THE ROLE OF DATABASE MARKETING IN THE OPERATIONALIZATION OF THE SERVICES RELATIONSHIP MARKETING

Professor PhD Luigi DUMITRESCU Lucian Blaga University of Sibiu Assistant Mircea FUCIU Romanian-German University of Sibiu

Abstract: The relationship marketing aims the construction of a durable relation between the enterprise and the final client, identified at an individual level. The particular part of the relationship marketing has two main concepts: individuality and the relation. This paper presents the concepts of relationship marketing, database marketing and geomarketing. We present the importance of implementing a marketing database in a service providing enterprise and its implications on one hand for the client and on the other hand for the enterprise. The paper point out the marketing database instruments and the advantages for the elements of the marketing mix. The implementation of a marketing database will aid the enterprise to better target and attract the client, to transform them into loyal consumers and in the same time it can help refresh the image of the enterprise.

Keywords: relationship marketing, one-to-one marketing, customer relationship management, database marketing

Introduction unitary marketing to exist at the level of The marketing of services is today the service providing enterprises. In this a well elaborated concept, which must concept, the three forms of marking have an important place in minds of the contribute to the valorization of the managers from the service providing enterprise’s image, to the enterprises. The marketing of services transformation of the client into a loyal aims towards crating an excellent one and to the ensuring of an efficient service, ensuring the synergy of the communication. strategy and of the execution. The external marketing has The complexity of the factors that undergone the most spectacular condition the providing of a service (the transformation in the case of the organizational system, the environment, services providing enterprises. It has the providing staff, client etc.) and the passed from the stage of marketing as a interdependency between them have transaction to the stage of marketing as lead to three service marketing forms: a relationship (Virgil Balaure, 2004). the external marketing, the external The development of the relationship marketing and the interactive marketing marketing has forced the services (the provider-client relationship providing enterprises to develop an marketing). This is pointed out by Philip efficient management for their relations Kotler when he refers to the concept of with the clients, which is based on holistic marketing. relevant and permanently up to date Considering the three marketing database marketing. forms, Frank Cespedes (1995) considers that it is necessary for a The role of database marketing is important for: (a) using the marketing in the services collected information from each contact relationship marketing with the client (visit, phone call, web, Following the concept of Stan mailing, etc); (b) establishing more and Rapp and Tom Collins, the relationship more complex types of target groups marketing is a maxi – marketing which (clients, prospectors); (c) the definition has as a main purpose the sales of the magic moments (the most maximization and creating a long term sensitive moments for the client) of the relationship by selecting, contacting, relationship with the client (the first activating and holding on to the order, the complaint, providing the consumers and to the best clients of service); (d) the submission of the best the service providing enterprise. The product / service in the best moment need for creating a personal relationship and for the best client. with the clients has imposed the one-to- In order to ensure the usage of a one marketing concept, which is based efficient CRM, a marketing data base on the following principles: up to date must contain more types of information: database, a dialog with each client, nominal variables (name, surname), differentiating the clients according to coordinates (address, phone number, e- needs and values, customized services mail), socio-demographical data (age, (Luigi Dumitrescu, 2009). income, marital status), specificall data Based on a customer relationship (in case of B2B), socio-graphical data management (CRM), whose heart is the (region, county, place, types of habitat), marketing database, the relationship behavioral data (hobbies, fields of marketing aims towards transforms the interest), relationship data (contacts, clients into a loyal one as well as history of the sent messages), attracting new ones. A strategy of the acquisition behavior (payment options, CRM must be based on modern the nature of the acquisition, the information and communication acquired products), data obtained from technologies. The data and the the data mining process (client profile, information about the clients must be scoring, segmentation), subjective stored in databases, which can be information (the level of interest with collected using data mining techniques regard to the supply), etc. (Claeyssen, with the purpose of revealing important et all., 2009, p. 112). information. With the help of these All the information necessary for information the service providing marketing database is collected by enterprise can elaborate marketing and traditional methods as well as by on line sales strategies and policies which are methods. From this point of view we aimed towards individual clients. embrace the opinion of Yan Claeyssen, Taking into account the large by which there can be pointed out number of information, which the several new ways of determining the relationship marketing uses them in all size of a marketing database the stages of the decision making (Claeyssen, et all., 2009, p. 116) – process, the marketing database figure 1. becomes vital in a marketing information system. The database

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Collecting physical and e-mail addresses

from the on line orders made via the commercial site

Collecting e-mail Registering the from the web site; orders from the store; Acquisitions from Acquisitions from the the web site; E-mail store; Phone prospecting files; contacts; Tracking the e-mail Questionnaires with companies regard to quality send by the post

