Database marketing is about creating customers. Once you have a customer, you have a first sale and an opportunity to make the second, third, and more sales over time. If you settle for a single sale but lose the customer, you must start over and resell each and every time.
Creating customers will help you maximize sales by establishing and nurturing customer relationships. The tool used to do this is the database. It is the means by which you can build a long-term, interactive relationship between your product and your consumers. It will allow your business to become a more efficient and effective communicator with customers and prospects.
Database marketing is a combination of strategic marketing planning, creative communications, data, technology, and statistical analysis techniques. All are critical for the success of any program.
One of the key analytical techniques used in strategic planning is the MOST Analysis: This helps to clarify where the business intends to go (Mission), establishes the goals that will help to achieve this (Objectives), analyzes what options there are for proceeding forward (Strategies), and determines how these strategies are going to be put into action (Tactics).
The key is for this whole process to hang together from top to bottom and also in reverse: From the top, clarifying the mission drives the objectives, which creates strategic options, which forces tactical actions to be taken; from the bottom, every action at the tactical level should help to make the strategies work, all strategies should help to achieve the objectives, and all the objectives should take the business towards the mission.
Businesses fall into many traps by attempting to tackle strategy internally:
- Getting distracted from moving the business forward by day-to-day actions or demands from customers, suppliers, and competitors
- Failing to clarify where it wants to get to and in what timescale
- Failing to secure board and management agreement for the mission
- Not clarifying the key objectives that need to be reached (and in what timescale) for the mission to be successful
- Not getting external and objective assistance in analyzing the strategic options available to satisfy the key objectives
- Missing out the strategy stage altogether by going straight from objectives to tactics, which leads to a lot of dead ends
- Not ensuring that everything done at tactical level helps to ensure success of the strategies
- Failing to properly define timescales, responsibilities, monitoring, and control procedures to ensure that implementation moves forward at the necessary speed
External strategic planning helps companies avoid these traps and keeps the business moving forward with a sense of urgency and in a clear direction that "hangs together," from Director to ticket booth sales.
The following example (for a professional sports team) is a detailed listing of the types of planning and analysis that is necessary to retain customers and prospect for new ones, while keeping cost to a minimum.