How To Enhance The ROI of Database Marketing?

According to GDMA, 92.3% of businesses maintain databases to host information on customers and prospects.

Brands gather this data from event registrations, webinars, videos, cookies, and other tools. Let’s find out how you can enhance the ROI of the database marketing for your company.

What is Database Marketing?

Database management involves gathering data of customers to understand their behaviors. This customer behavior enables a brand to design strategies for offering solutions in its products and services.

Data collected from different metrics and software are measurable. These data serve as a measure to monitor and judge the success of a particular marketing campaign. Small firms cannot afford to invest in brand research, so database marketing is an affordable alternative.

Do you know Database Marketing can have multiple benefits for your brand?

Benefits of Database Marketing

Data a source for making informed decisions for future marketing plans to fulfill the brand objectives. Database marketing services has many other benefits like:-

1. Makes marketing communications targeted: An accurate, clean, and centralized database of customers can create accurate groups of customers using online or offline data. The grouping can be based on demographics like age, gender, location, or purchase history. Later, you can target these groups with different marketing strategies.
2. Improve customer relationship and loyalty: Analyzing the customer database will make you recognize loyal and consistent customers. So, you can separate them into a particular segment and employ distinct marketing strategies with a special appreciation of their loyalty. In addition, all these efforts improve customer relationships, increasing their second purchases with positive reviews.

For instance, A BlueVenn client planned to reward its loyal customers. For this, they used a single customer view and engaged with their loyal customers in their loyal program to reward the customers with discounts who gave them positive product reviews. The result is an increase in second purchases and customer retention.

1. Personalized customer experience: Customers prefer a personalized experience that boosts customer engagement. Using data for personalization implies that you can send communications to your customer as per their preferences giving a personalized customer experience.

Big firms like Facebook, Netflix, and Amazon segment their customers’ data by name, email, phone number, gender, date of birth, location, and interests. Consequently, companies like Facebook make personalized experiences for their users and marketing information.

1. Improved customer service: Database Marketing enables you to understand the needs and problems of the customers. In return, you can respond with beneficial engagements that fulfill the needs with a customer-centric approach. This will improve customer service that will turn them into regular customers.
2. Benefits marketing efficiency: Diving customer databases into different groups will ensure that the right person receives the merge, and you can curate a standard message relevant to the group. In addition, this fine targeting and direct marketing improves the marketing efficiency and is more affordable.

To avail of all these benefits, it is essential to get a good Return on Investment (ROI) which shall determine whether the marketing campaigns are bringing worth to your money or not. So, now let’s tell you how you can improve the ROI for your Database Marketing.

Tips to boost ROI of Database Marketing

1. Make the right objectives for the campaign: From the beginning of the database marketing campaign, it is important to set the right goals and clarify them.

For example, the goals can be about increasing sales, creating awareness, conducting customer surveys, among others. Also, you can align your business goals with database marketing campaigns.

1. Recognize the right KPI: After setting up the right objectives of your database marketing campaign, it is essential to recognize the accurate key performance indicators. The key performance indicators are the accurate indicator that you will have to measure to determine your campaign’s success.

It will be based upon your set goals and monitor the performance at different stages of marketing. Some common KPIs are Volume of leads generated, Net profit, Number of new purchases, Conversion rates, Average sales, etc.

1. Employ and ROI formula: There are different methods to calculate ROI that can become more complex as per your needs.

The main formula to calculate ROI is net profit cost of investment divided by the cost of investment.

For a wider approach, you can calculate the open rates, click-through rates, conversion rates, etc to determine the performance of the campaign.

ROI= (net profit cost of investment) / cost of investment

For example:

If you made 2000$ from a campaign that cost you 1000$, that’s a 100 percent ROI.

ROI= (2000$ – 1000$) / 1000

ROI= 1

This formula will help you calculate the financial return on your investment.

1. Experiment: Use your creativity and experiment to identify the right opportunities for understanding opportunities in database marketing. These valuable insights can help you design the right database marketing strategy.

In addition, it will let you know about customer behavior and response on different kinds of campaigns that you can use for making more informed decisions.

1. Increase your Universe: Recognize and connect with the right-profile potential customers. For this, you need to know about the right customer profile and total addressable market.

Then, based on the buyer persona, some users fit into your predefined criteria to recognize the ideal customers.

1. Increase the existing marketing share: It is significant to find the opportunities for micro growth within your existing accounts. It is quick, easy, and affordable to sell more to the existing customers rather than attracting new ones. You can expand your marketing share with existing customers and people already interested in your products.

Do you want to launch a successful Database Marketing Campaign?

Alpha Leads Tech is a leading company that improves your ROI for your Database Marketing campaigns. It helps you choose the right objectives, choose the precise KPI, employ the relevant ROI formula, increase customer retention, and improve your market share among existing customers.

In addition, it has a team of experts that strategize customized campaigns, track their performance, and ensure a good customer experience improving your marketing experience.

Frequently Asked Questions

(1). How to improve marketing ROI?

You can improve your marketing ROI by establishing accurate campaign goals, creating useful content for the target audience, employing predictive analysis, and outsourcing digital marketing.

(2). What is a good ROI for marketing?

ROI usually comes in a 5:1 ratio, with exceptional ROI being 10:1. However, anything below 2:1 is not considered profitable.

(3). How to know whether my ROI is good or not?

An annual 7% of ROI or more is a good ROI for investment stocks. But, of course, it’s an average figure, so some years it will be more, and in some years it might be less.

(4). Why is a digital return on investment difficult? Digital marketing gives all the tools for perfect tracking the ROI, but there can be limitations on how long we can track their behavior and users.