Posted in Marketing and Strategy Terms, Total Reads: 1520
Definition: Database Marketing
Database marketing involves the use of statistical tools to customer databases to identify customers who can be targeted through different means of communication for targeting purposes. This form evolved from direct marketing, where a large number of people where personally contacted for the purpose of promoting a product or service.
Companies carry out extensive analysis on consumer databases to understand their behavior and try to provide specialized offerings to consumers. Softwares are used to build customer profiles based on demographic, geographical and personal characteristics and use this information to target marketing activities with improved accuracy.
One of the important benefits of database marketing include higher profitability of the campaign – because this helps companies to target their campaigns better and hence results in increased sales. Also, database marketing helps to improve communication with customers. Sustained communication with customers will also help to obtain information from customers about product improvements and help towards new product development as well.
Some of the companies which have used database marketing successfully include:
Avis Car rental: for identifying customers for their summer car rentals
United Artists : scans loyalty cards to record customer’s movie going habits.