Database Marketing Key Issues

Database marketing is a specific marketing approach that uses a single-source database to drive key marketing communication activities. As a result, marketers can capture data to analyze results and make better future marketing decisions.

Obviously, the key to successful database marketing is making sure the data is complete and accurate. But to achieve that goal, there are several key issues to consider. We have addressed several below:

Planning the Database

Define Your Audiences

The approach to defining your target audiences will be different for B2C and B2B marketers.

For B2C marketers, the target audience is generally also the decision maker. When building a database for this one-to-one marketing approach, it will be important to consider relevant factors, such as demographic information or buying behaviors. It will be important to build data fields that can capture any salient data elements for the target audience.

For B2B marketers, the database needs are more complex. Here, it will be important to capture both organization-level information as well as individuals within the organization that affect the marketing of your product or service. It is very common to have multiple individuals, with different roles, involved in the buying process. For each role, you may find it necessary to capture different types of data.

Define the Objectives

Before you begin building your marketing database, it is important to clarify how the database will be used; to determine what types of information you will want to glean from the data. For example, will the marketing database be used for lead generation; for cross selling to current customers; or to conduct market research? The structure of your database will be contingent on your vision of the data base’s utility. Some of the most common data elements to capture include industry or vertical segments; sales or buying cycles; geographic codes or list sources. It will be important to code all records accordingly for later analysis.

Sources of Data

There are essentially three sources of data that you can use to populate your marketing database: internal, external or organic. Let’s look at each in turn:

Internal data

This refers to data that your organization already has in some form. This may be found in various operating or accounting systems to identify current or past customers, prospects who have inquired or received a proposal, etc. The common challenge of internal data is retrieving it from these various sources, and then making sure the data is current and accurate.

External Data

This generally refers to outside lists that can be rented or found in various directories. With reputable list brokers and vendors, we find that most “consumer” lists are very accurate, primarily because there are a number of market-place mechanisms that track changes by individuals. However, “business” lists are more challenging. Identifying the business entity is very straight forward and generally accurate, but the accuracy of identifying the individuals within companies decreases. There are very few mechanisms in the market that accurately track movement of individuals between organizations.

It is important to review and question the list rental data card that is provided for each list to determine the quality and accuracy of the lists. A general rule of thumb is that “compiled” lists are less accurate than those derived from “response” data. In other words, a list built based on someone ordering a product or requesting information recently is more accurate that a list built from compiled directories. Also take a look at how often the list firm states that the data is telephonically updated. The more recent or frequent the better.

Organic Data

Organic data is data collected one at a time. This often occurs either through direct response mechanisms where individuals respond to an offer, or from a sales distribution source that manually adds prospect data based on their activities. Organic data can be highly valuable provided the inputted information is complete and accurate.

Storage of Data

Another key decision in building a database marketing program is deciding how and where the data should be stored. Over time, as your company’s database becomes richer with data, you will come to appreciate its value to your organization. And just like any other valuable asset, you will want to protect it.

Common Access with Security Levels

One tactic to avoid duplication of data is to provide open access to the database for all users. This will allow anyone who has interaction with a prospective or current customer to see any other activities that have taken place. However, giving everyone access to the data also increases the risks that individuals can harm the data (either intentionally or accidentally). Therefore, it is important to use a contact management system that allows for different levels of security for individuals within an organization.

Regular Backup with Offsite Storage

Within the world of Information Systems professionals, there are some basic and accepted protocols for data security. This includes regular back up of the data and remote and redundant storage of the data. If you select a web-based contact management system, most of these organizations already have this procedure built in as a product feature. But if your contact management system is “home built” or housed on your company’s servers, then make sure your company has procedures in place for the regular back up of the data and offsite storage.

By taking a proactive approach to planning the development of a marketing database, marketing organizations can avoid issues in the future and benefit from robust and accurate data.

For more information on marketing databases or targeted marketing communications that generate measurable results, contact DMC Advertising at (262) 523-2000.