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Database marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes. The method of communication can be any addressable medium, as in direct marketing. Wikibooks has more about this subject: Marketing Direct marketing is a discipline within marketing that involves contacting individual customers (business-to-business or consumer) directly and obtaining their responses and transactions for the purpose of developing and prolonging mutually profitable customer relationships. ...
A database is an information set with a regular structure. ...
Customers are waiting in front of a famous fashion shop for its grand opening in Hong Kong. ...
For the magazine, see Marketing (magazine). ...
Wikibooks has more about this subject: Marketing Direct marketing is a discipline within marketing that involves contacting individual customers (business-to-business or consumer) directly and obtaining their responses and transactions for the purpose of developing and prolonging mutually profitable customer relationships. ...
The distinction between direct and database marketing stems primarily from the attention paid to the analysis of data. Database marketing emphasizes the use of statistical techniques to develop models of customer behavior, which are then used to select customers for communications. As a consequence, database marketers also tend to be heavy users of data warehouses, because having a greater amount of data about customers increases the likelihood that a more accurate model can be built. A data warehouse is the main repository of an organizations historical data, its corporate memory. ...
The "database" is usually name, address, and transaction history details from internal sales or delivery systems, or a bought-in compiled "list" from another organization, which has captured that information from its customers. Typical sources of compiled lists are charity donation forms, application forms for any free product or contest, product warranty cards, subscription forms, and credit application forms.
The communications generated by database marketing may be described as junk mail or spam, if it is unwanted by the addressee. Direct and database marketing organizations, on the other hand, argue that a targeted letter or e-mail to a customer, who wants to be contacted about offerings that may interest the customer, benefits both the customer and the marketer. Categories: Stub | Direct marketing | Promotion and marketing communications | Marketing ...
This article is about electronic spam. ...
Some countries and some organizations insist that individuals are able to prevent entry to or delete their name and address details from database marketing lists.
Sources of data Although organizations of any size can employ database marketing, it is particularly well-suited to companies with large numbers of customers. This is because a large population provides greater opportunity to find segments of customers or prospects that can be communicated with in a customized manner. In smaller (and more homogeneous) databases, it will be difficult to justify on economic terms the investment required to differentiate messages. As a result, database marketing has flourished in sectors, such as financial services, telecommunications, and retail, all of which have the ability to generate significant amounts transaction data for millions of customers.
Database marketing applications can be divided logically between those marketing programs that reach existing customers and those that are aimed at prospective customers.
Consumer data In general, database marketers seek to have as much data available about customers and prospects as possible.
For marketing to existing customers, more sophisticated marketers often build elaborate databases of customer information. These may include a variety of data, including name and address, history of shopping and purchases, demographics, and the history of past communications to and from customers. For larger companies with millions of customers, such data warehouses can often be multiple terabytes in size. A data warehouse is the main repository of an organizations historical data, its corporate memory. ...
Marketing to prospects relies extensively on third-party sources of data. In most developed countries, there are a number of providers of such data. Such data is usually restricted to name, address, and telephone, along with demographics, some supplied by consumers, and others inferred by the data compiler. Companies may also acquire prospect data directly through the use of sweepstakes, contests, on-line registrations, and other lead generation activities.
Business data For many business-to-business marketers, the number of customers and prospects will be smaller than that of comparable business-to-consumer (B2C) companies and (B2B) companies. Also, their relationships with customers will often rely on intermediaries, such as salespeople, agents, and dealers, and the number of transactions per customer may be small. As a result, business-to-business marketers may not have as much data at their disposal. One other complication is that they may have many contacts for a single organization, and determining which contact to communicate with through direct marketing may be difficult. On the other hand the database of business-to-business marketers often include data on the business activity of the respective client that can be used to segment markets, e.g. special software packages for transport companies, for lawyers etc. Customers in Business-to-business environments often tend to be loyal since they need after-sales-service for their products and appreciate information on product upgrades and service offerings. External Links International Chamber of E-Commerce: e-commerce store/catalog, point-n-click website builder, e-business tools & services ...
Business-to-consumer (B2C), also Business-to-customer, describes activities of commercial organizations serving the end consumer with products and/or services. ...
Business-to-business (B2B) describes relations of commercial partners, without serving the end consumer. ...
Sources of customer data often come from the sales force employed by the company and from the service engineers. Increasingly, online interactions with customers are providing b-to-b marketers with a lower cost source of customer information.
