Database marketing
is the process of collecting customers' names and email addresses and using them for marketing purposes. Software companies or companies that do business online usually have advantages in collecting customer email addresses. However, retail companies can start databases by having customers sign up for loyalty programs, where they get rewarded based on their volume of purchases. Whatever the case, there are certain strengths and weaknesses inherent in using databases for marketing purposes.
Disseminating Information
One strength of database marketing is that you can use it to disseminate information about products or services. You can only explain so much about your wares in print, radio or television ads. However, database marketing provides a way to share detailed information about your products, features and benefits. Write email messages in letter or newsletter form, providing customers with facts and comparisons of your products to those of key competitors. Send emails out regularly to educate your customers on the dangers of overusing your products, especially if you sell medicines or over-the-counter drugs.
Building Repeat Business
Database marketing also allows companies to gain repeat business. Many companies will compose email ads designed to pull in leads or direct orders. The ads will often direct customers to a contact page where they will opt in, or voluntarily request additional information. The contact page will then redirect customers to the company's main website. Having a database with these capabilities allows you to continuously send coupons and special promotions to paid customers. Consequently, you can build repeat business as long as you offer quality products at fair prices. Send emails to customers on a monthly basis, varying your ads and product specials so you're not sending the same deals out each time.
Cost
The cost of sending emails is nominal. However, databases are very costly to maintain, because you need to devote someone to database marketing full-time. Database marketing campaigns must be ongoing to be successful. Additionally, it is expensive to install and set databases, according to Installsoftware.com, experts in database marketing. You will need to purchase the database software, then program it according to your specific needs. If you do not have programming experience, you may need to hire someone to install your system. This can be quite costly, too.
No Focus on New Customers
Database marketing is highly focused on existing customers, but not new ones. Thus, you will need to acquire new customers through other methods to offset lost customers. Customers can move, switch to competitive products or pass away. Therefore, keep feeding new customers into your database from other advertising sources. Purge your system of old names and email addresses. Keep your database lists current.
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