When the average person encounters as many as 10,000 brand messages every day, it can seem impossible for a small business to get heard. You stand a much better chance with a solid personalization strategy and the right automation tools to make it work. At the heart of it, is database marketing.
57% of consumers will share their personal data in return for a personalized offer, but the only way your company can make such an offer is by tapping into the power of data.
In this article, we’ll find out what database marketing is, how it drives personalization, and how you can use database marketing to get the most out of your personalized marketing strategy and automation tools.
What Is Database Marketing?
Database marketing is a form of direct marketing that involves collecting personal data, like names, emails, and purchasing histories, then analyzing the information to create a personalized experience for each individual.
Through database marketing — also known as personalized marketing — your company can improve its customer relationship management by developing a deeper understanding of each person’s needs and interests. Ultimately, this approach enables you to tailor your brand messaging to communicate with each prospect or customer on a one-to-one basis.
Sounds magical, right? Or maybe just impossible?
This level of personalized marketing is not a pipe dream, but it does require a lot of time, effort, and smart strategy. It’s not just about using the first names of your subscribers in your email newsletter.
That is merely the tip of the iceberg – database marketing goes a lot deeper than that. It is a far-reaching strategy that you can successfully employ across a multichannel marketing approach. From email to social media, blogs to paid ads, database marketing is a powerful tactic that puts one thing above else:
The customer experience.
With database marketing in play, there are great benefits for your customer, which is excellent news for them and your business.
So, how is it done?
How Database Marketing Relates to Personalization
A great personalized marketing strategy relies heavily on data. The more data you can collect on your website users, the higher the potential for personalization. As such, we can consider all personalized marketing to really be database marketing.
You can get started with database marketing through simple email sign-up requests, which allows you to learn the names of your followers quickly. Over time, as you build a relationship through email, you may be able to collect more data through a survey, such as:
- Devices used
If you sell your products and services online, you can learn much more about people based on their onsite behaviors. Over time, database marketing presents these valuable insights that will help you define accurate buyer personas for your target audience.
And that paves the way for intimate, personalized marketing, which comes with a host of benefits.
7 Benefits of Database Marketing for Your Personalization Strategy
So, just what are the advantages of a database marketing strategy? When your data-driven machine is running at full steam, your business will benefit in several ways:
1. Database Marketing Makes it Possible to Laser-Target Specific Audiences
If you can’t offer anything somewhat unique, original, or fresh, then you run the risk of being seen as another “me too” effort. And that’s if you’re seen at all. In a crowded sphere, there’s a real chance you won’t be. In short, go niche or go home.
With deep wells of customer data on hand, database marketing helps you build a very clear picture of who you are trying to serve. From their interests and buying habits to their favorite websites and TV shows, everything is ammunition to improve the level of personalization.
2. Database Marketing Helps You Create More Compelling Offers
If you want to stand out from the crowd, personalized marketing is the way to go. It allows you to leave an impression on people that they will remember. Better yet, they’ll tell other people about it.
When Coca-Cola launched its Share a Coke campaign in 2010, it quickly captured the imagination of the millennial demographic. Soon enough, the personalized bottles triggered a surge in sales, helping the company to their best profit margins in a decade.
3. Database Marketing Builds Stronger Customer Relationships
According to Adweek, 75% of global consumers want more from brands. They expect brands to contribute to their general well-being and their quality of life.
By crafting your content, language, and offers to each segment of your audience, you can engage people on a more personal level, which helps forge stronger relations. If you can adapt your website, landing pages, and product offers for each new visitor, you essentially offer a tailored user experience that makes people feel special.
4. Database Marketing and Personalization Humanize Your Business
Nobody wants to deal with a faceless corporation. People are less trusting of brands online nowadays, so personalization is growing in importance.
Through database marketing, you can leverage personalization to give your brand a face that people will trust. By communicating with people on a personal level, through friendly, conversational emails that offer a working reply address, you can instill trust, and show people that your company is not run by robots…yet.
5. Database Marketing Leads to Smarter Personalized Recommendations
Amazon is the undisputed king of using database marketing, with a whopping 35% of their revenue attributed to personalized product recommendations. The more time you spend on ecommerce sites, the more data the company can gather on you.
For example, database marketing collects information about:
- Pages you visit
- Categories you browsed
- Products you considered
- Past Purchases
Brands just need to be careful that they don’t go too far. Target got clever with figuring out when women were pregnant, and then accidentally exposed a teenager’s pregnancy before her father was aware!
6. Database Marketing Maximizes the Impact of Audience Segmentation
You can use database marketing to segment your audience into small, focused groups of customers who share similar personal interests, behaviors, or demographics. This approach ensures your marketing team will get a better ROI as each segment will only be served the most relevant content and offers.
7. Database Marketing Improves Customer Service
By giving your team a 360° view of all customer interactions with your brand, your customer support staff will have the knowledge they need to help each person, regardless of where they are in the buyer’s journey. This holistic view will facilitate more effective, efficient customer service, from both human staff and chatbots if you decide to use them.
