Let’s forget the technical jargon and take a look at what database marketing really is and how you can use it, in plain, understandable English. Database marketing is a marketing and sales system that gathers, refines, and utilizes information so that you can make informed decisions regarding marketing and sales communications and programs.

Successful companies use database marketing for targeted prospect identification and developing a sales call strategy. You can also use it to design effective direct mail pieces and write appropriate advertising campaigns. The results of effective database marketing include acquiring new customers, retaining existing customers, generating more business from existing customers and creating long-term loyalty.

What does database marketing allow you to do?

Information about customers that is accurate and readily available can truly transform your company’s capability to market and sell. Unsuccessful companies practice “hit-or-miss” marketing. They make decisions based on gut instinct, not on fact. But database marketing lets you work more intelligently. It allows you to take the information you already have in your customer or prospect lists, analyze it to find the specific patterns and use the information from your analysis to run better marketing and sales programs.

The end result? If you target the right prospects with the right messages about the right products, you’ll spend less marketing to prospects that are never going to buy and more on the ones that are most likely to buy, thereby increasing the return on your marketing and sales investment.

You can begin the process of database marketing by keeping track of where your customers come from, exactly what they buy, how profitable they are and what referrals they send to you. Without exception, every company that has made the effort to analyze their customer list has discovered valuable information about their own clients that has helped make them more profitable.

Here are specific examples of effective database marketing:

--Identify your best customers’ common characteristics and then target your next program to those prospects with similar characteristics.

--Learn which market segments bring you the most revenue and which ones bring you the highest average revenue. These might be very different industries, in which case you would want to market differently to each one.

--Find out what types of prospects respond to which promotions so you can decide where to spend your advertising and marketing dollars the next time.

--Calculate the average lifetime value of your customers. You can use this information to find out which customers aren’t living up to their potential and devise marketing and sales programs to nudge them to buy more.

--Reward your most frequent buyers and the buyers that bring you the highest revenue.

Gloria Berthold is president of TargetGov at Marketing Outsource Associates, Inc. and an expert in business development in the corporate and government business arenas. Visit http://www.targetgov.com for more information.

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