Monday, August 31, 2009

Get a Better Understanding of Customers via DataBase

Most companies have a base of regular customers, but few know why those customers keep coming back. Quality, price, delivery, convenience; these are some of the factors that could explain why a customer continues to buy from your company but, unless you understand the factors behind your success, you cannot plan a customer retention strategy for the future. The discipline of building and using a database helps you concentrate on these important issues. By bringing this information together in a single database, you can get a comprehensive view of individual customers and customer groups and assess the effect of different marketing activities on their purchasing behavior. This is the kind of customer and market profile you can develop using database techniques:

  • Which market sectors do customers and prospects fit into?
  • How many are in each sector?
  • What products do they buy?
  • What other products could be offered to these sectors?
  • Which sectors offer the best growth opportunities?
  • Which are the most valuable sectors?
  • Who are the key customers in each sector?
  • How profitable are the key customers?
  • What is the cost of each customer?

What DataBase provides

The information in your database provides you with a detailed picture of the market and allows you to answer questions such as:

  • Who are our most important customers?
  • How many are there?
  • What characteristics do they have?
  • What other prospects have similar characteristics?
  • Are we generating the maximum amount of business from each customer?
  • Are we maximizing the business opportunities from each customer contact?
  • Do we really know what our customers want?
  • What factors and marketing activities affect their buying behavior?
  • Can we identify every product our customers might use?
  • Do we know every transaction they might want to make?
  • Is information available to everyone who might need it?
  • Is our organization giving the right information to the marketplace?
  • What would happen if we varied our marketing spend or used different marketing channels?

Database marketing is used by most Marketers

One of the most successful forms of marketing used by marketers is database marketing. Database marketing is essentially about sending targeted promotions to any segment of the customer and prospect lists and measuring the value of each individual customer and tracking the promotional efforts, measuring responses, purchases, and the return on investment for the spent on the promotional efforts.

Database marketing is essentially the technique of gathering all the information available about your customer, leads, and prospects into a central database. This central database is then used for the information, and it is this information then that drives all the marketing efforts.

This information collected in Database marketing is stored in a marketing database and then can be used at both the strategic and tactical levels to drive targeted marketing efforts.

A company that chooses to utilize the concept of database marketing for their marketing efforts continually gathers, refines, and analyzes data about its customers, their buying history, prospects, past marketing efforts, demographics, and etc.

The company also analyzes the data to convert the data into information and it is this information that supports all their future marketing and sales programs. Some of the more enlightened marketing companies also use customer and prospect interests and preferences, which are generally gathered from their web site, to tailor design the marketing efforts to the individual level.

Database marketing can also further be defined as a way of organizing a company's customer and prospect data so that it can be used more in a more effective manner in a direct marketing effort. Database marketing is also a way of organizing the whole marketing process. Database marketing allows the company to choose what to market to whom and when based on the sum total of the knowledge and experience that lies with a customer or prospect.