In the digital world, data is king. Big data, data storage and data analysis: these are all at the forefront of every company’s mind. The reason is that, naturally, utilizing this information can help them stay competitive and successful. And for the marketers who are instrumental in selling products and services to customers, the importance of data is no better exemplified than in database marketing, which has become a primary strategy for brands to appeal to customers.

Database marketing is a form of direct marketing that involves collecting customer data from past interactions — these data points can be as simple as a name or email, and can even extend to addresses, transaction histories, customer support tickets, and so on. This information is used to create personalized experiences that either strengthen a customer’s relationship with a brand or attract new customers. Database marketing goes further than direct marketing by helping brands determine how a consumer would prefer to be marketed to, rather than simply sending out flyers or emails without consideration. The insights gained from customer data allow brands to fulfill needs through the best channels possible.

As it stands, personalizing a brand experience for every single customer isn’t quite within our grasp, but database marketing assists greatly in market segmentation. Data analysis reveals a brand’s various consumer groups, from the most loyal and high-value customers to occasional and first-time buyers. Or it could reveal demographic groups through similar purchasing behaviors or even by personal interests. This is all valuable information for determining the best channels for marketing delivery. 

As an extremely straightforward example, say a customer of a clothing brand seems to have bought a lot of sweaters, and their data reveals that they live in an area with a colder climate. The brand will then know to market them more sweaters or heavier clothing to keep them warm. The insights and strategies of database marketing can get far more in-depth and complex than that, but even a simple revelation like that can improve marketing efficiency, saving companies time and money. In addition, the metrics of database marketing are relatively easy to track, meaning that 

One of the main challenges present in database marketing strategies is data decay. Out of date, misinterpreted, or incorrect information can lead to a cascade of missteps in how a brand is selling to customers. Even a well-managed database can decay at a rate of 2-3 percent each month, meaning that in just over a year, it’s possible that approximately one-third of a company’s customer data could no longer be relevant. Ensuring data accuracy is a tricky problem, as it is mostly in the hands of the customers themselves to update or correct their information, but through a personalized, improved experience that customers enjoy, brands provide incentives for customers to keep their information as accurate as possible.

Of course, truly successful brands are ones that remember what this data is for: for all the benefits it brings a company in boosting sales or increasing conversion rates, it is all in the service of the customer. Providing them with the best products, services, and experiences possible to improve their lives in a tangible and meaningful way. And importantly, brands should not take advantage of the sensitive information that has been given to them. All the recent incidents with data breaches or the immoral handling of information means that companies are under scrutiny: if a brand cannot show that they are handling data responsibly and securely, customers will take their business elsewhere.

These are just the basics of database marketing, but as with any field, understanding the fundamentals is key to developing a deeper understanding and coming up with more complex strategies. And, it helps to remember that in order to truly harness the power of database marketing, marketers must first understand what it is that makes their brand special, or else all the customer information and personalization in the world won’t appeal.