Strategic Database Marketing

If you don’t already know, acquiring a new customer is far more expensive than keeping an old customer. The longer you can keep a customer the more profitable they become so keeping a relationship with your current and past customers is very important. Following is a graph which displays the profitability of customers over time.

Database marketing not only helps you to keep a good relationship with your customers but it also helps you to maximize the profit you make from each customer. Database marketing includes three main steps; storing customer demographic details and sales details in a database, keeping regular contact with customers such as wishing them a happy birthday and sending them demographically targeted promotions. Some examples of these three steps follow.

• Storing Customer Details – CustomerID, FirstName, LastName, DateOfBirth, Sex, Address, Country, Email, Phone and JoinDate
• Storing Sales Details – SaleID, Product, Category, Cost and CustomerID
• Regular Contact – Birthdays, Christmas and other suitable events.
• Targeted Promotions – For men, for women, for 30 to 40 year olds, for Australians and so on.

Creating a Database

In this section I will provide working examples of tables and data. If you are not in IT you should give this section to your Web Developer or IT Specialist. In the section above I listed the data that needs to be stored and following is the database design to reflect that.

Customers(CustomerID, FirstName, LastName, DateOfBirth, Sex, Address, Country, Email, Phone, JoinDate)Sales(SaleID, Product, Category, Cost, CustomerID*)

Outputting Useful Information

The best way to select information form a database is by using SQL. SQL stands for Structured Query Language and simply saved you from having to manually look through a database, you write an SQL query and it does the searching for you. I can’t explain SQL here as it’s too big of a topic but I will be listing SQL queries which you can use in your database. Once again if you are not in IT you should give the SQL queries to your Web Developer or IT Specialist. But if you are not in IT, don’t stop reading just yet, this knowledge is still very relevant to you and will show you how you can use a marketing database effectively to improve customer relationships and make some extra sales.

Generate a Demographic Map

Knowing where your customers live is important if you do offline promotions, by creating a demographic map or outputting the amount of customers living in each country you can easily see which countries have the highest amount of customers living there. The SQL query listed below will list all countries in which your customers live along with the amount of customers from each country listed from most customers to least.
SELECT Country, COUNT(Country) FROM Customers GROUP BY Country ORDER BY 2

Sales Category Distribution

Knowing which categories of product sell most successfully will help you in deciding which new products to introduce and which topics you should focus on in your promotion. The SQL query listed below will list all product categories which your customers have purchased from with the amount of sales in each category listed from most sales to least.
SELECT Category, COUNT(Category) FROM Sales GROUP BY Category ORDER BY 2

Targeted Promotion – By sex or previous purchases.

Rather than sending untargeted promotions to all of your customers, sending targeted promotions to specific groups can be far more effective (and less annoying). An example of this is if you are clothing store, you would send promotions about the Mens Suits to only males and possibly over the age of 18. This will help to keep a good relationship with customers because you are treating them as individuals sending them only promotions they are interested in. Following is an SQL query to display the name and email address of all men in out example database.
SELECT FirstName, LastName, Email FROM Customers, Sales WHERE Customers.CustomerID = Sales.CustomerID AND Sex = 'Male'

Identify Your Best Customers

Thanking your highest spending customers could not only increase their purchases further but it can also increase word of mouth. One example of a company who thank their best customers is Google, they send Christmas gift packages to the highest earners of their Google AdSense program, and it does generate a lot of word of mouth for them. Following is an SQL query to display the top 5 spending customers for the example database.
SELECT CustomerID, SUM(Cost) FROM Sales GROUP BY CustomerID ORDER BY 2 DESC LIMIT 0,5