The Power of Databases

In the mid-twentieth century, databases really didn’t matter much. Advertising was conducted through mass-market mediums like television and radio. The tools for target marketing were not available like they are today. Today, even small businesses can take advantage of a multitude of tactics aimed at specific market segments. This ability stems from one powerful tool—the database.

The Merriam-Webster dictionary defines a database as a usually large collection of data organized especially for rapid search and retrieval (as by a computer). This is a basic definition, but let’s explore what a database is and what makes it so powerful. As the dictionary definition says, it is a collection of data. For example, it can be a collection of consumers with a demographic profile. In addition to name, phone and address, it can contain marital status, household income, education level and more. A company can analyze this data to gain insight into their customers. For example, they might discover that their customer base is mostly made up of female consumers with a 4-year college degree with a household income of $75,000 - $100,000 a year. With this insight, efforts can be made to deliver marketing messages to consumers that fit this profile. The logic being that consumers that fall into this profile will have a high propensity to buy the company’s products or services. So, by allocating marketing resources (time and money) to this segment, it should generate the highest ROI.

Databases can be extremely complex, but they can be fairly simple as well. Technology has allowed businesses of all sizes to utilize tools to build and maintain databases. The web is increasingly using databases to deliver content in a dynamic manner, creating a more functional and rich user experience. In addition, online databases are aiding in the effort to collect data on consumers. The website MySpace.com recently sold for hundreds of millions of dollars. It wasn’t the site itself that was so valuable, it was the database of users (mostly teenagers) that drove the selling price. Data in and of itself is valuable, but the ability to mine the data and use it to aid in marketing efforts is what makes it so powerful, empowering an organization to generate exponential sales.

In order to take advantage of database technology, you need a database application. For small businesses, programs such as Microsoft Access and Filemaker Pro are adequate. However, if you want to employ database technology on your website, you should employ a more powerful solution such as SQL or MySQL. At a minimum, you should have a customer database so you can manage your customer relationships. From there, you want to grow your database into prospects. Effective methods for building databases are contests, information requests through online forms, and trading value-added content for customer information.

If you have not actively built a database, start now. Organizations are becoming more sophisticated with utilizing database technology, so don’t get left behind. Use the web and other interactive media to build and utilize your databases. If the job is too complex to handle internally, contact an agency with experience building and deploying online databases. Start now, and discover the value you can create for your organization.

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