The concepts of database marketing have been active in the business scene for decades. However, the discipline is now taking off in popularity as companies discover the power of data.
Direct marketing refers to the practice of using a database to find leads for the marketing team. Once they have them, they’ll craft personalized communications in the hopes of warming them up until they become qualified leads.
The leads that progress furthest in the funnel will end up in the sales pipeline, ready for closing. Database marketing is a generic term, and many more specific types of it are developing as companies take note of successful campaigns.
Discover the Types of Database Marketing
Business Databases – Businesses have always kept records of their prospects and customers. That’s a lot easier now in the age of cloud-based CRMs. With a robust system in place, the sales team can tap into any public database to search for contacts, accounts, and leads.
Leads from business database work well with CRMs, and many companies import them to find customers.
Accounts represent information about companies. That includes the profile of the business itself and the Contacts that work for the organization.
Leads work for companies, but those businesses are not yet Accounts because they have yet to purchase. Leads can come from any source, including in-store, tradeshow, or website form fill.
Consumer information is not as in-depth as what’s in a business database. Third-party companies will provide essential information, such as addresses and phone numbers. Businesses also maintain information on customers they deal with and prospects from their websites and CRM.
Consumers have many protections, so marketers need to adhere to them when building a consumer database. They’ll have to pay attention to all pertinent rules, to ensure privacy.
Consider the Pros and Cons of Database Marketing
High Costs Are the Primary Disadvantage
The costs of database marketing might give some people a cause for concern. Purchasing CRM services and marketing automation require decent investments. Many smaller companies aren’t willing to commit to the outlay of capital. Even renting or purchasing leads will get expensive over time.
It’s worth considering the value of a database, and not just the cost. Businesses with high customer lifetime values can pay more for access to a lead or database. If the margins are tighter, it’s challenging. That’s why companies with high lifetime values are willing to pay so much per click or lead. They will make it up over the lifetime of the account, plus they will recoup costs in the event of an acquisition.
Increased Sales Is the Significant Advantage
The benefits are that the discipline is so effective. Even with CRM and marketing automation costs, databases are the way to keep fresh targeted leads coming in at all times.
Database marketing is one of those things that “everyone’s doing,” primarily because it works. As long as a positive ROI is possible, organizations will continue to expand database marketing efforts. The returns are high, and the more data they compile, the more effective their marketing becomes.
What’s the Importance of Database Marketing?
Database marketing has been rising in popularity for a few good reasons. First, companies have access to more information than ever before about all consumers. There’s so much data available; it makes sense for businesses to decide how it helps them sell more.
Secondly, the productive data environment makes conversion rates rise. With enough data mining and analytics info, businesses are reducing their marketing costs and getting more sales.
What Database Marketing Strategies Are Available?
There are a few distinct marketing strategies people use. Consider some of the ways anyone can get more out of a database.
Let’s say the sales team imports a new list of decision-makers.
- Enhance – step one would be the enhancement of the data. The salesperson can look for additional information like social connections to bulk up the record.
- Clean – This step involves verifying the public records and emails and phone numbers.
- Qualify – This stage goes a step further, and the sales team reaches out to establish interest. They might try to schedule an appointment
- Engage – Engagement will involve the sales team speaking with the prospect to discover a mutual interest.
Leads start as cold but warm up as they get used to a company. Inbound marketing and website design also play crucial roles in this area.
One thing for sure, it’s a process to take cold prospects and warm them up. Depending on the sales cycle and the current process, it might require multiple touches. All of those costs and extra time should go into any additional calculation of costs and potential rewards.
What’s the Right Way to Build a Marketing Database?
The primary ways to build marketing databases is through inbound lead generation and purchasing data.
Companies like Dun and Bradstreet sells leads to companies who are expanding their outbound sales efforts. Direct purchasing means the prospects are all “cold.” The sales team will do their level best to warm everyone up through a series of emails and phone calls.
Businesses that don’t want to purchase leads directly will need to cultivate them. That happens by advertising online, website landing pages, and inbound lead generation. Getting prospects to fill out forms and to request information is a way to populate a database.