Wrong e-mail addresses, Wrong physical addresses

Figure 1. The Diagram of supplying a multi-channel marketing database

The existence of a complex place for all the information collected, marketing database generates more hence necessary and relevant for and more possible usages: the marketing. The database marketing is evaluation of the commercial pressure, far from being a static receiver; the data segmentation, dashboard, and lots for are not just stored and recorded but the e-mailing companies, network sorted, analyzed and combined. consumer behavior, on line consumer From this perspective, we share behavior. the point of view of Yan Claeyssen, A marketing database must be (Claeyssen, et all., 2009, p. 111), permanently maintained in a operative according to whom a marketing status by creating systematical database must evaluate in accordance operations, like the deletion of the to the request and the needs of the content that is doubled in the different providing organizations. A database files, the deletion of the content that is must be a flexible one (to accept new doubled in the same files and the parameters) but it must be easily suppression of al the useless data the accessed and used. The second database can not use them. mission of the database marketing is to The main objective of the database ensure the free usage of the data for the marketing is to generate the biggest marketing needs. The obligation of the profit by using the marketing and the marketing departments is to use the sales with regard to the client (Lebon, data in order to sell more and better, for Laethem, 2003, p. 156). Considering the transformation of the client into a the expansion of the relationship loyal consumer at the best moment, marketing, the marketing database with the best service, in order to invent becomes the decisive mean for taking new segments according to the the marketing decisions. These constant evolutions. Database decisions can be on one hand strategic marketing has two main instruments: (a) ones and on the other hand they can be a logistic instrument – a database for tactical ones. The role of the database clients; (b) a decision making instrument marketing is presented in figure 2. – a statistical database (table no. 1). The first mission of the database marketing is to become the storage

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Storing the Determining Extracting the Helps the Measuring the important data the targets direct sales force marketing for marketing marketing files campaigns results

The Loyalty programs: appropriation - revalorization; of products / - mixed sales. services

The calculation of the Behavioral segmentation the future financial flows client’s profile DATABASE

MARKETING Collecting and Analyzing the reporting the data interdependences between services

Calculating the return Optimization of: - direct marketing; price for: - acquisition costs. - network - marketing allocation

Sales promotion Marketing plans triggered Enrichment by external sources: logistics: by events linked to the - borne interactive; client’s life or by the life - business to business database; - geodemographics - individualization of the cycle of the service loyalty campaigns.

Source: Adaptation after A. Michaux – Le marketing de bases des donees, Eyrolles, 1993 Figure 2. The role of database marketing

Table 1 The two database marketing instruments Logistical Instrument – client’s database Decision making instrument - statistical database The daily usage: data extraction, managing the Punctual usage: specific requests, marketing and commercial actions. types and profile research, specific research with the mixing of other files in order take a marketing decision. The filling in of the new data is done The filling in of the new data is systematically: - through databases; - through occasional, for specific demarche. localizing external files; - through the integration of the data obtained by client research. The database update is made daily, weekly or The database update is made monthly: - for developing a commercial occasionally relationship with the client; - the data resulted from the marketing actions. The database is seen by many users: - marketing teams and managers; - sales networks; - sales departments. Managing the personal data is mandatory in the Managing the personal data is not communication campaigns and other marketing mandatory; these have a specific a actions. unique usage. 18

With regard to the added value of evaluated by the advantages the database marketing, this is presented in table no. 2.

Table 2 The advantages of database marketing for the marketing mix The marketing mix Database advantages Analyzing the services package / products range Complementary or cannibalism The sales evolution by clients segments or by geographical areas The product Analysis of the satisfaction or quality criteria The detection of the preferences of the products/ services Detecting the new needs for products/ services Analysis of the client’s life cycle The calculus of the client’s value all along its life cycle The calculus of the average attraction cost The Price The evolution of the prices and of the sales per product / service The calculus of the acquisition / retention costs of a prospector and a client The analysis of the distribution channel Analysis of the clients segments for each The Placement / distribution channel distribution The optimization of the commercial and marketing actions The management of the addresses and of the files in relationship marketing Measuring the results The Promotion / Managing the relationship marketing communication campaigns and of direct marketing The creation of clients lists based on well defined criteria

The relationship marketing by the client’s relation with the service represents on one hand all the providing enterprise; (b) the exploitation marketing actions between the of all the magic moments that individual and the enterprise and, on the accompanies the client’s life cycle. other hand, all the marketing actions These appreciations lead to an (strategic and operational) oriented interesting conclusion: there is no towards the client (listening, relationship marketing without a segmentation, individualized approach). marketing database. This is highlighted From this point of view, the objective of by Dominique Mouton (Mouton and the relationship marketing is to increase Paris, 2009, p. 30) which considers that of the client’s capital value. In the marketing database enriches the consequence, the relationship relationship marketing upstream (the marketing is formed of: (a) the research supply, establishing the price) as well as and the usage of all the data connected downstream (choosing the middleman). 19 The added value of database the collecting of client information, the marketing to the development of preferred contact channel, the acquired relationship marketing reflects the best service, or the frequency and evolution in the client’s life cycle analysis. From of the relation (Lebon, Laethem. 2003, the moment when an individual, a client, p. 161). or a prospector, has an interest for the The researches undertaken enterprise, the marketing seeks to sustain Philip Kotler’s Opinion (Kotler, capture, meaning to understand him, to Keller, 2009, p. 246) according to hum better know him, in order to give him the the limitations of the marketing best offer at the best time. Furthermore, researches reflect the difficulties faced the marketing seeks to discover and by the traditional segmentation of the even to anticipate what are his desires market as well as the very fast evolution and future expectations. of the needs and of the consumers The marketing seeks to behavior have encouraged the industrialize the one-to-one, meaning to companies (including the ones form the individualize the relations with the field of services) to go towards a clients. For this, he needs a deep “database marketing”. This concept is differentiation of the client’s profiles. In defined as “the process of creating, order to determine the profitable offers maintaining and using a client database for each type of clients and to prospect and of other databases with the purpose the market, the relationship marketing of contacting te clients, of closing needs a complete a permanently commercial transactions and of updated database. developing relations with clients.” In the relation that is established The implications of database between the enterprise and the client, marketing on the client’s life cycle are the database allows the registration and presented in table no. 3.

Table 3 The implications of database marketing on the client’s life cycle Life cycle moments Using database marketing Sorting by contact channels: commercial visits, web, phone, fax Searching the information Sorting by the type of requested information: price, complementary services Sorting by the frequency of the demand Estimation request Improving the data from the client’s file The client’s file update First order Validating the first acquisition typology Measuring the client’s satisfaction Delivery Following the difference (delay) between the order and the delivery Sorting the types of rebate, delay of payment Billing Identifying the bad payers The client’s file update A new order Validating the client’s typology The current turnover analysis or the potential one Following the services quality level Complaints The cost’s insatisfaction analysis Enriching the client’s file Attracting a new client Validating the new client’s typology The appearance of the client’s The cost’s regret analysis regret

20 An efficient marketing database discovers a disturbing factor during the contributes to the valorization of the providing / consumption of the service; commercial actions, at the integration of the (d) the client receives an interesting client’s satisfaction in the continuous offer from the competition. improvement process and at the The implementation of a identification of the client’s magic moments. professional database is a desirable With regard to the valorization of action for the service providing the commercial actions, the database enterprise. The interactive actions of the can be enriched with commercial marketing, the dynamic and relatively information about lost businesses and simple character of the analysis, the won businesses. These information permanent adjustment to ever-changing allow a better understanding of the link market, makes us to appreciate that the between the provided service, the implementation process of a database relation with the client, etc. The most assumes the fallowing of several used commercial informations are: (a) stages. This is sustained by Philip lost and won businesses; (b) the client’s Kotler ho appreciates that the decision potential for acquisitions; the positioning of creating a marketing database is of the service providing enterprise with firstly the identification of the moment in regard with the competition; (c) the which this decision is a proper client’s motivation for buying; (d) investment for the company (Kotler, barriers before the acquisition decision; 2006, p. 135). The stagers are (e) the trends in this sector. presented in figure 3. The services quality measuring From the analysis of figure 3 we must pass through the client’s can see that a database can be satisfaction study with regard to the operational from the 4th stage and can provided services. The integration of the be finalized in 6 to 18 months. In the 9th information of the client’s satisfaction stage, we can obtain a commercial level in the marketing databases allows database, therefore covering 80% of the the analysis of the products / services marketing needs. The database evolution at a qualitative level. The most generates incomes from the first applied used reasons for the client’s satisfaction marketing actions. The resulted income are: (a) the personalized commercial from the marketing database includes relation; (b) the delivery deadline; (c) all the incomes generated by the the technical quality of the service; (d) marketing programmers that have added services; (e) the quality of the benefited from the analysis of this received information and (f) previous database. From the association of the information. database marketing with the geography, a More magical moments marks the new concept has appeared: client’s life cycle all along his relation geomarketing. The simplified version of with the service providing enterprise. geomarketing can be presented as Some have a special importance for the fallows: tell me where you live, so I can client. There is the moments when the tell you who you are and what you buy. client is more sensitive about a The geomarketing has appeared from the enterprise and who can determine a need of the enterprises to find an answer stronger loyalty or on the contrary a to certain questions, which the disappointment. The informations about globalization places in front of them: (a) the magical moments must be where are the best potential clients for a integrated in the marketing database. new product / service? (b) where can a The most important magical moments of new selling / providing space are placed? the client’s appear when: (a) the client (c) how can the commercial attraction shows its satisfaction; (b) the client area be defined and animated? shows its insatisfaction; (c) the client

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1 2 3

Establishing Determining Establishing the the the content specification objectives of the conditions for the

database initial selection

4 6 5 Defining a Carring out Creating a marketing the pilot pilot database policy for study database

7 8 9 Implementin Implementing Defining a g the update the database commercial database

Stages 1-3: 1 to 2 months 10 Stage 4: 4 to 6 weeks Enriching the Stage 5: 1 month database Stages 6-9: 6 to 18 months

Figure 3. The stages of implementing a database

In front of a strong competition, a The development of geomarketing is more and more difficult consumer linked to the micro informatics and behavior analysis, the common sense databases that allow the stock piling of or a study are not enough to find exact statistical data. The construction of a answers to these questions. Geographical Information System (GIS) is The geomarketing allows a new based on the concept of geomarketing, approach, which brings more finesse allowing the obtained internal and external and efficiency in the analysis, by data to be properly managed. It will allow combining the geographic database the editing of geographical maps which with other information, like, for example, show commercial phenomenon in time the behavioral ones. The whole and space. The geographical information ensemble is exploited by informatics system (GIS) can be represented in a means and represented in a very simple form, which is presented in figure 4. accessible way by visualization on a map.

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Internal geo- External data encoded data

Analysis and data processing

Stocking the elaborated data

Marketing and

commercial actions

Figure 4. The Geographical Information System (GIS)

The components of the GIS are: By integrating the prospectors and the (a) internal geo-encoded data, often the socio-demographical data we will be enterprise has a large number of usable able to point out the local potential and information (clients, prospectors, will consequently trigger relationship competition, distribution channels); (b) marketing actions. external data, the enterprise will add The geomarketing can also be a economical data, socio-demographical precious help for increase the efficiency data, new infrastructure data, mobility of a communication campaign. By data, personnel flow data, competition presenting with precision the potential data, consumer behavior data; (c) clients, the geomarketing allows the analysis and data processing, after service providing enterprises to offer acquiring the internal and external data personalized services, raising in the a selection of the most relevant same time the quality of the contacts. information must be made. The data The internet and the extranet will processing program will allow the also allow the development of pointing out of the best types of geomarketing in two directions: (a) the information that can be represented on first, expresses its usage for the a map; (d) storing the data, the data is underlining of the marketing strategies; stored in a database. The database in (b) the second, expresses the usage of elaborated to point out every target unit geomarketing at a operational level. or dominant profile of the area; (e) marketing and commercial actions, from Conclusions the database, the marketing managers In the field of services, the or the sales force personnel will be able marketing concept, in its most advanced to obtain specific information linked to form – client orientation – is the actions that they want to develop. incorporated in the providing enterprise The geomarketing allows the activities, by actions of a great diversity visualization, on a map, of the and complexity which are in an geographical representation of the interdependency relationship. The clients with their density on an area, finality of these actions is given by the district, street, dividing their fundamental objective of every service consumption by products or services. providing enterprise: maximizing the 23 profit, in the conditions of satisfying ad providing company, the creation of surpassing the consumers / users client-prospecting files and the creation expectations by quality, services and of history databases which are attached value. The marketing actions are to the others. organized in order to aim toward the In consequence we share the elaboration of marketing tools and to opinion of Yan Claeyssen (Claeyseen develop them in a certain succession, et. All, 2009, p. 111) which considers duration and order which is forced by that a marketing database is a “box with numerous restrictions of a a living memory”. A very important methodological level. decision with regard to the usage of an In this context we consider that a effecting marketing database is, marketing database dose not exclude according to Philip Kotler (Kotler and the market research. These two Keller, 2008, p.251), the way the service methods are complementary and it is providing company resolves the possible to create a combination following four problems: (1) the between them which is Paul Gamble investment for creating and maintaining call it “fusing the data” (Paul Gamble et. a marketing database can be very high; all. 2008, pg. 167). This is obvious if (2) the considerable difficulty in “forcing” take into consideration the fact that a the employees to focus on the clients; marketing database gives information (3) the possibility that the hypotheses of about what the clients buy, how much the marketing database will sometimes do they spend, how often do they buy, not be verified; (4) the possibility that etc., while the marketing research gives some clients do not agree with the information about what motivates the collecting of personal information about clients. them. Having a 3D structure the marketing database allows, the service

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