Database Marketing – Targeting Existing Customers

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Database Marketing is the process of taking existing customer, market and competitive data to create targeted marketing messages to retain existing customers, acquire new customers and ultimately to increase sales. In this article, we will look at how Database Marketing can be used to retain and improve relationships with existing customers.

"Database marketing’s goals are simple: improved customer retention, cross-selling, upselling and reactivation; better rates of customer acquisition; and accomplishing the above with a higher return on investment than other methods."

– Arthur Middleton Hughes, vice president of The Database Marketing Institute

In today’s volatile economy and extremely competitive marketplace it is becoming vital that a business not only know who their customers are, but to also create positive relationships with those customers for retention and increased sales. Database Marketing is one tool that helps today’s innovative companies stay ahead of their competitors by continually providing incremental value, innovative services and products to their customers.

Some companies that do a great job in delivering a personalized targeted message to existing customers are Amazon and American Muscle. Amazon uses customers purchase history, search history, viewed items and the customer’s personal wish lists to deliver personalized marketing messages to their customers. Amazon uses this information to let the customer know about related products and sale items that the customer may be interested in purchasing. At American Muscle, a user’s profile includes information about their vehicle (make, model, year, etc.) that allows American Muscle to send the customer specific marketing messages about parts for that vehicle.

The first phase in creating a successful Database Marketing initiative is to define the business case and goal for the initiative and analyze your data to validate the area of opportunity. Trend analysis and predictive analytics will help you to see where the opportunity exists to best maximize the return of your planned marketing campaign and how to provide the best message to your customers to achieve your goal.

Another phase of a successful Database Marketing initiative, is having relevant and current customer data (customer intelligence) that provides insight into your customers. Once we have the data, the data is analyzed to create actionable insights, impactful data visualizations and innovative marketing initiatives. Just having data isn’t enough, data without visualization or insights is just numbers.

Once your marketing campaign has been initiated, tracking measures need to be in place to evaluate and possibly modify your approach. Having the right metrics and visualizations will help you easily see the effectiveness or ineffectiveness of your campaign and allow for potential corrections to your approach to improve your message.

Knowing who your customers are and what their purchase history has been (recency, frequency, monetary), will allow you to customize your approach to create the best message to the targeted customers and maximize the benefits of your Database Marketing initiative to improve the relationship with your existing customers.

– Kevin Konishi, Senior Manager