Database marketing

Database marketing is a systematic approach to the gathering, consolidation, and processing of consumer data (both for customers and potential customers) that is maintained in a company's databases. Although databases have been used for customer data in traditional marketing for a long time, the database marketing approach is differentiated by the fact that much more consumer data is maintained, and that the data is processed and used in new and more sophisticated ways. Among other things, marketers use the data to learn more about customers, select target markets for specific campaigns (through customer segmentation), compare customers' value to the company, and provide more specialized offerings for customers.
Database Marketing is a powerful competitive weapon for companies - especially large ones. The growth of database marketing is rooted in the small business philosophy of staying close to the customers, under-standing and meeting their needs and treating them well after the sale.
Much corporate marketing is tied to big, general marketing or advertising campaigns with a single message - the same for everyone. This message may be based on the companies Unique Selling Proposition (USP). However, customers have different needs and a single USP spelt out to the whole market is no longer enough.
Messages must be tailored to specific segments of the market and ultimately to the market segment of one, the individual customer. Computerizing the customer database makes it possible to address messages more specifically and market additional products to each customer.
In an effort to more effectively target potential customers, many enterprises use database marketing to build models of their target demographic group, track down these groups and focus their advertising budgets on them in the hope that it will result in an improved return on investment (ROI) from their advertising spend.

At its most basic level, database marketing is the analysis of databases holding information about previous or potential customers. These databases usually consist of basic personal details of customers along with details of their past transactions. The information is either gathered from internal sales data or bought in from other organizations.