Customer Drive Marketing

The usage of an electronic repository of detailed customer information to drive marketing efforts is sometimes referred to as database marketing. Firms that use database marketing spend time and effort in gathering, organizing and analyzing customer data on a continuous basis. This information is stored in the form of an electronic database, which makes it easy to retrieve, manipulate and draw conclusions. The power of database marketing lies in its ability to target individual or groups of customers with messages specifically tailored to their needs. For example, a bank might target communication about a new mortgage product to young couples in their thirties, but direct a similar message about college education loans to older couples with children. Database marketing campaigns fall back on a variety of media, depending on factors such as budget, reach, customer preference, appropriateness etc. Thus, a firm could employ a mailing campaign, or use a direct contact approach such as the telephone. While both result in direct customer contact by marketers, the latter is notable for the attention paid to the analysis of customer data. Database marketers are likely to rely on data warehousing techniques to manage huge volumes of customer data and employ analytics and statistical methods to derive maximum insight from raw numbers. Further, they might build models that help refine customer segmentation and even predict behavior. This arms them with a better understanding of what value proposition they should make to each of their customer segments, and improves the chances of marketing success. While database marketing offers many advantages including a high return on investment if used the right way, it does face some resistance from the target audience. Issues regarding privacy of information and solicitation of business have come under regulatory action, and database marketers must be careful not to violate any laws while launching their campaigns.