The face of Database marketing is still continuing to evolve despite being around for nearly three decades. Many marketers are yet to implement Database Marketing, wait a minute, what is Database Marketing?
Database marketing is the practice of classifying, collecting and then scrutinizing customer data to deliver tailored, relevant and effective marketing messages to customers. The database is compiled using data acquired from a range of internal sources including CRM, email correspondence, data warehouses, and, external sources like social media and discussion forums. The primary aim of database marketing is to use this information to implement marketing strategies that ultimately upsurges profits.
Here are six suggestions to drive your company’s marketing ROI and for long-term success in the millennial marketplace.
Step 1 – Start by segmenting list
Breaking up your contact lists into smaller segments is the first step in Database Marketing. These segments can be cut and combined in a number of different ways using a combination of value, life cycle, demographics, psychographics, industry, company size etc. to develop more personalized messaging strategies.
The basic level of segmentation involves sorting or arranging customers and prospects by key attributes like type, size or potential, sales revenue, employees, product purchases, purchase interest, etc. A higher level of segmentation involves profiling or scoring customers and prospects based on their customer journey and key insights like buying timeframe, market influence, and likelihood of repeat purchase and expected profit margin.
Profiling and scoring help in prioritizing your accounts and in designing effective data strategies by identifying frequencies, for example, 80% of ABC Corp’s profits are derived from the top 20% of customers or let’s say Software vertical comprise 35% of ABC Corporation’s customer base. A well – segmented targeted database can drive 66% higher conversion rates.
Step 2 – Expand your Universe
Identifying and connecting with high potential prospects is the primary goal of most marketers. For this knowing your ideal customer profile (ICP) and total addressable market (TAM) is very critical. Analyze and do a quick TAM analysis to figure out your current market penetration. Based on your buyer personas – “heavy users” that fit your predetermined criteria, expand your total addressable market (TAM) by identifying companies analogous to your ideal customers.
SMARTe can simplify the process by helping you run a quick TAM analysis to identify your current market penetration and suggest companies that best fit your Ideal customer profile.
Step 3 – Grow existing market share
There has been a long-standing belief that there are two distinct types of salespeople: hunters and farmers. But what do you do in a mature market where there seems to be little to hunt and no new fertile ground? The key is finding pockets of profitable, micro growth opportunities within your existing accounts. It’s easier, faster and less expensive to sell more to existing customer than acquiring new ones.
Do you feel there’s more scope to infiltrate your existing customer accounts? Are there more purchasing decision makers you want to reach?
Expand your existing accounts by targeting audience who have already shown interest in your service offerings or who have their colleagues who already are your clients. Your company’s client servicing, operations, and account managers play an important role in making this happen.
Step 4 – Customer Retention
Bringing in new customers is hard, but losing them is easy and costly. That’s why customer retention is critical. Increasing customer retention by 5% increases profits 25-95%.
To shift the focus from acquisition to retention, Consider updating CRM, , Become your customers’ trusted advisor and keep your customer happy, Send frequent communications, Interact on social media, Turn complaints into opportunities, Run loyalty programs etc.
Customer retention will give you visibility, trustworthiness and competitive edge to stand out in your industry and hold onto your hard-earned gains.
Step 5 – Optimal Channel and touch points
Several direct marketers were able to improve the effectiveness of their programs by implementing optimal contact management strategies and incorporating the impact of reconnecting into their audience selection strategy.
Communicate with your audience on all the channels they leverage, including web, mobile, and email. Dr. Jeffrey Lant’s “Rule of Seven” states that you must contact your buyers a minimum of seven times in an 18-month period for them to remember you.
Knowing that you need a minimum of seven touches, calculate upwards from there based on how much information you need to convey. If you can address your target account’s specific business challenges and give them the information they need to make a buying decision, your company earns their trust and gains credibility.
Step 6 – Measuring Results and Iterate
Database Marketing allows you to manage members, events, and contacts while at the same time keeping in touch with customer feedback and behavior. So how do you know if it’s working?
The great thing about Database Marketing is that everything is measurable, from open rates and click-through to sales. But from the outset, be clear about what you want to measure. Your goals might include increasing sales, generating leads, encourage referrals or getting a booking for an event.
Once you’ve identified your goals you want to measure, identify the performance indicators you’ll use to gauge progress towards those goals. This could be in the form of the volume of leads generated, conversion rates, average sale value, and the number of new purchases, revenue, and net profit.
Finally, the most important thing to remember is to put your findings to work – refine and develop future Database marketing campaigns based on your results. Each campaign you run gives you better and more accurate statistics about you. Record all feedback, track, and yardstick your success from the very beginning to improve your strategy.