Database Marketing: Mining for Customer Gold

Database marketing is the direct result of the sweeping social changes that have impacted advertising and marketing around the world. Attitudes and behaviours are changing towards the unrequested, unsolicited messages of advertisers. Customers are going beyond “cocooning” and beginning to “burrow” even further for greater safety and comfort, making it far more difficult for advertisers to get a hearing ear.

It’s an interesting paradox that on one hand, consumers are demanding more choices and yet on the other hand they’re confused by all of the choices confronting them. Consumers want to be treated, not simply as statistics, but as individuals. That’s the strength of a well executed database marketing program – the ability to market to a market of one. Traditional media simply can’t speak to these consumers effectively.

In virtually every business today, people are searching for ways to get more “bang for their buck”. Budgets for traditional marketing and advertising are shrinking, while the number of media choices available are growing dramatically. The shrieking over abundance of ad messages clutter the mind making it difficult, if not impossible, to break through and make a favourable impact.

Savvy marketers aren’t satisfied with audience measurements based on the industry standard of reach X frequency. Media must deliver more than tonnage in terms of audience numbers. They must also demonstrate an audience that is responsive to their advertising offer. Customer response rates, once the domain of direct marketers have become the new marketing focus.

Until now, most local marketing programs aimed at making the sale to the widest possible cross section of customers in a “one-size-fits-all” approach. What was once impossible for the majority of small town, small business marketers – locating and selling to the most logical product user one-to-one, with a message tailored to that particular individual – is now commonplace.

With regards to targeted, focused marketing efforts, the smallest “mom and pop” business can now compete with the giants who previously dominated by virtue of their access to massive computing power. Database marketing can be defined as managing a relational database of comprehensive, up-to-date, relevant data on customers, inquiries, prospects and suspects to identify the most responsive customers for the purpose of developing a high quality, long-standing relationship of repeat business.

This is accomplished by developing predictive models which enable us to send desired messages at the right time in right form to the right people – with the result of pleasing our customers, increasing our response rate per marketing dollar invested, lowering our cost per order, building our business and increasing our profits.

When our grandfathers ran their businesses, the only database marketing systems they had were in their heads or on time-worn index cards. Now the most basic desktop or laptop computer provides the great leveler.

What kind of information should you be collecting?

Start with a name, mailing address, phone number and email address. As the relationship with your customer continues, look for ways to collect more information regarding their age, occupation, marital status, family size, home ownership status, anticipated major spending plans or investments, etc. The information file should contain a record of their history with your company including the recency, frequency, and monetary value of their business transactions to date.

The qualitative, proprietary database you create will become your most valuable asset. It is the heart and soul of your business venture and it needs to be protected like precious gems.

Having a better understanding of your customer will help you select the most appropriate media to communicate your small business marketing message, allowing you to adjust the tone and content to strike a responsive chord.

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