What is database marketing explain the types of information that are recorded on a database?

Database marketing is the single most impactful investment you can make as an eCommerce store. Today, customer data can be collected, analyzed, and leveraged to create personal offers.

With database marketing, you will increase conversion rates, generate more profits, and unlock future investment opportunities. Below we include examples from top brands including Amazon, Sephora, Target, and Etsy.

If you'd like to skip straight to the database marketing examples, click here.

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 customer 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. 

1. Improved Conversion Rates

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.

2. Increase Average Order Value (AOV)

Further, by utilizing known customer preferences, product affinities, and past orders, companies can increase the AOV of each customer purchase.

4. Better Pricing Strategy

An often overlooked capability database marketing unlocks is pricing strategy implementation.

4. Excellent Customer Service & Interactions

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.

5. Higher Return on Marketing Investment (ROMI)

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.

Database marketing examples and strategies

Below is a series of database marketing examples. The various ways to use customer data show how flexible customer database marketing can be. 

Database Marketing Example Strategies

1. Recency, Frequency, Monetization (RFM) Marketing

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. 

2. Customer Lifecycle Marketing (ft. Starbucks) 

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.

3. Omnichannel database marketing example strategy (ft. Amazon)

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.

4. Retention Marketing (ft. TheRealReal)

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. 

Database Marketing Example Tactics

5. Increase retargeting campaign potential with outreach campaigns (ft. sephora)

Regular outreach campaigns are crucial to re-engage your customer base and gather the data needed for triggered retention campaigns.

Below is a great database marketing example from Sephora. In this case, they are targeting members of their loyalty program, "Sephora Insiders" who haven't made a recent purchase.

The offer is clear and powerful - "Don't forget your $15 off of $ 75". Once engaged with, Sephora is able to enrich the customer profile with the items purchased, and make use of the next database marketing example tactic: replenishment campaigns.

6. Combine product and customer data to time replenishment campaigns (ft. Tula)

Customer database platforms give you the ability to record which customers bought which products.

This information is incredibly useful for consumables. Below is an excellent example of how to use database marketing to fuel replenishment campaigns.

Tula highlights the major benefits of their auto-delivery product:  15% off, free shipping, and a bonus free gift. These benefits help remove obstacles to repurchase and have the net effect of increasing customer lifetime value.

7. Optimize customer engagement with personalized channels (ft. Fashion Nova)

Customers have different habits. Some use Twitter. Others prefer Instagram. Some check their email. Others don't.

Customer database marketing allows eCommerce stores to identify which channels prospects are most likely to engage with.

Below is an example of Fashion Nova triggering a shopping cart abandonment campaign not through traditional email channel, but via Facebook Messenger.

8. Dynamically create cross-sale offers based off of previous search history (ft. Etsy)

Another great application of database marketing are category pages.

Category pages are often overlooked, with brands focusing more on landing pages and product page design. Above is a great example from Etsy.

Etsy tracks customer's previous searches. With this data, they are able to inject a variety of personalized widgets offering cross sales and searches. This not only streamlines the product discovery process, but helps Etsy make incremental sales from the same shopping session.

9. Using demographic data to time and personalize lifecycle campaigns (ft. Target)

One of my favorite examples of database marketing is when brands are able to anticipate needs.

Here, Target is able to do just that with baby products and new families. When combined with a deep understanding of what customer preferences are through a number of key development stages, they are able to create entire campaigns to not only serve their customers better, but win a larger share of wallet.

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.

Next Steps

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.

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