Database Marketing: What Is It & How To Do It Right

Every marketing professional who is aware of current trends knows that data is the secret to an effective campaign. But how can your customer database help you stand out from the crowd? Many brands turn to database marketing to establish deeper partnerships with their customers and build brand loyalty.

In this guide, we’ll try to define the term and look at why database marketing is an important business growth strategy. Let’s dive right in.

What is database marketing?

Database marketing, also known as customer relationship management (CRM), is a form of direct marketing. You collect the available data about your customers, such as their name, contact information, transaction history, and customer support tickets, and then use it to create a customized customer experience.

The goal of database marketing is to help businesses reach their target audiences more effectively by understanding their wants. You can use the data you gather to prepare targeted marketing activities and communicate the right messages to your customers. 

Why should you use database marketing?

Marketers have access to more data from customers than ever before, making database marketing even more critical. Companies must navigate a vast sea of data to generate more specific marketing campaigns that better resonate with existing and potential consumers.

According to Forbes, businesses that adopt data-driven marketing campaigns can drastically increase their competitive advantage. They are six times more likely to stay profitable. The study demonstrates the real potential of database marketing when it is applied effectively.

Furthermore, we need to remember that knowledge helps advertisers assess the precise moment communication is most important to a client or subscriber.

With the help of database marketing campaigns, you can enjoy the following benefits:

• Identify your most loyal clients and prioritize them.
• Gather customer feedback and utilize it to understand their needs. 
• Segment your audience into relevant categories.
• Build well-organized resources to refer back to, full of valuable data and knowledge.
• Improve brand recognition and perception.
• Update your marketing plans by using customer feedback and actions.
• Gain the ability to predict customer behavior and actions.
• Analyze insights in real-time at every phase of the decision-making process.

If you fail to use data to give your audience a customized experience at the right moment, you will end up wasting valuable opportunities to outshine your competitors.

How to do database marketing the right way 

How do you start developing your database marketing plan?

Most businesses use newsletter subscriptions, content downloads, and giveaways to help expand their database. The purpose of this approach is to acquire user feedback. Businesses usually gauge user opinion through customer feedback surveys and other methods such as observing review sites. The database marketing approach builds a pool of potential customers by giving them access to exclusive content. This could be a white paper or case study, a free trial of software for small businesses, or a webinar on a relevant subject. 

Another way of acquiring customer feedback is using a VoIP phone service along with the call center solution. This gives you an opportunity to collect data for customer relationship analysis and import your customer list to reuse it in your email marketing campaign.

After gathering the customers’ contact information, companies create email marketing campaigns to share tutorials, new offers, discounts, and product releases while tracking email engagement metrics. 

Because of its complexity, email marketing is one of the hardest digital marketing components to master. That is why it’s extremely important to think of implementing email personalization strategies.

Here are five database marketing tips you can use to boost your company’s marketing ROI:

Build a marketing database through great content

One way to gather contacts from your target market is to build meaningful, thought-provoking content as part of your inbound marketing strategy. You may present content in various formats, such as blogs, e-books, podcasts, or webinars, and offer access to exclusive content to site visitors in exchange for their email addresses.

The content you offer to your potential subscribers should be relevant and actionable. Unlike before, when you could simply repurpose five-year-old content for a new set of readers, the prevailing economic and social climate has changed a lot. It’s no longer enough to take an existing article and plug new numbers and figures into it. You might be looking at a top-to-bottom rethinking of your content marketing strategy.

This is a smart, cost-effective way to build your list, which requires only a small upfront investment. It also increases your credibility and can help establish you or your business as a thought leader in your niche. 

Inbound marketing (providing great content to entice your target audience to you) is an excellent addition to any list-building campaign and should be utilized. These efforts tend to yield significant returns on your investment in the form of qualified leads for your sales team.

Capture relevant visitor data 

At the very least, your database should contain names and email addresses. However, the more details you will get from users, the better you can serve them. You can utilize various methods of SEO data collection to capture relevant user data. 

You can collect visitor data through various touchpoints. Chatbots, for instance, are useful for answering frequently asked questions and can be configured to capture visitor data through their chats. Opt-in forms, on the other hand, ensure that your new subscribers are already interested in your product and have indicated that they would like to know more.

The important thing to remember is that your visitor data collection process should have a clear decision point where visitors can give their consent. Aside from complying with privacy regulations, it also increases open rates because only those who are really interested in knowing about your products and expertise will receive your marketing emails.

Look out for data decay and inaccuracy

As time passes, your contacts may resign from their jobs, deactivate their email addresses, or stop reading emails altogether. The customer data you have stored in your database, CRM systems, and automation software starts to “decay” as time goes by. Suppose you don’t take steps to clean it up periodically. In that case, the accuracy of the data will deteriorate, and your email campaigns will become less and less effective. 

Even the most optimistic figures available suggest that up to 30% of customer data becomes outdated every year.

As bleak as that may sound, there’s some good news: the problem is pretty easy to prevent and solve. Here are a few easy tips to help you: 

• Make sure you verify customer contact data before it gets stored in your database.
• Make periodic health checks of contact data a regular part of your marketing operations. For instance, you may use a tool for bulk email verification to scour your database for deactivated email addresses.
• Sync your clean contact data across systems using business data API synchronization. This technology will ensure that your business and marketing platforms use only one source of customer data 
• Ask customers to update their contact details periodically.
• Develop a data hygiene strategy by incorporating real-time email verification in your web registration forms, implementing a double opt-in process, and running a subscriber list through an email verification tool periodically.

These tips are straightforward, inexpensive, and reliable, and the tools used by companies to clean customer databases keep getting better and better. Today’s email verification tools, for instance, can be integrated with more email marketing platforms and boast deliverability rates of up to 99%.

Segment your data for more targeted campaigns

To make your database marketing campaign more effective, you need to group your audiences based on similar traits like geographical locations or shopping patterns. This will allow you to focus on designing targeted campaigns, which will eventually result in fantastic response rates.

To identify your audience segments, analyze their age, gender, income level, location, job, interests, and purchase history. You may then use this information to segment your leads into relevant categories for marketing purposes.

You also want to distinguish current clients from “prospects” and “suspects.” The term “prospects” means somebody that a salesperson is continually engaged with. A “suspect” is just a name on the mailing list, someone you suspect might be interested but with whom you have not had direct contact.

Using a drip messaging campaign, you may want to deliver targeted messages more regularly to individuals who have recently shown an interest in your products or services.

Use automation tools to act on marketing data on a timely basis.

Marketing automation systems make your work a little less tedious, ensuring that you can funnel your time and resources to other revenue-driving efforts.

Marketing teams often automate routine tasks, such as email marketing, social media sharing, and promotional ads, to provide their clients with a more customized experience. Marketing automation technology allows you to regularly send actionable, personalized content to people in your database. Over time, nurturing your leads using content marketing can convert them into customers. 

Once you start generating a steady flow of new organic leads and you are ready to expand your brand, it’s time to focus on developing an automated marketing strategy that will help you convert your new leads into paying customers.

Bottom line

We have entered the era of relationship marketing. Companies have shifted their attention from merely making one-time sales to building long-term customer relationships through a steady stream of valuable, relevant content and personalized communications. 

With thousands of advertisers competing every day for clients’ attention, building a robust database marketing strategy is crucial. Companies who put their clients’ needs, experiences, and preferences first will always come out on top.

It takes time to create a marketing database, and you cannot expect a huge pile of sales leads immediately. Following the right strategy will produce a steady supply of leads over the years as your database expands, and individuals become familiar with your brand and products. Give it time and stick with it!