The Ultimate Guide to Database Marketing
No matter what your service or product is, you need to get in front of potential customers in order to make the sale. Many businesses put their faith in social media.
While social media platforms are an amazing way to get in front of people, they have two major drawbacks. First, you may have tens of thousands of followers on your platform of choice. However, thanks to algorithms that few (if any) humans understand, you only reach a small percentage of those followers with any given post.
Second, what happens if that platform ever goes away? Don’t think for a minute that you’ll receive a neat list of contacts. If a platform ever shuts down, your audience will evaporate in seconds.
Fortunately, knowing this is half the battle. Now that you understand that you don’t “own” your contacts through social media, it’s time to look at how to safeguard your audience and take ownership of and responsibility for their contact information and data.
This is called Database Marketing and you’re about to learn why it’s essential to your business as well as how to utilize it properly.
What is database marketing?
Before our digital landscape became as vast as it is, businesses would collect names and addresses and send out direct mail pieces like postcards, brochures, flyers, etc. to potential and existing customers.
While traditional direct marketing still exists and can be an asset to your business, digital options give business owners a world of choice when it comes to reaching their audience. It allows you to figure out how customers want to be marketed to and then give them what they want.
Database Marketing is where businesses collect customer data such as:
- Phone numbers
- Purchase history
- Customer support history
Once collected, this information is used to create personalized experiences for each customer and house personal and buying information about them.
The Benefits of Database Marketing
Now that you understand what database marketing is, you can determine if it’s right for you.
Hint: It’s probably right for you.
No matter the size of your business, keeping your database fresh, constantly adding to it, and nurturing it is absolutely essential to your business success. You’ll see a variety of benefits, such as:
1. “Own” your contacts.
Information is power, and when you put all of the power in the hands of social media platforms, you put your future in jeopardy. Social media is wonderful and should be a part of your marketing plan, but it shouldn’t be the whole plan.
2. Speak directly to your audience members.
It’s so loud out there! It’s impossible to turn on the television or the radio, or surf the web without being bombarded with marketing and sales messages touting the next best thing that you absolutely must have.
These messages are meant to cast a wide net and reel in any customers they can. You, however, are savvy. You know that in order to be “heard” above the noise, you’ll need to adjust your messaging to your specific audience. Database marketing allows you to do this.
3. Identify avatars or buyer personas.
Who is your best customer? How do they live? What keeps them awake at night? What problem of theirs have you been able to solve? Where can you find more people just like them?
Database marketing allows you to understand your ideal customer and then target individuals who “look” just 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.
Figure out what is the best channel and time to contact your customers so you receive maximum engagement.
6. Kick your customer service into high gear.
Give your staff the opportunity to view all of the interactions a customer has had with your brand.
Database Marketing could be the answer to your business prayers. Of course, like anything, you have to do it properly to see a good return on investment. For that, we need to look at building a database marketing strategy.
Avoid These Pitfalls of Database Marketing
Before we dive into strategy, let’s look at a few challenges you may encounter with database marketing.
1. Data Decay
People move, change jobs, change names, abandon email addresses, and start new ones. Life changes like these could render their information relatively useless.
2. Data Accuracy
Typos happen. Sometimes accidentally, but sometimes purposefully. Some customers know that you’ll be sending them marketing emails once they provide an email address, and they don’t want to hear from you.
That’s okay. If they don’t want to hear from you, you don’t actually want to reach them because they aren’t your ideal audience.
While there’s no easy way to avoid purposeful typos, avoiding accidental errors is possible with drop-down choices instead of blank comment boxes. You can also confirm people’s information when you speak with them.
It’s important to clean up your database frequently, purging contacts with out-of-date or inaccurate information, and merging contacts with multiple profiles. This allows you to focus on reaching the people who could be your next customer or client and take care of those who already are.
3. Using Customer Data Quickly and Appropriately
If you’ve ever received an email two years after doing business with someone, it’s probably come as a shock. Chances are, they don’t update their database in a timely fashion so they completely missed the window to build rapport with you after that first interaction.
Don’t make this mistake. Once you receive information, greet them in some manner and then touch base with them on a regular schedule to nurture the contact. You’ll also want to keep their information to yourself.
Tips for Building a Database Marketing Strategy
Without a strategy, you’ve just got a whole lot of pointless data. Put your database to work for you by creating a sound strategy from the very beginning. Here’s how:
1. Identify who you want to reach.
Who is it that you’d like to do business with and what do they look like on paper? This can include demographics like age and gender, marital status, income level, and location. It might also include psychographics such as their interests, activities, and opinions.
Create an ideal customer profile or persona and then use this to determine what information you need to capture for your database.
2. Make it a team effort.
While it may have “marketing” in the title, database marketing can be influenced by multiple 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 effective database.
3. Use the right tools.
There are countless database marketing software options out there to meet your needs. Do some research, ask for recommendations, and find one that suits your business best. Once you’ve chosen a solution, provide your employees with the training they need to utilize it fully.
4. Gather customer data.
Now that you know how you’re collecting data, it’s time to decide what you need and get started. The options are endless, however 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 what channel did they enter?
- Technographic and Activity Data – How do they connect with your brand? Is it through a desktop or mobile device? Android or iOS? Do they use your website, social media pages, or a mobile app to interact with your brand?
- Transaction and Correspondence Data – How often do they purchase from you and what do they buy? Have they reached out outside of a sales situation for assistance of any kind?
5. Keep your data clean and safe.
As we mentioned before, it’s very easy for data to become outdated and useless. Review it frequently and back it up so if something happens to your database, your entire customer history is not lost.
6. Don’t be creepy.
You can find out a lot about people on the internet. Just because you can doesn’t mean you should. Respect your customer’s privacy and don’t collect or brandish information on them that won’t help serve the end goal of earning 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 you can incorporate database marketing into your business.
Provide amazing customer support.
Acquiring customers is important, but if you can’t keep them, you’re just spinning your wheels. Your customer service team should have access to your customer database. This allows them to review a customer’s buying history when they call in with an issue.
Imagine knowing exactly what product they are calling about and expressing your ability to help with that product before they even launch into the problem. Your approach will be personalized and will save them time explaining.
For example: “Thanks for calling. I see that you just purchased our new state-of-the-art alarm system. I can help you get that set up today.”
Know what products and services your customer needs.
Having a chat about the weather is a great way to build rapport with a customer or potential customer. Do you know what’s an even better way? Not trying to sell them things they don’t need.
For example: Looking at a customer profile, you can see that they live in a high-rise apartment, have no pets, and have small children. You can skip trying to sell them the latest doggie door.
Identify your best customers and potential upsells.
When you understand who buys frequently and in large amounts, it becomes easier to identify options for upsells.
For example: Perhaps your customer has received a wine-of-the-month for two years now. You’ve just started a cheese-of-the-month add-on. You can target them with emails designed to introduce this new product opportunity.
There are a variety of ways to reach your existing and potential customers. A well-rounded marketing plan will include many of these. However, if you’d really like to get the most bang for your marketing buck, make sure that you include database marketing.