Definition of Database Marketing
Database marketing refers to the use of a database of contacts, customers, or calling lists that are leveraged for marketing or business purposes. Maintaining a database of contacts enables contact centers to add and remove calling list records, eliminate duplicate contacts, create unique identifiers for contacts to ensure accuracy and consistency, segment contacts, integrate contact center activities with other customer touchpoints, and more. In short, the database serves as the central, shared source of customer and prospect information which can be used for a variety of business purposes, including marketing and customer relationship management.
Database marketing metrics include data points derived from the database and integrated data sources, and metrics surrounding the database’s performance, such as:
- Database growth: Is your database increasing in volume and evolving over time?
- Pipeline growth: Is marketing delivering marketing-qualified leads? How effective is your marketing team at qualifying sales-ready leads?
- Marketing-attributed revenue: What portion of company revenue can be directly attributed to marketing activities? Revenue attribution metrics can be further broken down by channel.
- Customer retention and churn rates: How many customers is your company losing compared to customer retention rates? Are there specific behavior patterns that can predict customer churn?
How Database Marketing Metrics Work
Database marketing metrics are particularly powerful, as they allow for both high-level and deeper-level analysis of the entire database, of defined segments (such as customers by channel, customers meeting certain demographic criteria, etc.), or of individual customers or prospects. For instance, contact centers using database marketing can easily drill down to analyze data on customers who have churned within the past 30 or 60 days to evaluate behavior patterns leading up to the point of exit to determine if there’s a tipping point at which the company loses a customer. These insights can be used to create actionable customer retention plans designed to proactively target at-risk customers in order to influence outcomes.
For instance, a contact center may determine that customers are most likely to churn after three contacts, using this information to create a retention strategy that routes callers to an agent group specifically trained in providing discounts, special offers, or other remedies to regain consumer trust and loyalty.
As another example, a company that breaks down a database by channel to identify the highest-value consumers can leverage this data to implement a targeted up-sell strategy. Behavior analysis and purchase patterns can inform new product development or reveal untapped markets. For call centers, database marketing metrics can be used to analyze call records, identify patterns, segment contacts, and target strategies aimed at boosting customer satisfaction. There are practically endless ways for contact centers and companies to transform data into actionable opportunities.
Benefits of Database Marketing Metrics
Leveraging the wealth of data that can be gleaned from a well-managed database gives companies spanning nearly every industry the power to influence sales, customer retention, and the company’s bottom line in ways once difficult to achieve before the proliferation of Big Data and improved access to database management and analytics tools. In today’s call centers, a database is the core of effective performance improvement, providing the foundation for gathering and organizing data about every contact, call outcomes, and cross-channel metrics that provide insight on customer interactions with the organization not only through the contact center but every touch point.
Database marketing metrics enable companies to:
- Establish baselines and benchmarks
- Define KPIs
- Measure performance
- Monitor customer behavior patterns
- Leverage data to inform strategy development
Challenges of Database Marketing Metrics
The biggest challenge companies face when it comes to database marketing metrics is knowing what to track. With vast quantities of data and seemingly endless metrics, it’s possible to become so consumed by the raw data that you fail to analyze the most important metrics to glean actionable insights that matter to your business, your department, or a specific business function – whether it’s customer service, customer support, marketing, sales, new product development, or something else.
Best Practices for Database Marketing Metrics
The way to overcome this key challenge is to implement best practices from the start, from setting up your database to practicing good data hygiene. Best practices for effectively managing your database, monitoring and analyzing data include:
- Ensure that your database is properly integrated with all channels and touch points. If your data exists in silos, it’s more difficult to consider all possible variables when analyzing behavior metrics or other data points.
- Establish benchmarks. Database marketing metrics provide deeper insights when you have a baseline against which to compare new data. For instance, it’s difficult to measure the precise impact of a new customer support channel when you don’t have accurate data on customer satisfaction prior to its implementation.
- Determine your most valuable metrics. There are dozens (or more) metrics you could track, but don’t fall into the trap of emphasizing quantity over quality. The metrics your company prioritizes may align with common industry metrics, but there’s no one-size-fits-all approach. Align your metrics with business objectives to ensure that you’re tracking what matters.
- Use segmentation to your advantage. It’s often beneficial to analyze database marketing metrics by segment. While overall metrics provide a big-picture view of the health of your company, understanding how certain segments (such as new customers, customers of certain product or service lines, etc.) perform against the big picture can offer insights into the unique needs of customer groups that don’t match the standard customer persona.
- Practice good data hygiene. Regularly monitor your database for data duplication, out-of-date and inaccurate data to ensure the accuracy of your metrics and avoid costly errors arising from bad data.
Database marketing metrics offer a plethora of insights into both performance and opportunities, but knowing how to leverage your metrics to your advantage is the key to success.
How is your company leveraging database marketing metrics to improve performance?