A Complete Guide to
Database Marketing

The phrase says it all. Data is one of the most valuable resources, and it finds application nearly everywhere online. It is the virtual currency of the internet!

But unlike oil, data isn’t a scarce resource. In fact, too much of it can be a bad thing. And just like oil, data is only valuable when it’s processed and refined. It isn’t of much use in its raw form.  This is where database comes into the picture.

Databases are sets of compiled information that is structured and classified for future usage. They can be easily accessed and continuously updated. By organizing vast amounts of complex data, they make it much easier to use and to work with.

As the internet assumes more significance in our lives, so does data. This spells a break from the way things were always done.

In the past, marketing tended to appeal to the masses. Marketing efforts focused on creating content that would resonate with a majority of their target audience, hoping that a few would convert to paying customers.

But over the last decade, this has changed.

With big data, it’s possible to track and record nearly everything. This means that it’s possible to know who could be interested in your products, what they could be interested in, and where they live.

Using the data that your (to-be) customers provide, you can map out extensive profiles of them.  In other words, customer segmentation is over. Each individual customer is his own segment. The focus has shifted from the popular to the personal.

If you are a digital marketer looking to generate more leads with big data, you have come to the right place.

This is our tell-all guide to database marketing.

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    Chapter 1 :

    An Introduction to
    Database Marketing

    Imagine that your company is developing an exciting gadget that is unique in the market. You are launching the product next week, and you have already started to spread the word.

    How would you get maximum publicity?

    What are your options?

    One, of course, is to do it the traditional way. With the help of advertisements and billboards, you can broadcast your product in your locality. But that’s no crowd-puller. Another option would be to obtain a list of people in your neighborhood and directly mail them.

    But, again, how effective is that going to be?

    Many of the recipients will not show interest in your product. And, there might be a significant number of people who do show interest but don’t live in your area. It would be great if you could  click a button to get a list of people in and around your area that are actually interested in your product.

    That’s precisely what database marketing helps you do.

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    What is Database Marketing?

    Database marketing is a new form of direct marketing. It collects and tracks customer data, such as names, contact details, addresses, and previous transactions. This information is then used to create a highly personalized experience for each customer.  

    The methods of data collection can vary.

    Data is usually obtained from application forms, contest entry forms, subscriptions, and other legally compliant methods. Traditional marketing is dependent on the hope that at least some of its viewers respond positively.

    Database marketing takes it to another level by seeking to understand what customers want, as well as how they receive your message.

    These insights are then applied to fulfill the customer’s needs. In our previous example, your company could create a list of users who purchased similar products earlier.

    They are the ones who are most likely to show interest in what you have to sell. Once built, these databases allow you to identify and get in touch with prospective leads.

    A Brief History of Database Marketing

    Database marketing developed during the 1980s as an improvement on direct marketing.

    Technology that could record customer responses gave way to a marketing philosophy that focused on two-way communication with the customer.

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    These changes were, in part, necessitated by an evolving business environment.

    Direct marketing ceased to be as effective as it once was, as the customer became the center of all business operations.

    The decline of traditional media also contributed to these developments. Now, marketers needed to find newer ways to reach their audience. 

    With technological advances, data was no longer stored in a physical form, but on computers.

    This offered several advantages, such as accessibility, ease of usage, and security. These older databases paved the way for database marketing as we know it now.

    Benefits of Database Marketing

    As a result of today’s landscape, the modern customer expects a highly personalized experience with your brand.

    To deliver this, marketers need to be aware of every point of the customer’s journey and engage them in a meaningful way.

    They also need to know the customer’s tastes and preferences.  

    Database marketing makes this much easier than it would be otherwise. 

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    These are some ways in which database marketing can help your business:

    Personalization

    You can deliver highly personalized messages to both leads and customers based on their preferences

    Channels

    Database marketing can help you figure out the best channel for your business to reach prospects

    Detailed customer
    classifications

    It makes it easy to recognize both first-time buyers and loyal customers. You can also segment customers based on demography, interests, and other relevant criteria

    Efficiency

    Database marketing quickly identifies prospects who are unlikely to respond, ensuring that you don’t waste time chasing cold leads.

    Improved Customer
    Service

    By knowing your customers’ pain points, your support staff are better equipped to deal with their grievances

    Personalization

    You can deliver highly personalized messages to both leads and customers based on their preferences

    Channels

    Database marketing can help you figure out the best channel for your business to reach prospects

    Detailed customer
    classifications

    It makes it easy to recognize both first-time buyers and loyal customers. You can also segment customers based on demography, interests, and other relevant criteria

    Efficiency

    Database marketing quickly identifies prospects who are unlikely to respond, ensuring that you don’t waste time chasing cold leads.

    Improved Customer Service

    By knowing your customers’ pain points, your support staff are better equipped to deal with their grievances

    Key Takeaway: Database marketing is a natural and much-needed improvement in direct marketing that is appropriate to the digital landscape. It is the groundwork for much of your marketing efforts.

    To learn how to use database marketing for your business, continue reading… 

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    Chapter 2 :

    Getting Started with
    Database Marketing

    Database marketing starts by collecting information about your prospects and customers so that you can understand them better.

