Database Marketing

1. Customer sends in coupon, fills out warranty, makes a credit card purchase, enters sweepstakes, makes 1-800 or 900 phone call, or has a baby and marketer takes data and feeds to computer where it's combined with information from public records (driver's license registrations, census data).

   

2. Using sophisticated statistical models (math), the computer merges different sets of data into a consolidated database.

3. The computer identifies a model consumer of a chosen product based on common characteristics of high-volume users, a process called profiling. Clusters of consumers who share those characteristics--interests, incomes, brand loyalties, for example--can then be targeted.

   

4. The data can be used in many ways. Marketers can use the information to tailor new products and ad messages to the "right" audience, to determine the values of coupons and who should get them, and to build relationships with customers (in one-to-one-speak, to "increase customer share").

5. Manufacturers share data with retailers. Cash register scanners provide reams of information about exactly what shoppers are buying at specific stores. Merged with the manufacturer's data, this intelligence helps to plan local promotional mailing, fine-tune shelf displays, and design store layouts.

   

6. More coupons, more sweepstakes, more data, more numbers crunching, the wheel in the sky keeps on turning.

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