Ask Silver Bullet: December 2014

We are now told that Database Marketing is fast becoming the key element in marketing strategy and we all now must invest in often expensive Customer Relationship Management (CRM) systems, but what does database marketing actually mean?

Database marketing is a form of direct marketing and is a method of utilising the information (data) of current or potential customers. Customer Relationship Management Systems are simply the programmes used to analyse this data, breaking it down via various criteria in order to target specific groups and individuals

Unlike generic advertising, which could be missed by your target market, database marketing allows you to get your message directly to your target audience, increasing the efficiency and effectiveness of your communications and reducing wasted budget spend.

Building a database will give you information about not only current, but also potential customers with the data including various criteria - age, gender, geographical, behavioral, social and purchase profile history are the most common but seemingly innocuous questions such as choice of free time activities or preferred brands reveals information which is gold dust to marketers, as we want to know as much as we can about our customers. This understanding will shape all additional marketing techniques you employ, as you now know to whom exactly you want to get your message.

So how do you get this data? Database development must be a cultural practice within your organisation. Everyone in the organisation, especially those who are customer facing has to understand the value of information and should seek to collect data at every opportunity. Data can come from existing customers, lapsed regular customers and there is potential to undertake data collection exercises. Loyalty cards, for example, are an excellent form of data collection as every purchase is recorded allowing real profiling of the consumer.

You can also share information with partner organisations and even purchase data. Social media accounts are also effectively databases, with the large amounts of valuable information on profiles including likes and interests.

It is then imperative to tell consumers how their data is being used and how you are going to communicate with them and in many cases what incentives they will receive for consenting to the use of their data.

Consumers, however, are now beginning to understand how much the marketers want their information and researchers have begun to place values on data records. 78% of consumers are said to understand how important their data is. With estimations of customer data worth around £140 per record, this is not a cheap commodity.

Orange mobile customers stated 59% would not share email addresses and 39% would not share purchase history. This means the consumer is realising how important their personal information is, which has led to high levels of “opt outs” and consumers not giving away personal information.

However, we seldom want to be perceived as just consumers, but rather as individuals so the balance of the communications with your database becomes imperative and not just in the amount of direct communications but the tone. If the content is of interest and relevance there is increasing chance it will be read, understood and engaged with.

A constant sales message can make the consumer feel intimidated and lose interest in the communication. Should they become disenfranchised they may unsubscribe or worse, remove themselves from the database altogether and it is extremely difficult to get what were once loyal customers back into the fold.

Ultimately, a well-managed database marketing campaign can reap real rewards for your business, getting your message directly to your target market. It also allows you to develop a conversation with your customer and can be the most effective technique in achieving the marketing holy grail of customer retention.

Do you want to know more about Data Marketing or do you have another marketing question we can help with? Email your questions anonymously to Silver Bullet at hello@silverbulletmarketing.co.uk  or tweet (not so anonymously) to @SilverBulletPR  using the #AskSB