Cover Your Bases

Mention database marketing, and many entrepreneurs will shoot you a "been there, done that" look. In fact, even the newest business owners have likely taken a stab at sending a mailing or two. However, advances in computer software, increased understanding of relationship marketing and a marketplace demanding more personalized attention than ever have combined to create an environment where new and improved database marketing deserves a second look.

In a nutshell, database marketing is simply using the information in a database to more effectively reach out to your customers. Although the term is sometimes used interchangeably with "direct mail," database marketing is actually much more far-reaching.

Just a few years ago, the extent of most in-house databases and software was a random capture of names and addresses.

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Now, off-the-shelf software packages, such as ACT! 2000 (Symantec, $200 street) and GoldMine 5.0 (Gold-Mine Software Corp., $200 street), make it easy to capture and organize vast amounts of information about your customers. That data allows you to communicate with your customers via mail, fax and telephone. But such information also allows you to develop a model of your typical customer to better aim your advertising and marketing dollars, create interactive online services and promotions, predict trends, cross-sell, and build stronger relationships with clients and client prospects.

"Maintaining a database of your customers is essential not only for direct outreach, but to examine who your customers are and how to best reach them," says Paul Chachko, senior vice president of New York City-based 24/7 Mail, a cutting-edge direct and database marketing company. "It's the power to say, `This is my market. This is my consumer. These are the media I should use to reach them.' "

Gwen Moran is Entrepreneur's "Fast Pitch" and "Marketing Smarts" columnist.

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