Debunking 5 Myths about Database Marketing

In last week’s post, I talked about how A/B testing helps you optimize conversions, and how SQL can help you with database marketing. This week, I decided to delve a little deeper and talk about how database marketing has helped unveil the mystery of customer behavior to better target leads for business.

Database marketing has been tossed around a bit, and honestly, I was a bit confused when I went looking for a definition. Here is the best I found:

Database marketing is a process of identifying, collecting, and analyzing significant information from all sources, internal and external, about your customers, leads and prospects to drive strategic marketing and sales decisions.” –Market Data Retrieval

It’s a pretty broad concept. So it makes sense that a lot of people seem to think database is out of their reach, because of all the work that seems to be involved with it. I am hoping to debunk some of those woes with this list I compiled of the biggest myths I had heard about database marketing, and how it can be one of the best benefits to your marketing strategy.

1.  I can’t do database marketing, it’s too expensive!

InTheMoney

Database marketing shouldn’t be seen as an added expense, but rather an investment. You know that expression, “nothing is ever free?” It applies here too. You can’t give nothing and get something in return. My tip? Look at your marketing strategy and see what will give you the best ROI. When you crunch the numbers, I think you will see database marketing is something that would be of benefit to you.

2. Database Marketing Takes Too Much Time

This one never made too much sense to me. Database marketing isn’t a gimmick or fad; it’s a proven marketing strategy that will help you make the best decisions for your business to reach customers. In order to have an effective marketing campaign, you need to take the time to coordinate the best strategy possible. Having live data to derive your knowledge of your market from is the basis you can have to crafting your marketing strategy. One of the best examples I have seen of database marketing is during the presidential election of 2012. In Obama’s reelection campaign, many said it would go down in history because he changed the course of how politicians can appeal to their audience. No longer were they talking to everyone with one broad message; instead they took a page out of the Marketing 101 textbook and started doing database marketing. I remember my mom and me getting an email from Michelle Obama, while my dad got some from President Obama, and rarely the First Lady. In this display of database marketing, the Obama campaign was finding the best point to persuade each of their supporters to help raise money for his campaign budget.

3. Database marketing can only be used for Email

Email

I think people misunderstand that database marketing can be used for more than just ‘personalization’, though that most definitely is the one of the most recognized benefits of it. Database marketing isn’t focused on just segmentation for putting your customer’s name on an email template; it’s live data that can be used to make effective marketing decisions across your entire campaign. A great example of this is once again the Obama Administration. They used their data to see where to place ads. Instead of traditional local TV programming, the campaign bought ads during popular show times such as Sons of Anarchy, The Walking Dead and Don’t Trust the B—- in Apt. 23, according to this Times article. That same article goes on to say that they were able to buy 14% more efficiently. Another use for database marketing is for predictive modeling; heck, Hollywood is doing it. We may not have to deal with movie flops ever again thanks to database modeling!

fingerscrossed

4. You can make multiple campaigns from one instance of data

Database marketing, like other marketing strategies, isn’t just a one-time deal. This white paper from Srividya Sridharan talks about how, “personalization is a process, not an outcome,” meaning customer data isn’t static. You can’t just look at past purchasing data and personalize to customers based on that data alone. Personalization gets better when you refine it as new data comes in.  If anything, the opposite is the truth. You can make one solid campaign from several pieces of data. Orbitz for example, was able to identify one in for their campaign: Mac users tend to spend more on hotels than PC users. So when they sort  hotels for Mac users, they show them the pricier hotels first before anything else.

5. If I let my customers see I know everything about them, they’ll love me!

no-no-no

Yea..no. While you do want to gather as much relevant information as you can about your customers, using all that information for one database marketing campaign is irrational, and very creepy.  You want to be sure that your database marketing doesn’t freak out your customers. I read an article here about a man who created a program that allowed Target to send coupons to expectant mothers in their second trimester. As it turns out, a father wasn’t too pleased when his teen daughter received a baby coupon book, only to apologize later when he realized that she was indeed pregnant. Not only was that awkward, but pretty freaky as well. Just because you have all this information, doesn’t mean you have to use all of it on your customers. With great power, comes great responsibility. Think of it this way: would you like if you are just walking to work, when some random guy comes up to you and gives you coupons for babies because he’s been tracking your reproductive cycle? I didn’t think so.

So you see, database marketing isn’t this big scary tool that requires you to be a genius, you just need to know where it will serve you best in your company. Database marketing works when you are subtle about it, and work it into your overall marketing campaign, much like other strategies.

Have an example of database marketing that worked really well(or really bad) for you? How have you used databbase marketing to your advantage? Let me know!

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