The ultimate guide to database marketing

No matter what your service or product is, you need to be ahead of potential customers in order to make the sale. Many companies put their trust in social media.

While social media platforms are a great way to get in front of people, they have two major drawbacks. First, you can have tens of thousands of followers on your chosen platform. But thanks to algorithms that few (if any) people understand when you only a small percentage of these followers with a given post.

Second, what happens if that platform ever disappears? Do not think for a moment that you will receive a nice list of contacts. If a platform ever shuts down, your audience will evaporate in seconds.

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Fortunately, knowing this is half the battle. Now that you understand that you do not “own” your contacts through social media, it’s time to look at how to protect your audience and take ownership and responsibility for their contact information and data.

This is called Database Marketing and you are learning why it is important for your business as well as how to use it properly.

What is database marketing?

Before our digital landscape became as large as it is, companies collected names and addresses and mailed direct mail such as postcards, brochures, flyers, etc. to potential and existing customers.

While traditional direct marketing still exists and can be an asset to your business, digital opportunities give business owners a world of choice when it comes to reaching their audience. It allows you to find out how Customers want to be marketed to and then give them what they want.

Database marketing is the place where companies collect customer data such as:

  • Names
  • Addresses
  • Phone numbers
  • Purchase history
  • Customer support history

Once collected, this information is used to create personal experiences for each customer and house personal and purchase information about them.

The Benefits of Database Marketing

Now that you understand what database marketing is, you can decide if it is right for you.

Tip: This is probably the right thing for you.

Regardless of the size of your business, it is absolutely crucial to the success of your business to keep your database fresh, constantly adding to it and nurturing it. You will see a number of benefits, such as:

1. “Own” your contacts.

Information is power, and when you put all the power in the hands of social media platforms, you are putting your future at risk. Social media is wonderful and should be part of your marketing plan, but it should not be the whole plan.

2. Speak directly to your audience.

It’s so loud out there! It’s impossible to turn on the television or radio or surf the web without being bombarded with marketing and sales messages that highlight the next best thing to you. absolutely must have.

These messages are meant to throw a wide network and get all customers in. However, you are knowledgeable. You know that in order to be “heard” over the noise, you need to tailor your message to your specific audience. Database marketing allows you to do this.

3. Identify avatars or buyers.

Who is your best customer? How do they live? What keeps them awake at night? What problem have you been able to solve? Where can you find more people who like them?

Database marketing allows you to understand your ideal customer and then target people who “look like” them on paper.

4. Segment your buyers.

Create different “audiences” based on their demographics, behaviors, and buying history. This helps you understand them better and offer them more of what they want and less of what will lose their attention.

5. Create loyalty programs that inspire repeat purchases.

Find out what is the best channel and time to contact your customers so you get maximum engagement.

6. Kick your customer service in high gear.

Give your employees the opportunity to see all the interactions a customer has had with your brand.

Database marketing can be the answer to your business’ prayers. Like everything else, of course, you need to do it properly to get a good return on investment. For that, we need to look at building a database marketing strategy.

Avoid these pitfalls in database marketing

Before we dive into strategy, let’s look at a few challenges you may encounter with database marketing.

1. Data loss

People are moving, changing jobs, changing names, giving up email addresses and starting new ones. Life changes like these can make their information relatively useless.

2. Data accuracy

Typing errors occur. Sometimes random, but sometimes purposeful. Some customers know that you will send them marketing emails once they have entered an email address and they do not want to hear from you.

It is okay. If they do not want to hear from you, you actually do not want to reach them because they are not your ideal audience.

While there is no easy way to avoid targeted typing errors, it is possible to avoid unintentional errors with drop-down menu selections instead of empty comment fields. You can also verify people’s information when you talk to them.

It is important to clean up your database frequently, clean contacts with outdated or inaccurate information and merge contacts with multiple profiles. This allows you to focus on reaching the people who could be your next customer or customer and take care of those who are already.

Use of customer data quickly and appropriately

If you’ve ever received an email two years after dealing with someone, it’s probably come as a shock. Chances are they did not update their database in a timely manner, so they completely missed the window to connect with you after the first interaction.

Do not make this mistake. Once you have received information, greet them in some way and then keep in touch with them on a fixed schedule to nurture the contact. You also want to keep their information to yourself.

Tips for Building a Database Marketing Strategy

Without a strategy, you just have a lot of meaningless data. Set your database to work for you by creating a healthy strategy right from the start. Here’s how you do it:

1. Identify who you want to reach.

Who do you want to trade with and what do they look like on paper? This can include demographics such as age and gender, marital status, income level and location. It can also include psychography such as their interests, activities and opinions.

Create an ideal customer profile or persona, then use it to decide what information to collect for your database.

2. Make it a team effort.

While it may have “marketing” in the title, database marketing can be influenced by several departments in your organization. The marketing, sales and customer service or support departments all have contact with potential and existing customers. Look for feedback from them to build the most efficient database.

Use the right tools.

There are countless options for database marketing software out there to meet your needs. Do some research, ask for recommendations, and find one that best suits your business. Once you have chosen a solution, give your employees the training they need to take full advantage of it.

4. Collect customer data.

Now that you know how to collect data, it’s time to decide what you need and get started. The possibilities are endless, but here are a few things to consider:

  • Demographic data – This includes gender, age, marital status, parental status, health and financial status.
  • Psychographic data – This includes interests, actions and opinions. What do they value? What type of lifestyle do they lead?
  • Acquisition data – Through which channel did they enter?
  • Technographic and activity data – How do they connect with your brand? Is it via a desktop or mobile device? Android or iOS? Do they use your website, social media sites or a mobile app to interact with your brand?
  • Transaction and correspondence data – How often do they buy from you and what do they buy? Have they approached outside of a sales situation for help of any kind?

5. Keep your data clean and secure.

As we mentioned before, it is very easy for data to become obsolete and useless. Review it often and back it up so that if something happens to your database, your entire customer history will not be lost.

6. Do not be creepy.

You can find out a lot about people on the internet. Just because you able to does not mean you ought to. Respect your customer’s privacy and do not collect or swing information about them that does not help to serve the ultimate goal of serving the customer and serving them better.

Examples of database marketing

Database marketing can be used in a number of ways and really depends on your needs and goals. Here are just a few of the ways in which you can incorporate database marketing into your business.

Provide great customer support.

It’s important to get customers, but if you can not keep them, just spin the wheels. Your customer service team must have access to your customer database. This allows them to review a customer’s purchase history when they call in with a problem.

Imagine that you know exactly what product they are calling about and express your ability to help with that product before they even get started on the problem. Your approach will be personal and will save them time to explain.

E.g: “Thank you for calling. I can see you just bought our new advanced alarm system. I can help you get it set up today.

Know what products and services your customer needs.

Having a talk about the weather is a great way to build a relationship with a customer or potential customer. Do you know what an even better way is? Not trying to sell them things they do not need.

For example: If you look at a customer profile, you can see that they live in a high-rise apartment, have no pets and have small children. You can refrain from trying to sell them the latest dog door.

Identify your best customers and potential additional sales.

When you understand who buys often and in large quantities, it becomes easier to identify opportunities for additional sales.

For example: Maybe your customer has been receiving a month’s wine for two years now. You just started a month’s cheese supplement. You can target them with emails designed to introduce this new product option.

There are a number of different ways to reach out to your existing and potential customers. A well-rounded marketing plan will include many of these. But if you really want to get the most out of your marketing money, be sure to include database marketing.

You reach out to the customers you want to reach and learn how to talk to them in a way that helps them hear what you’re saying. Your database will be the gift that keeps on giving.Marketing plan template

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