Database Marketing 101: Part 1

I don’t know about you, but I get tons of email. Sure, I live and work in this space; it’s what I do. But occupation aside, I’m also a web consumer. And a business owner. And an online news aficionado, hungry for content.

As a result, I’ve plugged into a number of different email offers out there – from shopping and B2B sites to online publications. From the most popular to the most obscure.

And what have all of those email services gotten me? Well, some good products, ideas, and reading material, to be sure.

But also way too darned many emails.

Okay, here’s my New Year’s Resolution: I vow that one day soon I will be subscribed to only the most necessary emailed newsletters and services.

So, you ask, just what constitutes “necessary”?

In a word: RELEVANCE.

In other words, if you want to keep my name on your email file, speak to me about what’s really important, with messages and offers that are truly customized and meet my own personal needs and interests.

That’s the beauty of database marketing. It can do all this. And more.

Take a look at Amazon, for instance. Its email service, which sends book offers and discounts based on customers’ selected areas of interest, is one of the first that I ever subscribed to… and will no doubt be one that I retain over the long haul.

Why? Because every time I get a message from Amazon, I know it’s going to be worthwhile. Before I even open it. Granted, the messages may not be personalized to the point that they address me by name; nonetheless, this doesn’t make or break the service for me.

In fact, Amazon has gotten more business from me than even I expected to give it. And it’s all because of its reasonably simple email service, which often leaves me saying, “Gotta have it.”

Of course, it could get a lot more complicated if Amazon were to slice and dice even further. (And maybe they already DO slice and dice more than I’ve suggested – I’m not privy to Amazon’s database strategy!) Here’s a hypothetical example to illustrate…

Say there are 50,000 subscribers who, like me, have an interest in books in the “Business and Investing” category. If Amazon wanted to fine-tune (and strengthen) its offers and strategy, it could split this list a hundred different ways and market differently to each segment.

It could group folks by criteria such as date of last purchase, number of purchases over the last three/six/twelve months, and whether they subscribe to other interest categories (and which ones). Other segments can include people who responded to specific offers. And which books they actually BOUGHT.

As you can see, there can be dozens, even hundreds, of potential segments, each with its own “hot button.” The key, of course, lies in not only how the list is split, but how each segment is marketed to. In other words, how each segment’s hot buttons are targeted with multiple offers and messages.

If you’re not currently using a database to enhance your relationships with your customers, consider it the foundation of your future email marketing success. Begin laying the groundwork now by planning or implementing the following:

  1. Analyze your current customer database. What have your customers purchased? What are they interested in? Which key points or segments of your database would be the most relevant or suitable for your offer(s)? Maybe it’s just a matter of targeting emails to subscribers based on categories of interest, as Amazon did.

    Or maybe your business calls out for a service such as the Sale AAlert program offered by American Airlines, in which a traveler can register his home city as well as the cities he visits most frequently. When relevant flights go on sale, American sends off a personalized email “alert.” A much more complex scenario, to be sure, but a good example of solid database marketing in action.

  2. What assumptions can you make about your customers? If you’re selling high-end baby gift items online, will your 40- to 55-year-olds be more interested in the 18-karat gold-rimmed pacifier or the DKNY infant sweatsuit?
  3. Plan your offers according to your answers to the questions above. Don’t forget to consider format decisions such as whether or not to use or test HTML and/or rich media.
  4. Build your database. Include any pertinent variables from the above analysis that can be turned into data fields. Think about your reporting functions and prioritize your fields in terms of weight.

Of course, it can get a heck of a lot more complicated than this, and we’ll explore more details next week in Part 2. But my strongest suggestion is to begin looking for outsourcers now, especially if you want to use email as a marketing tool in the future.

Mark my words: Relevance will be key.

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