Database Marketing: Everything You Need to Know

​Submitted by: Ivan Serrano
Ivan is a  a social media, personal finance and business journalist from The Bay Area In Northern California.

​Database marketing is a form of marketing that uses comprehensive databases of customer information to enable targeted, and therefore more effective, marketing campaigns. Information such as the name, address, gender, age, or demographic is a popular dataset to have compiled in your database to be better aware of your targeted market. Additional information that can be included in such a database is purchase histories, emails, and social media data. Of course, all information must be legally obtained. 

​An example of database marketing used for a company’s targeted marketing could be a list of customers under age 18 who might be interested in a new promotion for college student discounts via email. Another example is a list of customers who bought an older version of a product who might be interested in a discount for a new purchase when promoted via Facebook. Thus, there are many different ways to use publicly accessible information about consumers to individually promote your products or services to them.
 
The goal with database marketing is to increase the relevancy of advertisements to customers’ needs and desires, with the hope of increasing conversions (purchases of a product or page views on a site) as a result.

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Who Should Use Database Marketing? 

​​Database marketing can be used by a wide variety of businesses. For instance, your local diner can use quick forms obtained after customers pay to get emails for discounts. After doing this, the managers can match up receipt number with the email address and the food ordered to compile data together. Then, the restaurant could run a promotion on breakfast options and could send this promotion out via email to everyone who had previously ordered breakfast items there. The idea of database marketing is that this method would lead to more purchases and therefore more profits than if the managers had emailed all customers about the breakfast promotion.
 

​Even though any business can utilize database marketing, there are some that it can be more useful for. For instance, restaurants may be more willing to send out a breakfast promotion to all previous customers, while a retail chain that sells general clothing would want to avoid sending a promotion for young boy’s clothing to an elderly man.
 
Secondly, database marketing can be more useful for larger businesses than smaller one. Larger companies may generally have a wider variety of customers, products or services to keep track of that appeal to different consumers and require more customized marketing efforts. Plus, larger places will be able to directly benefit from automated database marketing. Using software to automate your marketing can save you a lot of time in your efforts to increase conversions.

Secondly, database marketing can be more useful for larger businesses than smaller one. Larger companies may generally have a wider variety of customers, products or services to keep track of that appeal to different consumers and require more customized marketing efforts. Plus, larger places will be able to directly benefit from automated database marketing. Using software to automate your marketing can save you a lot of time in your efforts to increase conversions.

Who Is Database Marketing Most Useful For?

​Database marketing is most useful for customers who have opted into the service. This is referred to as permission marketing. When customers freely have given you their contact information and simultaneously concretely expressed interest in receiving information from your business about promotions or sales, this means you will avoid the murky ethical waters of questions regarding data privacy in marketing campaigns.

Not only that, but customers who have previously expressed interest in receiving such promotions will be more amenable to them when they come to their mailbox (either online or in person). This means that you will have a higher conversion rate and therefore higher profits from your marketing campaigns.

Database Marketing Security

One of the most important questions in developing a database for your business’s marketing purposes is how to keep sensitive information secure. Customer privacy is vital in an increasingly connected world. One way to be positive that all data remains private and secure is by encrypting it. Ensuring that whatever server your business uses, whether in the cloud or in the house, is 100% secure is ideal. Furthermore, it’s pertinent to customer privacy that none of the information you have collected is personally identifiable, or can be traced back to a specific person.
 
In conclusion, database marketing is growing in popularity across industries and in large and small companies alike all around the world. In order to get ahead with your marketing campaigns, you should consider whether you and your consumers would benefit from database marketing. There are a lot of resources around the Internet that can help you determine if database marketing is for you, and how to use and implement it if so.