    This will help you to find out who your customers are, select your target markets, and tailor your messaging.  

    Here are the first few steps to getting starting with database marketing:

    Invest in a database

    Buy your database from a reliable provider. A robust database can help you find your most valuable prospects. A reputable provider will be happy to provide small samples of their databases so that you can be confident that what you are about to invest in is the real deal.

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    Grow your customer list

    Make use of every opportunity to collect and store customer data. Collect information from business cards, CTA sign-up forms, surveys, and transaction history. Record it in your database to give them a more personalized experience.

    Update your data

    Data isn’t like wine or French cheese. With time, the likelihood that it will become redundant is almost inevitable. Make sure you always have the latest information about your prospects. Keep track of addresses, name changes, and any other information that might be relevant to your business.

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    Keep your database clean

    Not every lead is a customer, and your database is likely to contain many inactive leads. Don’t hesitate to delete portions of your database if the information is no longer useful.     Now that your database is set up, you can now begin to reap its advantages. Start with the following steps that are mentioned below:

    Targeted messaging

    Analyze your database and become familiar with your customers, their preferences, and purchase history. Start email and text message campaigns by sending out content that is relevant to them.

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    Measure your success

    Follow up with your response rates, email open rates, and other analytics. If a customer shows interest in a product without buying it, make sure you follow up with an email and an incentive to buy it.

    Calculate customer lifetime value

    Customer lifetime value is a predictive marketing model that estimates what the lifetime relationship of a customer will be worth to your business. It identifies your most valuable customers as well as gives insights on what you can do to retain their business.

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    business operations

    Use analytical software

    The need for businesses to track their customers’ behavior across channels is increasing. Analytical software can create information and instant reports that can help define your future business strategies.

    Loyalty programs

    As databases contain information about sales history, database marketing enables loyalty programs. This allows them to engage and reward long-time customers, which incentivizes them to choose your business.

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    benefits of database marketing

    Effective Database
    Marketing Strategies

    You must have a well-planned database marketing strategy to make the most of it. These are steps you can take to ensure that happens:

    Segment your target audience

    Build an ideal customer profile for your product, and use it to decide what information is most important. Factors such as age, income, job position, and interests are relevant information for most businesses.

    Update your data

    Invest in CRM software that tracks and updates profiles when customers enter new information. Use online tools that protect against data decay. Safeguard your investment from power outages or technical glitches by investing in the right support software.

    Gather customer data

    • Acquisition data: What channel did a new customer come from?
    • Demographic data: What is the customer’s age, gender, education level, marital status, etc.?
    • Psychographic data: What are their individual perspectives, interests, and values?
    • Activity data: What are their interactions with your website and social media pages?
    • Technographic  data: What devices do they use while interacting with your brand?
    • Transaction data: How frequently do they purchase from you, and how much do they spend each time on average?

    Respect customer privacy

    It is necessary to remember that your customers’ privacy is to be respected at all times. Personalization is all about providing the most relevant message to your target audience, not showing off about how much you know about them.

    Key Takeaway:  Your database is the most crucial tool in your business strategy’s arsenal. Not only can it provide you with information on how to get in touch with leads, but it can also offer several valuable inputs on what to look out for and who to target. Once you access this information, plan your strategies accordingly.

    Chapter 3 :

    How database marketing
    can change email effectiveness

    According to a report by Adestra, email marketing was the best marketing channel in terms of ROI.

    68% of the companies that participated in the study rated email marketing as “good” or “excellent.”

    As a cost-effective marketing technique, email marketing offers measurable results for businesses.

    It keeps customers curious about new deals, ensures leads remain engaged and makes it easy to track your progress.

    These are some ways in which database marketing can make your emails more effective:

    With a database, you can track and record users who show a genuine interest in your product. Once you can reach out to them, you will find customers who are more than happy to endorse your brand.

    Personalized messaging

    With the help of customer data, you can send out personalized messages to your subscribers. Something as simple as addressing the reader by name can be very useful in boosting open rates. On average, regular emails generate $0.11 in revenue per mail, while personalization increases revenue by six times.

    Subscriber Segmentation

    Segmenting your audience lists by industry, company size, and sales cycle. This ensures that customers receive only information that is most relevant to them. It also lends the element of personalization, which is essential to the modern customer. This, in turn, increases open and response rates, revenues and leads.

    Automated email campaigns

    With the help of marketing automation software, you can send trigger-based emails. Trigger emails do much better than traditional emails in terms of open rates (95% higher), click-through rates (almost 2x), and conversions (40% more).

    Clearing out Inactive Contacts

    At any given time, a large portion of those you mail are going to keep your emails unopened. Find out those who are inactive and show little interest in your products. Then, you can redirect your efforts towards the leads that are most important to you, and spend less time chasing cold leads.

    Key Takeaway:  In terms of ROI and reach, email marketing trumps all other channels, including social media. When you add a clean and reliable database to the mix, it becomes an even more effective channel.

    When done right, email marketing with the help of a database will provide your business with the vital boost it needs.

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