Five ways to improve database marketing in 2018

Database Welcome 2018! A New Year with fresh ambitions and new objectives, to make your business perform better and be more profitable.

As many marketers pick apart the data they collected in 2017, they inevitably look to see how they can build lucrative relationships with new contacts.

So, how can brands improve database marketing in 2018?

Woah, wait a minute! What even is database marketing?

Database marketing is a form of direct marketing that uses customer and prospect data to build lists of people you wish to target with a marketing campaign or communication. For example, an email, mailshot or telemarketing to promote products or services.

This database is generally created from multiple business data streams. This can include inbound enquiries, web registrations, sales data and survey responses. Often, bought-in lists from third-party data vendors, too.

A B2C customer database compiles customer and prospect names, addresses, date of birth, gender, contact details and buying history. For a B2B customer database, it may also include company details, industry type, job role and so on.

Unlike direct marketing, database marketing is set apart through the manipulation of customer data. This means using analysis and modeling tools to segment the customer database into targeted lists based on their demographics, geodemographics and behavior. It helps to target your messages, so they go to the most relevant and profitable customers and prospects.

Assuming that you have a customer database that is accessible to marketers, and can be analyzed by them, what can make this strategy more effective? Here are six suggestions to explore to improve database marketing success…

‘Train of thought’ analysis

Using database marketing to target the most appropriate customers means marketers need to be able to pick apart and track data. For example, to analyze your best customers to find out what they have in common. Or, to learn which campaigns have been most successful, and where your most promising leads are coming from.

Yet, for many brands, asking questions of their database actually means passing the analysis to a third-party Marketing Services Provider. This often means requests can take days to process.

Using so-called ‘train of thought’ analysis tools let marketers take closer control of their data. They can query the database with a series of insight-seeking questions, to create selections, define data groupings and more to rapidly build targeted segments. This enables marketers to create campaigns quicker, and react much faster to events and market conditions.

Invest in a Single Customer View

With your customer database drawing from information stored across many organizational systems (often referred to as ‘data siloes’), this means customer records will be fragmented, duplicated and outdated. Or all three. Using such data for database marketing can skew what you think you know about your customers – even how many customers you think you have.

A Single Customer View (SCV) is the process of cleaning, matching, merging and deduplicating all the customer data from your data siloes into a single ‘golden record’. It can also fill the gaps in your own knowledge with external data from other sources.

This creates an enhanced, informed and trustworthy view of each customer, providing the perfect foundation for accurate segmentation and personalization.

Use predictive modeling

It’s common practice for marketers to want to segment the customers in their database by age, gender, location, purchase history and so on. However, using predictive modeling groups customers by looking at insight-derived needs and analysis of customer responses.

Behavioral clustering and product-based clustering, for example, use behavioral data (like buying history), or buying trends (if they bought X then they may need Y), to segment a database based on the real actions they exhibit, rather than a marketer's assumptions. This means the creation of more targeted and relevant communications, putting faith in statistics rather than gut feeling (although there is a place for both, of course).

Keep your data clean

For those who have yet to invest in a Single Customer View, keeping a regularly refreshed database is essential for accurate, effective marketing campaigns.

This means removing duplicate data (receiving the same message multiple times is irritating for customers and costly for businesses) and updating data that is inaccurate. This second point is definitely one that cannot be ignored, particularly when up to 6.5% of consumer data naturally ‘decays’ every month.

One useful New Year’s Resolution would be to ensure you mitigate one of the biggest causes of inaccurate data: human error. For example, this could be optimizing how customers complete forms (drop down fields rather than text entry fields, for example). Or, establishing format conventions with staff (such as DOB format and removing address/company abbreviations) and making employees accountable for the data they enter.

Factor in new data protection laws

Those in Europe are well aware of the General Data Protection Regulation (which comes into force May 25 this year), and how it affects database marketing. However, the impact of GDPR will reach around the world (particularly if you handle the personal data of UK and/or EU citizens).

To cut a very long and complicated piece of legislation short, GDPR will change how collect, store and use customer data. This includes how you get consent for marketing and that you renew permissions with existing contacts.

This will likely mean brands lose a large number of contacts that they are no longer legally able to market to. For 2018, getting ahead of the game with a GDPR compliant database will not only see you with a more focused and relevant (if streamlined) marketing database, but also the confidence that you’ve reduced some of the risk associated of receiving a huge GDPR fine!