Marketing Competence :: Basics

With the dramatic changes in the social, technological and market environment came new methodologies - and new terminologies. Various word creations hit the market, adding to the confusion rather than making things easier and clearer. Some of them are:

• Database Marketing
• Loyalty Marketing
• Relationship Marketing
• One-to-One Marketing
• Segment-of-One Marketing
• Affinity Marketing
• Individualized Marketing
• Measurable Marketing
• Curriculum Marketing

Confused? Well, if you now remove the word Marketing from each expression and sum up the words left in the list, it will tell you exactly what it is: database-centered, relationship-based, individualised (one-to-one), and measurable Marketing - nothing more, nothing less.

In traditional circles, however, Database Marketing is still used as a more modern term for Direct Mail, and often also as a substitute for Direct Marketing - even in these days. This misunderstanding is rather strange, as both terms leave nothing to speculate: Direct Mail is just that - mail sent directly to the prospective, lapsed or current customer. Direct Marketing, which is the superset of Direct Mail, merely means that the message is conveyed (and often the product sold) directly to the customer - without the interference of intermediaries.

This said, the definition of Database Marketing is also very simple and straight-forward: it is Marketing that originates from the database. This doesn't mean the action taken needs to be direct, nor does it mean that the medium has to be mail. You may, for instance, discover that most of your existing customers read a specific magazine, so you decide to place (additional) funds into mainstream advertising in that magazine. Is it direct? Or is it mail? The answer in both cases is 'No', yet it's still Database Marketing.

More than communications

But this is all communication-related, which merely covers one of the now five P's in the Marketing Mix. Where does it leave the product, its price and distribution channels, as well as the people who represent the brand to the consumer? The answer to this finally reveals the whole meaning and scope of true Database Marketing: all elements in the marketing mix affect and are affected by the database. They are instrumental in transmitting information, means filling the database with meaningful data, only to become re-transmitters of information - originating from database analysis.

In practice this means that, for instance, you discover that increased activity in one store requires additional staff to be sent there, or that customer feedback indicates a shortcoming in training in another outlet. It may make you aware of problems in the distribution channel, as well as any issue related to the actual product or service.

Finally, and this is something that has also been dealt with for years in various publications, seminars and books, you will realise that the database affects your entire business operation as it functions as a research and planning facility, and that Marketing is no longer an isolated business function but an all-encompassing methodology that transcends all areas of your business. No longer confined to Advertising and Sales Promotion, not even to the direct communications channel, Marketing represents every single aspect internal and external customers are exposed to, eventually creating or destroying the basis for a properous and long-term business relationship.

In essence, Marketing has become everything, and everything has become Marketing. The database is at the root of your decision-making process.

The sale is no longer a result of personal effort or creative campaigns, but the last link in a complex but functioning relationship between the buyer and the seller. The sale is also not seen as a one-off transaction, but the creation of a basis that leads to another sale.

The task of relationship management is of paramount importance, because only this allows you to gather relevant data in the first place.

With increasing product parity, opening markets, and fierce competition on a global scale, dominated by accelerating technological change, the bond between the buyer and the seller has to be sound and strong. At the base of this resides the database, which from now on assists you in nurturing your customer relationships, and determines your path of action.

Donnelley Inc. reported more than two years ago that 85% of US retailers and manufacturers believe they'll need Database Marketing to be competitive past the year 2000 - it would be foolish to think they only meant mailings.