SIGNIFICANCE OF
DATABASE MARKETING IN SMALL SCALE BUSINESSES
Database marketing is the combination of capturing and
utilizing valuable customer data to gain insights for generating relevant
marketing strategies. The types of data a business can utilize are
1) Mobile Number - For interacting directly a customer
2) Email - For sending relevant promotions
3) Location - For calculating the frequency of visit based
on distance
4) Preferences - For stocking and repurchase purposes
5) Gender - For likes and dislikes
6) Spending pattern - For stocking at the right time to
avoid leftover inventory
These are just few factors which can help a business
cultivate a marketing strategy that suits the interest of their buyers. We are
very well aware of corporate giants like Amazon, AirBnb, Uber and Costco who
impeccably used customer data to their benefit. On top of that these companies
are earning in billions which is quite remarkable.
Now one would say that these companies are worth millions of
dollars, these are giants and they have a lot of network all around. But one
does not think about the crucial aspect here which is how these companies
managed this? The answer is customer data which is collected and analyzed
regularly for forecasting and implementing business strategies for a business.
The major portion of this system is that it was never built in a day. It took
Amazon more than 15 years to understand and create e sustainable business model
which depended on valuable customer data. Amazon today is known for its large
marketplace which included items from the words "A to Z" but it was
originally created as a online bookstore. Unless and until a company knows what
a customer really wants they cannot build a thriving business. It is the same
for small businesses, for a business to grow it is essential to start small and
begin collecting customer data to tactfully design a eminent business model.
One would argue that are multiple disadvantages of database
marketing for a business such as
1) Time consuming - Data collection requires a decent amount
of time
2) Varied likes and interests of a number of customers
3) If data is collected without the approval of customers it
could lead to privacy violations
4) One needs to learn the appropriate software for data
analytics
5) Customers will have authority over disbursement of their
personal data
Despite the above mentioned cons an individual or a company
does have the opportunity to apprehend the basics over a reasonable amount of
time. Popular websites like Google, YouTube and Facebook provide us with
tremendous resources which are free to use. Overall, if a business big or small
is able to understand their customer base through data, they will be able to
interact with them using database marketing and gain a strong foothold in their
business. Interacting with a customer and engaging with customers using data
analysis and content creation will prove to be a game changer.
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