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Direct marketing versus database marketing: what you don't know could hurt you

August 20, 2008 Do you understand the evolution of direct marketing to what is now referred to as database marketing?  This is the single greatest aspect of your marketing efforts.  Let me explain the difference:

Direct marketing:  creating a brochure, catalog or direct mail piece and mailing it to a list of potential or current customers in hopes that it hits an emotional response and they buy.  More often than not it fails. 

Database marketing:  building a database that captures how a current customer and potential customer want to be marketed and then applying that knowledge in whatever direct way fulfills their emotional need:  catalog, eNewsletter, website, landing page, direct mail piece, phone call, snail mail coupon, etc. 

An example:  Amanda fits into X's target audience and they send her catalog after promotion piece after direct mail piece.  She never purchases from them unless she gets an email coupon in her inbox or is notified about a special on their website.  She spends a couple minutes flipping through their catalog, then tosses it into the recycle bin.   They can only reach her one of two ways:  through a newsletter that has specific articles about situations she's facing in school (and supplies the products that match, so she then buys) or via an email.  She finds catalogs offensive because they use paper, and if they're not using recycled paper, she declares a boycott. She doesn't think it's sustainable. That's the type of information you need when a successful database.  

In larger companies, this is called Customer Relationship Management (CRM). To small companies that don't have huge staffs and large resources, it's usually called building a great customer database (hence the name database marketing).

The evolution from direct marketing to database marketing started happening back in the late 1990s and evolved based on customer demand.  Meeting that need is the difference between growing your company from a small business to the $50 million mark.  Dell built their reputation on it.

So how do you start gathering this information?  Inside CRM breaks it down into 9 steps:
1. Define the customers you want
2. Find the customers you want
3. Gather input
4. Organize the information according to product segments or categories
5. Find the right software and hardware to disseminate the information
6. Keep the information current
7. Ensure privacy
8. Back up your data
9. Measure results

Posted by Suze Bragg on August 20, 2008 | Comments (2)