3 Major Challenges of Database Marketing
As you can see, there are lots of great benefits of database marketing. However, there are also some challenges, which you should get familiar with if you want to get the most out of this form of marketing.
Here are three database marketing challenges to prepare for:
Data accuracy doesn’t last.
Data needs to be well-maintained. Otherwise, it’s less valuable from a marketing perspective. Whenever prospects change their job, address, or email address, their data profile becomes outdated.
It’s best to focus your database marketing on information that is less likely to change so often, such as a name or phone number.
Even personalized offers can come at a bad time.
While database marketing fuels greater personalization, you still need to connect with customers at the right time. Sometimes, people just aren’t in the right frame of mind to engage in a brand message or purchase a product. It takes time (and smart automation tools) to figure out how to time your personalized offers right.
Customer expectations are at an all-time high.
With smartphones, Google, and voice-enabled devices, today’s consumers are used to getting what they want, when they want it. People have short attention spans and less patience for irrelevant content and slow service.
So, you need to be confident your personalized marketing materials deal directly with the target customer’s needs. If you can’t meet their high expectations for hyper-personalized content, then you may lose the sale forever.
How to Start Database Marketing
So, now that you know the pros and cons of database marketing, let’s show you how to build a marketing database.
Here are three effective strategies for building a database:
1. Create thought leadership, gated content to elicit sign-ups.
Great content is the beginning, but you can’t give it all away for free. Instead, you want to create a lot of gated content, which users can access by providing their personal information. As you establish your authority in a niche, more people will be willing to exchange their details to gain access to your premium-level content, such as video courses, whitepapers, and ebooks.
2. Offer free trials to collect data.
If you’re pitching high-ticket products and services, most people will take some time to go through the customer journey. Your prospects need time to make a decision. You can help sway them by offering free trials where they can use your services for a limited time. As people sign up for the trial, you can add their details to your database.
3. Leverage information during checkout.
Any offline retail and or eCommerce business can collect customer data at the point-of-sale. Don’t miss out on this low-hanging fruit, as you can implement database marketing to reconnect with these customers, making offers related to their previous purchases.
How Automation Impacts Database Marketing
Many people fear the rise of AI and machine learning, believing it spells the end of many jobs and a certain death knell for the human touch with customers. Surely, eliminating humans will have a negative impact on your level of personalized marketing?
The truth is that database marketing relies on humans because data is only valuable when people decipher insights. Similarly, automation tools need a human hand to keep them on track. People may fear job losses are on the horizon, but the reality is there are worker shortages in the age of marketing automation.
Of course, some roles may be better suited to a machine. That being said, the rise of marketing automation will create new job opportunities. Ultimately, as we introduce more robots, we’ll need more employees to provide better collaboration between humans and machines.
3 Big Reasons to Combine Automation and Database Marketing
By pairing your database marketing strategy with automation tools, you can improve personalization. Here are three reasons why you should combine automation with database marketing:
1. Automation Tools Guarantee a Better ROI
Marketing automation is deeply rooted in data. With such a focus on consumer behaviors, you will find it increasingly easy to deliver on their needs.
Email marketing has been proven to deliver an astonishing ROI of almost $40 for every $1 of marketing spend. This demonstrates how powerful automation is. When paired with personalization, you will engage more people and get more leads, conversions, and sales.
Ultimately, that saves you money wasted on guesswork. Instead, you invest where you know it will pay off.
2. It Creates the Best Online Shopping Experience
Forbes found that 75% of companies currently using machine learning report a 10% boost in customer satisfaction. While some businesses may think automation could deter customers, it actually attracts them.
People expect personalization. They want brands to know more about them. The only way to get to know them is through the use of marketing automation and data analytics.
Machine learning helps you learn more about each customer. Then you can tailor your content and offer personalized product recommendations. This improves each individual customer’s online shopping experience.
3. Database Marketing Improves Over Time with Machine Learning
That’s right. Think about it – the machines never stop learning. They continue collecting consumer data, analyzing every action, and all traffic channels. This will allow you to target smaller, more specific segments of your audience with greater accuracy.
Eventually, genuine 1:1 personalization will be possible. With marketing automation, you can maximize your database marketing to forge strong relationships with every customer. Better yet, it will get stronger over time.
Database Marketing is the Future of Personalization
The buyer’s journey is crucial. With database marketing, your business can build detailed profiles of all your customers and prospects, based on their demographics, browsing behaviors, and purchasing habits. Then, you can leverage these valuable data insights to segment your audience. When you do that, it’s easier to offer compelling, relevant content and offers that speak directly to the needs and interests of each consumer.
Database marketing is the bedrock of modern business, and automation allows us to get more from it. While personalization and automation may seem like conflicting ideologies, they can work in harmony. When you bring them together, they enhance the customer experience throughout the buyer’s journey.
As we roll on into the digital age, companies shouldn’t fear the loss of the human touch. It will remain, and in fact, become stronger. Database marketing allows us to learn about consumers, while automation tools turn this knowledge into power.
With these two key marketing strategies together, marketers can respond to consumer interests with greater speed and accuracy. Ultimately, that will enhance the user experience and boost your bottom line.
Awesome resources to learn more about database marketing and automation: