CUSTOMIZATION AND SYNCRONIZATION BY THE USE OF DATABASE MARKETING IN RETAIL BANKING

Presented to :Prf. BK CHADDA

Presented by:Divya rai(12BSP0376)

DATABASE MARKETING
Database marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes.

There are two main types of marketing databases

1) Consumer databases: Consumer databases are primarily geared towards companies that sell to consumers, often abbreviated as [business-to-consumer] (B2C) 2) Business databases. Business marketing databases are often much more advanced in the information that they can provide. This is mainly because business databases aren't restricted by the same privacy laws as consumer databases.
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Customization and Synchronization an effective technique

Below are three trends that have contributed to the mass customization movement 1. Every Customer Is Their Own Market : Since the late '80s many consumers have desired products that meet their exact needs. No longer does "one size fit all." Customers expect it their way and are willing to pay for it. The heterogeneity of consumer needs has expanded and offers brands a tremendous opportunity. Frank Piller, one of the leading academic researchers asserts that mass customization is "profiting from exploiting heterogeneity across customers' needs."

2. Consumers Are More Expressive: Individuals have long expressed themselves through various forms of media such as the clothing they wear, the car they drive, and the food they eat. Recently, social media services such as Twitter, Facebook, and Food spotting have made it easier for people to effortlessly express themselves to their friends. 3. Customization Is the New Loyalty : Every brand wants a loyalty program. These programs increase consumer spending, retention and lifetime customer value. A meal cooked just for you, a Starbucks drink made just the way they like it, or the perfect fitting pair or jeans or dress shirt that fits your body type.
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Synchronization Of Information Also Play Important Role

Data synchronization is a service designed to share data between multiple devices while automatically updating and copying any changes back and forth between the devices. Data synchronization is important where multiple users are using and updating the same data sets in a database system. Example: Employees in the same firm may share the same customer data across various departments. The accounts department may use the database for invoicing and billing, as the sales team uses the same database, while the customer service department may simultaneously be updating customer information. Data synchronization is especially important where the various users are distributed across different geographical areas. Computer networks and the internet make it possible for companies to automatically synchronize changes to customer databases simultaneously from all the different locations or workstations.
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Evolution of Database Marketing Techniques

The growth of database marketing is driven by a number of environmental issues. Fletcher, Wheeler and Wright (1991) classified these issues into four main categories:
1. The Changing Role Of Direct Marketing The move to relationship marketing for competitive advantage. The decline in the effectiveness of traditional media. The overcrowding and myopia of existing sales channels. 2. Changing Cost Structures. The decline in electronic processing costs. The increase in marketing costs. 3. Changing Technology The advent of new methods of shopping and paying. The development of economical methods for differentiating customer communication. 4. Changing Economic Conditions The desire to measure the impact of marketing efforts. The fragmentation of consumer and business markets.
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Process of Database marketing in retail Banking

There are three basic steps to be taken for database marketing in Retail Marketing. They are : Collecting customer data Turning data into knowledge Developing strategies and tactics to modify behaviour Integrating Customer Profitability with the database Monthly Profitability Determination Customer Profitability Segmentation Behaviour Modification

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Recommendation
Marketing databases do not generate revenue by themselves. They must be used in an active program of profitability analysis, customization and synchronization of customer data, customer segmentation, and marketing tactics that build retention, loyalty, and increased sales. There are four key database marketing requirements which any successful project must achieve: Collect relevant and accurate data about their customers. This means the construction of a comprehensive Marketing Customer Information File (MCIF). Develop an accurate and credible system for determining the profitability of each customer, on a periodic basis, preferably at least monthly, using day to day inputs on interest rates and costs. Develop segmentation schemes that divide customers into useful and actionable segments based on profitability. Develop and implement tactics, based on these segments, which are used to modify the behaviour of employees and customers to increase sales, improve retention, lower costs and improve profits. If companies execute successfully all four steps, the payoff can be quite significant.
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Conclusion
Bankers are increasingly making use of database marketing to retain their customers and expand sales. The goals, which are not difficult to achieve, are: Retention: By helping customers to build equity in remaining with the bank, customers are less likely to drift away. Cross Sales: "Holes" in a customer's portfolio can be identified. The customer can be encouraged to plug the holes by pointing out that increased use of bank services can increase his equity without cost to him. Reduction in price sensitivity: One continuing goal of database marketing is to get customers to think about the value of the product and the service, and to forget about the price. Database marketing helps wonderfully in this objective, particularly in a banking situation in which service can be meaningful, and price competition is always a threat. Referrals: Word of mouth works well in financial services. If customers have an incentive to refer their friends and relatives, they will do so, as MCI has proved to the world.

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