Database Marketing

Learn all about marketing by database

Database marketing has really taken off since the turn of the 21st century, and has the potential to connect with a more receptive audience than its cousin, direct marketing. It uses all the same tools to reach customers – targeted mailings, telemarketing and email – but marketing by databases culls information from consumer research resources and tailors communications to reach parties that have a greater chance of wanting to receive the message.

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How Database Marketing Works

In database marketing, consumer behavior, preferences and interests are tracked in a searchable information pool which is usually administered by market research services. There are numerous techniques used to generate the information in the database, including surveys, purchasing histories and shopping habits. In some cases, consumers are aware that they are providing this information; in others, these facts are gathered without the consumer's knowledge. The former approach is more ethical, but the latter is considered very reliable.

Advertisers use database marketing software to populate a list of consumers that meet their search criteria and desired profile. Then, unsolicited direct marketing materials are sent to those consumers in the hopes that the potential customers on the list respond favorably to the soliciting party's call to action.

Database marketing services are available to help you build your lists of potential customers or clients and come up with effective advertising materials. These firms typically specialize in database marketing or direct marketing efforts and don't dabble in other forms of advertising.

Pros and Cons of Using a Marketing Database

The key advantage of using a marketing database is that you are operating with the knowledge that the consumers you're targeting have an expressed interest in your products or services. This greatly improves the response rates when compared to traditional direct mail marketing. You also enjoy cost control over your ad campaign and get concrete numbers that tally your success rates and results.

By contrast, the major disadvantage is that you risk alienating your potential customers, who may feel that database marketing is underhanded, sneaky and unethical. Many consumers have problems with private data about them being collected, shared and sold without their knowledge, so it can pay to go to some effort to mask the nature of your campaign and the means you used to get the customer's contact information.