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Can database marketing work in biz-to-biz?

Reprinted from News-To-Use, Vol.6, No.2.
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It goes by different names- database marketing, relationship marketing, one-to-one marketing- but it all adds up to the same thing: companies collecting specific information about you and using that knowledge to craft a marketing message designed to get you to buy.

It all started with the so-called mass market of undifferentiated, mass-produced products and messages (you can have any color of car you want... so long as it's black.) Then came "market segmentation," which divided consumers into smaller groups with common demographic or psychographic characteristics. Today, ever faster and more powerful computers are enabling marketers to zero in on smaller and smaller niches, with an eye on the smallest consumer segment of all: the individual.

Database marketing is now moving into the marketing mainstream, as companies of all types come to believe that nothing is more powerful than direct knowledge about customers' individual practices and preferences.

General Motors, Blockbuster Entertainment and Kraft are all big players in this style of marketing, but are the techniques relevant to the business-to-business marketer? Certainly some of them are. If your database of past customers is sufficiently flexible, it might yield a subset that would be ideal for a new product you're coming out with.

In a sense, this relentless drive to make marketing more efficient is an effort to end junk mail as we know it- if junk mail is defined as "anything I didn't ask for and wouldn't be interested in."

It's why even biz to biz marketers are seeking more information than ever about their customers and prospects- it's because they know that past customer behavior, as recorded in actual business transactions, is by far the best indicator of future buying patterns.

If you haven't already done so, now would be a good time to add your current and past customers to a database. Make room for as much information as you can, but pay special attentions to the kinds of data fields that will suggest what their future product needs may be. To refine you list, consider sending out surveys asking for more information- your response may not be large, but the results could be golden.

Use warranty cards packed with your products to gather information. Surprisingly, people will tell you tons of information about themselves and their companies on a warranty card... if you just ask.

Use your database to keep your current customers happy. Happy customers remain customers, and it's much cheaper to keep existing customers than to find new ones. Maybe your newsletter could suggest new or alternate uses for your product, or ways to extend its useful life.

Where will it go from here? Well, it's safe to say that database marketing won't supplant traditional media advertising for most products and markets anytime soon. But when properly used, it can dramatically improve the efficiency of your marketing efforts.

It's worth looking into.

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