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 How a Relational Database Helps Marketers
   By Arthur Middleton Hughes

To do database marketing properly, you want to collect data on your customers, and use that data to measure their lifetime value and to communicate with them. Here’s how to use a relational database to your advantage.

The messages can be personalized because you have stored information properly so that the database can enable you to have meaningful dialog with hundreds of thousands of customers, just as the old time corner grocers had with their individual customers.

Database marketing today is based on relational databases maintained on servers (or in the case of very small databases, on PCs.). Databases used to be stored on mainframes, but these are not acceptable for modern conditions. To get started designing a relational database, most companies use a needs assessment, which is a two day exercise interviewing all concerned: marketers, sales, management, IT, and vendors. The goal is to determine what the marketing program will be for the next year, and the data available and necessary to support that program. After the two days, the database design team spends the next 28 days creating the database structure.

A relational database consists of fields, tables, and records. A field is the smallest structure (the atom) of the relational database. Examples are: A last name, a date, a dollar amount, a product number. There may be a hundred fields in a database. Properly designed fields have only one value: Wrong: Arthur Hughes. Right: two fields 1) First Name 2) Last Name. They should not contain data that changes or calculated values: Wrong: Age. Right: Date of Birth.
Fields are grouped into tables. A table is the chief structure in a relational database. A table always represents a single specific subject which can be either an object or an event. Object example: Customers. Event Example: Orders.

Keys are special fields. Every table contains a primary key field and may have one or more foreign key fields. A primary key field for the customers table would be the Customer Number. A foreign key field for the same table would be an Order Number field (which is the primary key in the orders table). The other fields in the customer table would be data fields, such as name, street, city, state, zip, etc.

Records are the structures in a table that represent unique instances of the subject of the table. An example is Arthur Hughes, one of the records in the customers table. A purchase that Arthur Hughes made on August 12th could be an example of a record in the orders table. Relationships are connections established between pairs of tables.

Why is all this technical detail important to database marketers? Because, in most cases today, their databases are not designed properly. They are old fashioned mainframe flat files. The update process is very slow. Adding or changing data in a flat file is a difficult process. What are the advantages of a relational format to a marketer? A modern relational database:

• Is easily to update – either in real time, or in monthly batches
• Permits ad hoc drill down queries and reports
• Allows you to store an unlimited amount of data about any customer
• Permits you to add fields without redoing the whole database
• Makes it easy to modify the data and to retrieve information
• Makes it easy to develop and carry out personalized customer communications
• Permits the inclusion of business rules in the database design

---Source: Arthur Middleton Hughes is vice president/solutions architect at KnowledgeBase Marketing. His website is dbmarketing.com. Contact Arthur at Arthur.hughes@kbm1.com or at (954) 767-4558.

 
Melissa Data


 
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