For prospect data, businesses can purchase data from compilers of business data, as well as gather information from their direct sales efforts, on-line sites, and specialty publications.
Analytics and modeling Companies with large databases of customer information risk being "data rich and information poor." As a result, a considerable amount of attention is paid to the analysis of data. For instance, companies often segment their customers based on the analysis of differences in behavior, needs, or attitudes of their customers. A common method of behavioral segmentation is RFM, in which customers are placed into subsegments based on the recency, frequency, and monetary value of past purchases. Van den Poel (2003) gives an overview of the predictive performance of a large class of variables typically used in database-marketing modeling. RFM could also refer to Reduced Function Mode of Windows Vista RFM could also refer to Relative Formula Mass, also known as Molar mass RFM could also refer to Remote File Management in connection with OTA RFM is a method used for analyzing customer behavior and defining market segments. ...
They may also develop predictive models, which forecast the propensity of customers to behave in certain ways. For instance, marketers may build a model that rank orders customers on their likelihood to respond to a promotion. Commonly employed statistical techniques for such models include logistic regression and neural networks. Logistic regression is a statistical regression model for Bernoulli-distributed dependent variables. ...
A neural network is an interconnected group of neurons. ...
Laws and regulations As database marketing has grown, it has come under increased scrutiny from privacy advocates and government regulators. For instance, the European Commission has established a set of data protection rules that determine what uses can be made of customer data and how consumers can influence what data are retained. In the United States, there are a variety of state and federal laws, including the Fair Credit Reporting Act, or FCRA, (which regulates the gathering and use of credit data), the Health Insurance Portability and Accountability Act (HIPAA) (which regulates the gathering and use of consumer health data), and various programs that enable consumers to suppress their telephones numbers from telemarketing. Berlaymont, the Commissions seat The European Commission (formally the Commission of the European Communities) is the executive branch of the European Union. ...
The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress in 1996. ...
Telemarketing office Telemarketing is a method of direct marketing in which a salesperson uses the telephone to solicit prospective customers to buy products or services. ...
Evolution While the idea of storing customer data in electronic formats in order to use them for database-marketing purposes has been around for decades the computer systems available today make it possible to have the complete history of a client on-screen the moment he or she calls. Today's Customer Relationship Management systems use the stored data not only for direct marketing purposes but to manage the complete relationship with this particular customer and to further develop the range of products and services offered. Customer relationship management (CRM) is a broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer, vendor, partner, and internal process information. ...
Services are: plural of service Tertiary sector of industry IRC services Web services the name of a first-class cricket team in India This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ...
See also Customer relationship management (CRM) is a broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer, vendor, partner, and internal process information. ...
In marketing, the Lifetime Value (LTV) of a customer is the present value (usually expressed in currency) of future profits that can be derived from a customer based on the profits that have been received from that customer in the past. ...
References - Baesens Bart, Stijn Viaene, Dirk Van den Poel, Jan Vanthienen, and Guido Dedene (2002), “Bayesian Neural Network Learning for Repeat Purchase Modelling in Direct Marketing”, European Journal of Operational Research, 138 (1), 191-211.
- Optimal Database Marketing, Drake & Drozdenko, Sage Publications (2002)
- Hughes, Arthur M. (2000), Strategic Database Marketing: The Masterplan for Starting and Managing a Profitable Customer-Based Marketing Program, 2nd edition, McGraw-Hill, New York.
- David Shepard Associates (1999), The New Direct Marketing: How to Implement A Profit-Driven Database Marketing Strategy, 3rd edition, McGraw-Hill, New York.
- Hillstrom, Kevin (2006), Hillstrom's Database Marketing, Direct Academy
- Peppers, Don and Rogers, Martha (1996), The One to One Future (One to One), Current.
- Prinzie Anita, Dirk Van den Poel (2005), "Constrained optimization of data-mining problems to improve model performance: A direct-marketing application", Expert Systems with Applications, 29 (3), 630-640.
- Tapp, Alan (1998), Principles of Direct and Database Marketing, Trans-Atlantic Publications.
- Prenner, John (2000), ROI Driven Database Marketing, UC Press
- Van den Poel Dirk (2003), “Predicting Mail-Order Repeat Buying: Which Variables Matter?”, Tijdschrift voor Economie & Management, 48 (3), 371-403.
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