Database marketing is the single most impactful investment you can make as an eCommerce store.
Why? Because today, more than ever, it is possible to collect, analyze, and apply customer data to create personalized offers. And personalized offers have greater conversion rates, higher profits, and unlock further investment opportunities.
This post breaks down what database marketing is. We give an overview of the various types of database marketing, along with a number of specific examples to learn from.
What is database marketing?
Database marketing describes using customer data to determine what messages to send.
In addition, customer data determines the best way to communicate, optimal send times, and which channels to use.
Because database marketing targets users directly, it is a type of direct marketing. However, as opposed to other types of direct marketing, customer database marketing operates at the individual level.
While segments are often created (especially behavioral segments based on previous customer actions), the message itself is often personalized with 1:1 details to increase effectiveness.
Benefits of database marketing
Database marketing offers a number of benefits over traditional marketing.
The biggest improvements stem from the combination of deep customer databases and personalization software.
Database marketing is centered on presenting relevant, compelling messages to the right customers. As a consequence, average conversion rates across the funnel, from open rates to sales increase.
Further, by utilizing known customer preferences, product affinities, and past orders, companies can increase the AOV of each customer purchase.
An often overlooked capability database marketing unlocks is pricing strategy implementation.
Because marketing communications are informed, customers only receive messages that are relevant to them. This is especially powerful when used in conjunction with after sales service and product extensions based on purchase of a specific SKU.
As a result of better conversions, higher purchase orders, and price optimization, database marketing results in a higher ROMI. This has a number of second order effects, from opening up more expensive marketing channels while maintaining profitability, to being able to provide better incentives to first time customers.
Improve Your Database Marketing: Barilliance enables eCommerce stores to apply database marketing techniques with easy tools. No IT resources required. Learn more here.
Types of database marketing
Frameworks help marketers make sense of data. Each transforms how database marketing is implemented.
We've covered many of these database marketing types in other articles. Below, I give a brief synopsis and link to further resources.
RFM Analysis is one of the earliest forms of database marketing.
We've written on of the top guides on RFM on the internet, showing in detail how to perform your own Analysis either through Barilliance or on your own in a spreadsheet. You can check it out here.
However, in short, this framework focuses on three metrics - how recent has a customer bought from you, how often they purchase from you, and what value have they spent with you to determine how much and when you should invest in further marketing efforts.
Lifecycle marketing focuses on the broader customer journey.
Each business determines what stages constitute this journey. However, there are three general stages a customer passes through.
The first stage is customer acquisition, where a visitor first becomes a customer. Second is customer retention, wherein a customer continues to engage with your brand and shows loyalty through repeat purchase.
Finally, there is a customer development stage where customers expand into other product lines or refer clients. You can learn more about advanced customer lifecycle marketing tactics here.
Omnichannel marketing focuses on creating a coherent customer experience across marketing channels.
It relies heavily on a database that is capable of creating a single, 360 degree customer profile.
Brand channels are then able to reference past customer interactions on other platforms to optimize customer experiences.
Amazon uses customer data better than most. Above, Amazon uses customer data to determine not only messaging, but also what products to carry in store. Honestly, you can learn a lot about Omnichannel techniques from Amazon - check it out here.
Retention marketing is a more general database marketing strategy that emphasizes current customers.
Repeat purchase, increased AOV, and an overall increase in LTV is often leveraged into expanding additional communication and acquisition channels.
Retention marketing is a very deep topic. We've gathered a number of retention marketing examples here.
How to build a marketing database
Ultimately, database marketing depends on how rich your customer database is.
The challenge is to first collect the right data, and second connect it. Customer data is spread across platforms, from in-store purchases, to eCommerce sites, to social media interactions.
Above, Zaful recognizes new users and offers them 15% off to register.
Transforming anonymous visitors into known prospects
The first challenge is to id customers.
Popups remain an incredible tool for eCommerce stores. Combined with proper incentives, pop-ups not only identify an anonymous visitor, but also gives you permission to follow up with them.
Unfortunately, even if you've previously obtained contact information, it is useless unless you are able to identify returning visitors.
There are a few solutions. Below, Bookings.com prompts returning visitors to sign in to view discounts.
At Barilliance, in addition to triggering pop-ups, personalized content, or message bars based on returning or new visitors, we also allow you the ability to trigger emails. We call this capability the email booster, and we've shown how it can triple abandoned cart recovery rates.
Aggregating customer data with personalization software
Identification is the first step. Compiling useful customer data is the next.
Personalization software like Barilliance allows you to collect and connect customer behaviors (like pages and products visited), infer product and category affinities, and record purchase history across channels.
A successful database marketing strategy is profitable for the best reasons. It serves customers better, and allows you to present the true best offer for each individual.
If you'd like to see how Barilliance enables hundreds of top eCommerce brands to use database marketing, request a demo here.