Database marketing is an innovative form of direct advertising with databases of potential clients or potential consumers to generate targeted personalized communications to sell a product or service for future marketing purposes. The traditional method of direct communication is almost any non-intrusive medium, as in traditional direct marketing. For example, you could use direct mail, newspaper ads, fliers, or even personal letters. This sort of advertisement creates the impression that the seller or the advertiser is always around, and the customer never has to see the product. This type of advertisement generates less response, but it can be very effective.
Database marketing is a tool used in branding. Database marketing is often confused with brand name building, however they are very different. The reason why they are different is because database marketing does not create a brand image for products or services. A good brand image is based on an emotional response from customers. Database marketing helps a company to build a brand through the collection of personal data about customers. These data are then used to understand the psychology of buying decisions by developing special reports that provide insight into customer buying behaviors.
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The research is done primarily through massive internet databases that provide information on customers' preferences in clothes, automobiles, electronics, and many other consumer goods. The information is compiled into easy to read reports that tell the story of how customers make buying decisions. These data are used to help companies understand their target audience, and establish promotional offers that will appeal to this target audience. For instance, a car company might discover that males drive faster and spend more money than females. By understanding the reasons for these purchasing behaviors, a car company can come up with a better selling point for their vehicle. They could then create a more appropriate advertisement campaign.
One example of a company that uses customer database marketing techniques is LinkedIn. LinkedIn provides a unique opportunity to connect to members at a deep level. The company can use the data it has collected to understand what types of events to appeal to potential customers and schedule a meeting or video conversation to discuss their brand. Social media outlets like Facebook and Twitter have also been linked to the growth of LinkedIn. The data LinkedIn provides allows a company to create content and distribute it in a highly-visible fashion to potential customers via the social media channels.
Netflix is another company that has greatly benefited from database marketing strategies. Through its Netflix application, the company has been able to offer more options and personalized recommendations to customers. The personalized recommendations work by dividing customers into groups based on geography and other categories. Based on the profile information Netflix receives, they are able to provide recommendations tailored to each group. For example, a Spanish speaking group might be offered recommended movies by a Latino Netflix user based on their preferences and geographic location.
Database marketing provides a powerful opportunity for a brand to gain deeper insights into segments of consumers. This can help companies create a more interactive marketing plan. Through the data provided by the database, a company is better positioned to understand what segments of their audience are more interested in, which can lead to more effective strategies for advertising to these key audiences. The results generated through the use of segmentation can prove invaluable for a brand seeking new ways to reach a new set of target customers. Netflix is just one of the many examples of a company using data and social media to create a highly-engaged, engaging user experience.
