database marketing

The Ultimate Guide to Database Marketing: Examples & Benefits

There seems to be a lot of confusion these days as to what database marketing really is.  

In this guide, we will cover:

(HINT: use links above to go directly to a specific topic)

 

What is Database Marketing?

Database marketing, also known as Marketing Customer Information File, refers to the collection of customer data in order to understand customers’ needs and offer personalized communications that address them. Simply put, it’s about understanding and managing your customer database.

A marketing database contains data elements such as name, email, phone number, job title, company revenue, purchase history, lifetime value, etc.

What Database Marketing is Not

Unseasoned marketers might assume database marketing simply involves compiling a list of contacts and sending unsolicited promotional offers to them. This is simply not the case.

Importance of Database Marketing

When done right, there are many benefits of database marketing. Here are a few:

  • Helps customer segmentation by separating existing customers from new leads.
  • Prioritizes your most valuable accounts.
  • Gives you the ability to predict customer behavior.
  • Allow you to test new ideas and products. For example, Facebook first rolls out new features to a few countries (or advertisers) before launching it to everyone.
  • Can be used to gather feedback and better understand your customers’ needs.
  • Your brand stays relevant and top of mind.
  • Increased customer retention by building relationships.
  • Establishes thought leadership credibility and builds brand affinity.
  • Can be used for future promotional campaigns.

Remember, the primary goal of database marketing is to use data to create relevant messages and meaningful experiences with your audience.

Then, measuring the success of your campaign afterward.

After a marketing campaign is launched to a targeted audience, what was the result? How many customers were acquired? How engaged were your contacts? Did they visit your website? How long did they spend? How many pages did they visit? Did they talk with live chat? Did they download a white paper?

If there was little to no engagement, you might want to go back to ensure you had the correct contact information in your database. If this was the case, a data validation solution may be the answer.

With database marketing companies like Eloqua, HubSpot or Marketo, you can track how well your campaigns are performing. You can check engagement metrics, such as when people from specific companies open your emails or visit your website. Then you can tag or “score” those accounts in order of importance.

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Real-Life Database Marketing Examples

 

mark zuckerberg facebook


Currently, Facebook founder Mark Zuckerberg is worth $58.4 billion dollars.

Facebook has data on over 2 billion people (and counting). Their data is segmented according to first name, last name, email, phone number, date of birth, gender, location, interest, place of work, etc.

Their goal was to create a great platform where their users can connect with friends, family, and the world. In exchange, they share users data to their 5 million+ advertisers. The rest like they say is history. Facebook is a perfect example of database marketing done right, so to speak, on a large scale.

Another example is LinkedIn. They have a database of over 500 million business professionals with monetization strategies such as LinkedIn Premium, Sales Navigator, Talent Solutions, and most notably LinkedIn Ads.

In fact, all social media networks are huge marketing database platforms. This shows you how big this topic really is.

SaaS companies, for example, use free trials as part of their database marketing strategy. They offer prospects free access to their software for a limited time in exchange for their contact information.

hotjar


By doing this, they are building a database of potential customers for future marketing opportunities.

With this information, they can create email marketing campaigns to nurture these contacts. This can include video tutorials, how-tos, and webinars — all while tracking their prospects’ email engagement.

A member of the company’s sales team can then follow up with a phone call.

Additionally, their marketing team can create online ad campaigns to serve ads to those contacts. This is a growing digital marketing trend called data onboarding. Essentially, their marketing team can take their users’ information and onboard it on Facebook for retargeting campaigns.

But the question is: How can businesses create a profitable database like Facebook or LinkedIn on a small scale to achieve business goals?

Here are a few ways to build a marketing database:

  • Develop thought leadership articles around industry topics and offer gated content (i.e. content that can only be accessed by providing your contact information).
  • Offer free trials to access full features of your products, then promote it with ads.
  • Create a free tool that will be useful to your target audience. This is how Google, Facebook, and other social networks became the behemoth they are today. The only difference is that their target audience is the entire world!
  • Collect customer information during checkout (applies mostly to offline retail and eCommerce businesses).
  • Acquire a business contact database of your idea prospects from a data provider.
  • Collect website visitor data via online cookies.
  • Create a Facebook Chatbot on your business page to build Messenger subscriber lists (FYI, each person that messages your business page instantly becomes a subscriber). Then, you can run a click to messenger ads Facebook ad campaign to grow subscribers at a faster pace.

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A Case for Acquiring a Database of Prospects.

Acquiring an already existing database of prospects is a good idea.

Here’s why: Not every company has the resources to build a database of potential prospects from scratch. Also, not every company needs to.

For example, let’s assume you have been awarded a contract to find manufacturers of raw honey in the United States. Surely, it is possible to build thought leadership pieces around the subject of honey and generate inbound leads. But wouldn’t it be nice to just have a list of honey manufacturers in the entire United States at your fingertips?

As you can see, this becomes extremely valuable for a business. However, the ability to turn those contacts into revenue is where the true value lies.

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Pros and Cons of Database Marketing

We have shared the positive side of an effective marketing database; but, here are some challenges you may encounter along the way:

Cost of management: Maintaining a database can become expensive when a business lacks the ability to extract value from it. For example, check out MailChimp pricing calculator. The more subscribers you get, the higher your monthly bill. So, collecting too much data without an implementation strategy may end up costing more money than it brings in.

Outdated, missing or incorrect data: This is a serious challenge for B2B businesses. Employees change job titles, positions or companies all the time. This means your data needs to be cleaned and updated with current information on a regular basis. This requires the expertise (and investment) in data hygiene companies to get the job done.

Negative brand impact: In an attempt to raise brand awareness, marketing to the wrong contacts can lead to the opposite result. A “one size fits all” strategy never works and can make people associate your brand with spammers. Personalization and customer segmentation is the correct go-to strategy. Your communication will be focused on the exact needs of the customer.

Related: Challenges of Database Marketing and Actionable Solutions

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Final Thoughts

With thousands of advertisers fighting for customers’ attention every day, the need for a database marketing strategy is critical. The businesses that place their customer’s needs, experiences and preferences will always come out on top!

Contact us to learn how Stirista’s award-winning services can help fuel your company’s database marketing strategy.

About the author

Stirista began as an ambitious project from an apartment in San Francisco. But as office space expanded, so did our client base. After a few short years, we have worked with the largest healthcare insurance provider in the world, the biggest telecommunication company in the US, and some of the most prestigious universities in the country. We are on the preferred vendor list for a handful of Fortune 500 companies, with three of the ten largest companies in the world turning to us for...


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