The decision to choose one of the other ways of marketing will depend on objectives and budget. Most businesses do both. They capture leads from online and offline sources, and they augment their sales and marketing activities with purchased leads and database access.
Leads must be checked for accuracy and contacted frequently. Databases become inaccurate rapidly, and records change all the time. Keeping the sales team in frequent contact with leads and accounts means they’ll be on top of changes quickly.
Learn About Emerging Trends
Touchpoints Go Across All Channels
Marketers are now tracking integrated data using an omnichannel approach. Databases receive updates from Chat, social media channels, email communications, and phone calls via the CRM or website. Integration has become much more accessible, so more enterprises are now in-sync across the broad spectrum of channels.
That’s useful because it improves communications and closes the loop for customer services. Vastly better user experience is the result of the integration of once-separate channels. Now a support rep knows the precise thing that a salesperson said in a chat, instead of missing that critical piece of information.
That type of multi-channel support means customer service is now an additional sales channel.
Segmentation Now Includes Profitability
Marketers now know the profitability of their marketing segmentation. That makes segmenting prospect lists a higher-paying game. As the data piles up, they’ll have even more points to analyze to increase the profit even more.
Statistics Show Database Marketing Is the Norm
Marketing professionals love their data. A report from 2018 from Ascend Research shows the dramatic impact.
- 51% say they now base more of their decisions using data analysis.
- 45% claim that they use database marketing to acquire customers.
- 43% are integrating data across more than one platform
- 37% have programs for the enrichment of data quality
More than half of all marketers now make data-driven decisions to guide their campaigns. The industry has caught on to the benefits of letting the data speak for itself. As databases become more comprehensive, older, and cleaner, marketing decisions will make themselves.
Once a marketer discovers that analyzing data will improve campaigns, they tend to stay on board. That’s another reason that the practice and industry show no signs of slowing down. Businesses always need new customers, and maintaining databases is proving to be an excellent method.
Data Usage Continues to Grow and Improve Marketing
Predicting the growth of data is not a tough one to guess. Information is more valuable oil, especially to marketing companies who are trying to unlock the wallets of customers. They need to know who they’re speaking to and what those people want. With a lot of external and internal data at their fingertips, conversations become more meaningful and profitable.
Crafting data-driven campaigns increases the efficiency of inbound and outbound marketing. Not only that, it increases conversion rates, which reduces the waste on digital marketing spending. Companies that aren’t maintaining databases of prospects are falling behind competitors.
Implementing a new plan is straightforward. It’s worth considering the benefits of CRM and marketing automation. These solutions provide numerous advantages for sales and marketing, primarily because they’re the optimal way to maintain a working database of prospects.
How to Grow Your Database
Consider all the ways to get information into your marketing database.
- Advertising and PR can bring in new contacts.
- Direct mails and emails pick up new interested leads.
- The inside sales and the outside sales forces come into contact with new prospects who they add.
- Customer service representatives speak with potential prospects every day.
Sales and phone calls result in contact information.
- Website visitors are a constant source of new chats, form fills, and conversations that result in database adds.
Successful ad and marketing campaigns can get the phone to ring and the website to host chats. All of the new people go into the database and will now receive regular marketing communications and timely follow-ups.
Start Now and Expand Your Database
Business Intelligence suites and AI are plowing through transactions now to mine data effortlessly. In the coming years, new approaches will reveal themselves that will make database marketing even more intuitive and successful. Companies that are not yet investing in the discipline will need to in the next few years, or they could miss the boat.
Some services offer leads for flat rates, so any business can begin to expand their database marketing efforts. It’s preferable to start small, to pay close attention to the details that create successful campaigns.
As the numbers prove themselves, it will be trivial to invest more and replicate the success with more massive efforts. Databases will turn up similarities between prospects, which will unleash sales. Beginners become experts with enough experience!
Thanks for reading "How To Use Database Marketing To Grow Your Business", by the Linchpin Team in Chicago, Raleigh, and Wake Forest.