Database Marketing – A Short Explanation

Database marketing is a new kind of marketing that is quite popular these days. But what exactly is this database marketing? Simply put it is collecting a reservoir of customer information and storing it in a way that it can be easily accessed for use in directing marketing efforts. But first you need a database. There are two ways of generating a database for marketing.

This reservoir of prospective customer data may either be created or purchased from companies that are in the business of collecting and selling client databases. These companies get the permission of these clients to forward their data to sales companies. You can do this through websites or on contracts (the tiny blocks you tick unthinkingly when buying a cellphone contract, for example, saying things like “Do you give us permission to send youdata about additional products that become available?”). It would also be helpful to keep a database for your existing customers and any new clients you get, as that would allow you to maintain relationships with all your customers and also give them the feeling that you genuinely care, thus ensuring a degree of brand loyalty.

As it pertains to the usability of database marketing, remember to consider the following scenario: you have a company that sells water purifiers and have a need to increase your sales figures dramatically. You could randomly call people (a procedure called cold calling) and attempt to sell your product, you would probably get rejected at the very least 80 percent of the time. You need to consider first, who the people are who would be possibly interested in buying a water purifier? Surely not students, as students would not be interested in buying goods like this as they are more interested in games and music than their health. On the other hand, however, housewives or married men or entrepreneurs making use of their own offices might be interested in buying a water purifier. If you have a sorted database of these potentially interested people, your sales success rate will definitely increase by tenfold. Database marketing can enhance your sales success rate from less than twenty percent to close to eighty percent without having to alter your sales tactics any more than targeting a specific market.

You need to keep a very important factor in mind when using database marketing though. You have to be careful of contravening privacy laws. Only get your databases from companies who can prove that they have permission to sell the contact information for the people on their database, if this isn’t the case, you could find yourself with a lawsuit on your hands. Only collect the information that you need, make sure you do not go digging deeply into the personal lives of your clients as that could put the reputation of your company in danger. Database marketing can be a very successful weapon against your competitors if used correctly and intelligently. It would not only help in getting new customers but will also ensure brand loyalty and increase brand recognition.