This session will consider how to create a customer database which can be used to store information which can be accessed by members of your organisation. If we gather information about specific traits or attributes of our customers, then we can look similarities and satisfy the needs of large groups of customers. Such information should be gathered at every touch point between customer and business, and all key employees should have access to the database to input or access information for marketing decision-making.
The data contained in the database will build a pattern of how customers purchase. By understanding purchase habits, a company can increase sales of products and services. So returning to our bank example, if a junior saver takes out a student loan, then in three or four years’ time the bank will perhaps lend them money for their first flat or car as the student becomes an employee. With a database that contains many thousands of customers, the marketer can start to build a picture of why consumers purchase products of particular value, at particular point in their lives.
In other lessons, Marketing Teacher has introduced to the marketing mix, product, price, place, process, people, physical evidence and promotion. There is a connection between a customer database and the marketing mix. Since we now have more information about a customer over long periods of time we can change and adapt our marketing mix so that we are more effective in marketing as a whole. A bank might swap to pay per click advertising if it notices that more people are using the Internet for communication as opposed to traditional direct marketing via the mail.
As the customer database grows and consumers are retained, there is now quite an elaborate and developed picture of a consumer’s behaviour. The marketer can now begin to identify the factors that influence consumer’s decision-making processes. Does the consumer buy more products when there is an incentive? Does the consumer buy a more services during certain seasons e.g. Christmas? Do consumers behave on their own or in groups? Again this information can be used to alter the marketing mix in order to meet the needs and wants our customers.
An example of a very detailed customer database belongs to Amazon.com. The database has sections on your orders, your preferred method of payment, your personal account settings, and also there is an opportunity for personalisation. This is an example of a complex Customer Relationship Management (CRM) system, and we are building these lessons to help us understand CRM. A robust initial starting point is a basic, typical database which is likely to contain the following:
- your name
- your address and other contact details, such as e-mail addresses and telephone numbers
- your occupation, age, education, and other profile information
- your order history which shows what you bought and when, how much money you spent and other relevant purchase history
- how and when we responded to promotional codes, coupons, and other incentives
What does this information give the marketer?
The information generated by your customer database is of great value to the marketer. The business itself as it expands will need to make sure that the database is clean i.e. that any out of date or untargeted data is removed, that legal requirements are met (such as the data protection act in the UK), and that IT specialists are employed to make sure the data is secure and that the latest software is used to analyse it. The database is the starting point in managing the customer relationship, since you use the information to sell your client more products and services that they need and want. This in itself would generate more data, and the richness of the information means that you can retain your customer and sell them products over a long period of time. The value of the database is that it starts this relationship. Of course, the database helps you identify customer needs and wants.
Let’s use the example of bank, which recruits customers as they start work or become students, or even before with junior bank accounts. By watching the behaviour of a new customer, the banks can sell other products such as mortgages, car loans or pensions.