to learn more about customers, select target markets for specific campaigns (through customer segmentation), compare customers' value to the company, and provide more specialized offerings for customers.

Database Marketing implies that the target audience for their direct marketing efforts is generated from a computer database of names, which resides within the company (your house file) or is rented from an outside source. The entries in these lists are usually characterized (profiled) by numerous factors, so sub-lists may be produced of customers that are more likely to respond to a given tactic. When a customer response is received, this information is also recorded in the database. As time progresses, more information collect in the customer files providing an even more complete picture of their buying habits or potential.

Database Marketing provides a very powerful, targeted approach to reaching specific customers. Many of you already work with databases that characterize customers by areas of interest. If your systems are good, you also know who is interested in specific products and buys those products from you. By gaining more information from your customers from sources like customer services, technical services, literature requests, and sales force contacts, a more complete picture of the target may emerge, leading you to new ways to identify potential customers. Also, there are numerous computer programs based on a number of different models that can help you identify higher potential customers using the information available.

How can you use the information you collect on online Database Marketing? Think of online Database Marketing like direct mail--without the envelope and stamp. You're contacting your customers directly with information about your business--highlighting new products, announcing sales, offering special discounts. Unlike direct mail, this logistically has a seven day or more lead time, online Database Marketing offers almost immediate turnaround for producing and distributing your marketing messages. Your costs will be significantly lower, since you've eliminated the need for printing, envelopes and postage. Like any marketing medium, however, the key is to use Database Marketing regularly to stay in touch with your customers.

There are several reasons, for which you can use Database Marketing, including:

· To reduce product overstocks. A quick e-mail message to your customers may help reduce product overstocks, particularly if you offer special price incentives.
· To provide information on new products or services that you offer. If you add a new line of giftware to your shop, let customers know about it via e-mail. Encourage them to try your new products by offering discounts. 
· To thank customers for their business. Let your customers know you appreciate their business. Once or twice a year, offer a thank-you discount on future purchases. 
· To up sell. Encourage customers to boost the amount they spend with you by featuring items that are priced a few dollars higher than what customers normally spend. 
· To sell again. Entice customers to make another purchase by letting them know about your shop specials or about less well-known products and services you offer.