Marketers must know their customers. And in order to know the customer the company must collect information and store it in a database and do database marketing. A customer database is an organized collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for such marketing purposes as lead generation qualification; sale of a product or service, or maintenance of the customer relationships. Database marketing is the process of building maintaining and using customer database and other databases (products, suppliers, resellers) for the purpose of contacting, transacting, and building customer relationships.
As the former chief marketing officer of Amazon liked to point out, when you walk through the door at Macyâ€™s the retailer has no idea who you are. When you log on to Amazon , however, you are greeted by name, presented a customized set of product purchase suggestions based on your past purchase choices and offered an accompanying series of frank customer reviews. As you log off the site, you are also asked permission to be e-mailed special offers.
Many companies confuse a customer mailing list with a customer database. A customer mailing list is simply a set of names, addresses and telephone numbers. A customer database contains much more information, accumulated through customer transactions, registration information, telephone queries, cookies, and every customer contact.
Ideally, a customer database contains,
The consumerâ€™s past purchases,
Other useful information
The catalog company Fingerhut possesses some 1,400 pieces of information about each of the 30 million households in its massive customer database.
Ideally, a business database would contain business customersâ€™ past purchases; past volumes, prices, and profits; buyer team member names (and ages, birthdays, hobbies, and favorite foods); status of current contracts; an estimate of the supplierâ€™s share of the customerâ€™s business: competitive suppliers: assessment of competitive strengths and weaknesses in selling and servicing the account; and relevant buying practices, patterns, and policies.
Data Warehouses and Data-mining:
Savvy companies are capturing information every time a customer comes into contact with any of its departments. Touch points include a customer purchase, a customer requested service call, an online query, or a mil-in rebate card. Banks and credit card companies, telephone companies, catalog marketers, and many other companies have great deal of information about their customers, including not only addresses and phone numbers, but also their transactions and enhanced data on age, family size, income, and other demographic information.
These data are collected by the companyâ€™s contact center and organized into a data ware-house. Company personnel can analyze the data.
World over, the hotel industry is a large user of database marketing. In India too, some large hotels have been using this technique.
The Hyatt Regency Hotel in Delhi is one example.
Through its customer database, the Hyatt has been able to reach specific categories of people such as administration executives and travel, managers of large organizations, who normally play a key role in hotel reservations.
The Hyatt customer database contains lists of patrons classified suitably. Depending on the context and the seasons, Hyatt picks relevant lists and sends the patrons a special communication.
For example, during the Indian general elections, Hyatt sent communication to all foreign journalists who were likely to come over to India to cover the elections. Hyatt warmly invited them to stay at the hotel and reminded them that the hotel had all the facilities that they might need
Market Research (MR) helps to know which products move in the market and why:
Data from MR agency ORG â€“ MARG has revealed that in 2000-01 a number of FMCG products/brands achieve a double digit growth rates, though the FMCG sector as a whole stagnated with a nominal growth of 1.5% at that time.
To be precise, 27 of the 87 FMCG product categories that ORG-MARG tracks witnessed double digit growth during the 12 months ending September 2001. This is an interesting sample of the kind of insights that marketing research can bring forth.
FMCG firms will obviously have great use for such insights. It sets them to think: After all, not all FMCG products are doing badly. Which are the products that do well? Why? What can we do?
MR provides the answers to these questions as well,
Products that are in alignment with the cultural shift that is taking place in many Indian homes are experiencing high growth.
There is a new acceleration in the trend of switchover from commodities to branded products. Consumers are moving away from loose commodities to branded and packaged products. Packaged groceries â€“ Flour, salt and rice are growing at the high rate of 19.8 %. Also, packaged pure ghee, vermicelli and refined edible oils are growing at 14.7, 12.4 and 12% respectively. Moreover, in these cases, the organized sector players have been able to add value.
Consumers are looking for convenience, personal care etc. So, products that allow consumers to upgrade habits have growth at a high rate. Shampoos for example, have grown at over 10%. Within this product category anti-dandruff shampoos have grown at a much higher rate. This could be due to the growing consumer concern for hygiene.
For some categories, the high growth is an offshoot of low market penetration. Low penetration categories like deodorants are bound to grow faster than categories like washing soap bars, which have already attained mature penetration levels.