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The 15 Essential Database Marketing Techniques

Guest blog post by Diana Beyer.

Database marketing is the process of collecting, analyzing, and identifying important information about you customers.

The information comes different channels like sales records, email, cards warranty and etc.

With this is information you can sharpen your marketing campaigns to focus on what’s important; the client.

Database marketing techniques help you with:

  • Improving all your marketing efforts
  • Increasing sales
  • Retaining and getting more customers

If you’re still not convinced, imagine having a complete profile about your customers. You’d know their age, gender, buying habits, the things they need, and any other possible information.

Any business with such complete information can use it to increase sales and ultimately profits.

This is like stumbling in a golden mine that only you know about.

Customers want to feel special, and the only way to give them that is by learning as much as you can about what they want and need.

So below you’ll learn techniques that are essential for you to successfully use your database and boost your sales.

Customer Lifetime Value

The CLV is a model widely used as a database marketing technique that can estimate what the lifetime relationship between the customer and the business will be worth to the latter. This technique has gotten more accurate throughout the years and is used by any respectable marketing expert.

With this information, businesses can make a precise estimation of their revenue, therefore company, potential. This data also helps you evaluate what are the areas that you can improve to increase this number.

Customer Communications

The amount of data a business produces can give enough information about who buy their products, and that opens the possibility for improvement in many different areas.

Customer communication is one of them. Clients love to feel special and that their purchase is important. So the best way to do that is by using the data on your customer to improve the channels that you use to communicate with them.

A few reasons for you to use your database in customer communication

  • Clients that feel important buy more
  • Increases Loyalty to your brand
  • Increases sales

RFM (Recency, Frequency, Monetary Analysis)

No business wants to waste their time promoting something to a one-time customer or someone that subscribed to your website and never bought anything. This is when this technique comes in handy.

RFM has been around before the internet, but many companies don’t use it right. First, RFM is a technique that calculates the customers that made recent purchases, that bought something recently, and that spends the most in products.

With this kind of data, you can target your marketing efforts on specific customers that will bring you the desired conversion.

RFM helps you with:

  • Not wasting time and money in the wrong prospect
  • Creating a focused marketing campaign
  • Achieving great conversion rates by using the 80/20 rule

Analytical Software

Analytical software is the next step in database marketing. With this technique, you have a software interpreting your data.

In today’s world, you have a website, app mobile, social media, and other channels that gather a lot of data on your customers, and having a software that helps organize all that for you can be a life-saving.

So the software is really useful if you don’t have an expert to analyze all the data generated by your customers to learn and predict their behaviors.

Loyalty Programs

As you will notice throughout this article, the database allows you to be focused. This means getting as specific as you can about who your clients are.

All the purchases that your customers make generate a sales history. With this information, you can create loyalty programs.

You basically determine what your customers want the most from your business and offer them in a loyalty program. This is the best way to secure sales and beat the competition before there’s even one.

Email

With the advent of social media and many other tools, email might have become obsolete for a few things, but what email still does best is sales.

Any blog or website has a field where you can subscribe using your email. With email, you can better communicate with your customer and learn their needs.

Email is a great sales tool; since you can also see which emails your clients are opening and which ones they’re not, using that to improve your approach.

Customer Segmentation

Gone are the day when salespeople knew their customers’ names by memory. Today you sell for thousands maybe even millions, so you have to keep a database to store all the information.

Customer segmentation is when you separate this information in demographics. So you can create segments and marketing efforts for each segmentation like young males.

This is really helpful for companies that have a diverse customer base. You can attend everybody’s needs, keeping all your clients happy.

Multi-channel marketing

This is usually referred to the customer that buy retail, catalog, and online. The database that tackles all the angles to give the best experience for the client no matter where they’re buying is ideal.

Clients that buy in multi-channels buy more than single-channel buyers. But you also have to remember that nowadays people are buying through mobile apps and social media, and not just websites.

This is all great news, the more you improve the customer experience throughout all your channels the more loyal clients you’ll have.

Profitability Analysis

This is similar to the RFM technique, but they’re not the same. With profitability analysis, you can measure the profitability of each customer.

Before this, it was hard to quantify you customer’s profitability. Now you can use that to refine your marketing efforts and your pricing strategies.

Profitability analysis helps you with:

  • Discovering unprofitable customers
  • Learning what your profitable customers want and how much they’re willing to pay for it
  • Increasing your profits

Treating customers differently

At first, this may sound horrible, but every big company does it. Think for instance banks and airlines.

Remember the 80/20 rule, 80% of your revenue comes from 20% of your customers. So it only makes sense to spend more money on your marketing efforts -that you wouldn’t be able to spend otherwise on all your customers- on them.

This way you retain them by creating satisfaction, and you also incentive the other customers to move up the ladder.

So you can:

  • Create Gold and Platinum programs
  • Give special discounts
  • Offer special services

Penetration Analysis

This technique can be really powerful if used right. Using the database, you can make an analysis to determine how much sales you’re making in each zip code, or age group, or income.

You can then use this information to fix a possible problem and increase your sales in that segment.

Predictive Models

This database marketing technique can be really power when combined with customer communication.

It consists of the use of the data that you have on your customers to predict which ones will respond to a marketing campaign and which ones will ignore it.

This information helps you to refine your campaign to increase the number of conversions and reduce the number of customer attrition.

So predictive models help you with:

  • Improving marketing campaigns
  • Reduce customer attrition
  • Increase sales

Appended Data

Appended data is when you link varied information to a name or address. In marketing, you’d use this to organize the information on your customer more efficiently.

For example, you’d put the name of the client with their address, and other information like gender, age, ethnicity, income, net worth, and etc.

With this information, you can create predictive models. You can learn more about your customer, and what they are more likely to buy.

This helps you offer a better service that has everything your clients need.

Website

In this day and age, every business needs a website, even if you don’t sell online. A personalized website with cookies can make wonders for your business.

A smart, interactive website can bond with the client and even sell. The website is also important because clients like to do their research before buying anything. And if you don’t have a web presence they may think you’re not legit.

Conclusion

Remember to use these techniques so you can:

  • Improve your services
  • Increase the value of your customer
  • Retain and get more clients
  • Increase sales
  • And increase profit

So if you use this powerful database marketing techniques, you’ll be on your way to optimizing your whole marketing campaign.

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