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Integrated Marketing Association

Database Marketing

The term database marketing refers to the practice of using data sets to optimize marketing activities. Database marketing enables brands to create targeted and personalized campaigns for more effective return on marketing investment (ROMI).

Depending on the type of marketing – B2C or B2B – marketers may collect different types of data. Both commonly use CRM (customer relationship management) systems to capture, store, and maintain customer and account data. Types of data stored for B2C companies usually include demographic information like names, email addresses, physical addresses, phone number, household income, home value, and past interaction data like past purchases, coupon redemptions, number of purchases, size of purchases etc. Types of B2B data stored or collected for B2B companies usually include name, job title, email address, physical address, company size, company revenue, industry, sic code, naics code as well as past purchase data and behavioral data collected if the company uses a marketing automation platform (MAP). MAPs allow companies to collect additional data like past website visits, number of pages viewed, emails opened, clicked, content downloaded and web forms filled out. MAPs do a good job of helping companies combine a person’s explicit data either purchased or captured on a web form and combining it with a person implicit behavioral data captured via a cookie.

Using database systems and tools, marketers can drill into large data sets to create subsets of consumers and/or businesses with common characteristics. For example, a brand may send a similar email campaign to customers who purchased the same or similar product or service (explicit data) vs sending a campaign out to a list of prospects who downloaded a similar piece of content (Implicit behavioral data).

As a technology-driven approach to marketing, one of the primary obstacles to a strong database marketing approach involves data quality. For database marketing to work, the data within the system must remain current and clean. Duplicates, outdated fields, and misinformation can lead to marketing errors that reflect poorly on the brand. To manage data quality, many organizations hire professionals who manage data cleanup tools and quality standards. You can also append missing data elements like address, phone, or email address including a person’s social media profile from Twitter, Facebook, or LinkedIn.

Any business can begin collecting consumer and customer data within several CRM tools in the marketplace today. Smaller businesses may start out with Excel spreadsheets for collecting and storing customer information before investing in a more robust software solution. Some companies have multiple databases for various products, customer transactions or behavior. This siloed data makes it more difficult for marketers to get a clear picture of the customer and prospect.

Thanks to technology improvements and the increased speed of the internet many companies have chosen to use SaaS solutions to help with their database and CRM initiative. SaaS stands for software as a service and doesn’t require a company to purchase and install expensive servers or hire IT staff to manage but rather use the internet to log into the internet and access a remote server to access a SaaS platform that helps host and manage their database.

There are other advantages to using SaaS databases including the ability to give other department’s access to your data or the ability to integrate other departments data with your data. The most common SaaS-based CRM solutions are Salesforce.com, Microsoft Dynamics, and Oracle On Demand. The benefits of hosting your data on these SaaS-based solutions is the ability to give the company one source of data for all departments to work from. Marketing can see the impact of their campaigns and the revenue generated and sales can see the behavior of their prospects and determine who is showing buying behavior vs. who is a tire kicker. This helps sales save their most precious commodity, their time. The executive team and financial departments can also forecast sales and inventory levels in real time if everyone is using the same database or CRM to manage the business. Service departments can also benefit from these databases and CRM solutions by seeing a customer’s past purchases and complaints to help manage support related issues.

There are some disadvantages to using SaaS database solutions which are usually around flexibility of customization and data security. Data breaches have become more and more frequent so many companies prefer to host their databases and CRM solutions on premise. This doesn’t stop potential data breaches but it does give the company more control over functionality and the security used to protect their data.

IMS has a list or CRM Solutions on Martec Showcase and a list of database developers on the IMA vendor directory that might be helpful.

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