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What Is Database Marketing?

Database marketing is a form of advertising in which large sources containing specific information about potential customers are used to target individuals or groups of individuals by sending them customized marketing messages. Read on for more information about database marketing.

Industry Overview

According to the Database Marketing Institute, individuals who work in database marketing attempt to predict the behavior of certain numbers of customers and design marketing campaigns aimed at those individuals and their purchase preferences and product trends. Database marketing relies on databases and warehouses of detailed information about customers. These databases are analyzed to determine segments of customers or prospective customers who have specific needs, behaviors, or attitudes. Besides customer segments, models may also be developed from the databases to predict the likelihood of certain customers buying a product or service.

The customers or prospective customers are then sent customized marketing communication. For example, database marketing might be used to identify a company's best customers and then create special services and programs specifically for those customers. An easy example of database marketing is the personalized coupons you receive from your local grocery store, already tailored to products you purchase on a regular basis.

Important Facts About This Occupation

Mean Salary (2018) $63,120 (market research analysts and marketing specialists)
Job Outlook (2016-2026) 23% (for market research analysts)
Work Environment Office setting
Similar Occupations Advertising, public relations, economists

Source: U.S. Bureau of Labor Statistics

Personalized Communication

The purpose of database marketing is to improve sales, increase order size, and help retain customers. As the Database Marketing Institute points out, successful database marketing should make customers feel good and help them identify themselves with a company's products or services. While databases and warehouses of information are important, the focus of database marketing is the personalized communication that is designed specifically for the customer segments identified by analysis of data from a database.

Delivered over many media, including phone, direct mail, websites, and e-mail, the communication is meant to establish and maintain a personal relationship with the targeted customer. The Database Marketing Institute suggests that the process is an incremental one where, through the exchange of information with clients, a business can continually improve upon measurements of customer care, such as customer retention, customer response, cross sales, and average order size.