Successful database marketing has always been based on communications. Why spend millions on a database unless you use it to send personal messages to your customers? But that was tough before the Internet. Personal letters were expensive, and retention-building outbound phone calls were out of reach for most marketers. And now?

For example, a major brick and mortar retailer — which does not sell direct — worked with Quris to accumulate 220,000 customers who asked for e-mail newsletters about new movies. Quris decided on a six-month test program, setting aside a random control group of 16,000 who got no e-mails, even thought they asked for them. Customers have to be registered to buy, so Quris had a very good way to track the results of their efforts.

Quris began the program with an opt-out message to be sure no one would think the messages were spam. From this it created an opt-in test universe of 170,000. Half got e-mails and half got e-mails with coupons for buy one, get one free. The results were fantastic.

Overall, during the six months, those who got the e-mails bought 28% more than those who did not. Those who got coupons responded better than those who did not. Previously active customers became more active than they had been, and many inactive customers were reactivated.

Then there’s the case of Miles Kimball, which has been sending out catalogs since 1935. Two years ago, that firm tied an e-mail test to its catalog mailings, selecting 40,000 customers who had used its Web site to order items from its paper catalog. They were divided into two exactly identical groups: 20,000 got e-mails in conjunction with three different catalogs over a two-month period. The other 20,000 got only the three catalogs. Those who got the e-mails bought significantly more than those who received only the catalogs.

For years, airlines have mailed monthly statements showing how many miles flyers have accumulated. With tens of millions signed up, the statement costs have become a serious concern.

Many are now sending statements by e-mail. The savings amount to about 80 cents per member per month, which means some hundreds of millions of dollars annually

My e-mail from American Airlines this week begins: “Arthur Hughes, here is your personal edition of AAirmail.” It features information about flights from Fort Lauderdale, which is where I live. This newsletter is a great example of relationship marketing.

E-mail newsletters also make it possible to expand your database by enlisting customers as recruiters. More and more e-zines are asking customers to forward the e-mail to others who might want to read it, and they provide a way of doing it. That would be very difficult to achieve with direct mail or a paper newsletter.

Web technology also fosters this type of communication.

The beauty of a microsite is that it is very inexpensive to set up, and does not involve all the committees and expense involved in making changes to a company’s main Web site. Microsites permit the text of the e-mail newsletters to be very short, which gets more of them opened and read. At microsites, the customer can do whatever the e-mail directed them there for: register, update their profile, buy a product, find a dealer, or download a coupon. Any data entered into a microsite goes directly into a database. The beauty of this type of e-mail is that you can learn within a few hours how many people received your message, read it, clicked on items of interest or downloaded the information. This is real linking of e-mails with database marketing.

The Internet and e-mail are the best things that have happened to database marketing since they invented relational databases. E-mail newsletters have helped make true relationship marketing possible.

Arthur Middleton Hughes is Vice President/Solutions Architect at KnowledgeBase Marketing (www.kbm1.com). He is the author of The Customer Loyalty Solution (McGraw Hill, 2003).

Successful database marketing has always been based on communications. Why spend millions on a database unless you use it to send personal messages to your customers? But that was tough before the Internet. Personal letters were expensive, and retention-building outbound phone calls were out of reach for most marketers. And now?

For example, a major brick and mortar retailer — which does not sell direct — worked with Quris to accumulate 220,000 customers who asked for e-mail newsletters about new movies. Quris decided on a six-month test program, setting aside a random control group of 16,000 who got no e-mails, even thought they asked for them. Customers have to be registered to buy, so Quris had a very good way to track the results of their efforts.

Quris began the program with an opt-out message to be sure no one would think the messages were spam. From this it created an opt-in test universe of 170,000. Half got e-mails and half got e-mails with coupons for buy one, get one free. The results were fantastic.

Overall, during the six months, those who got the e-mails bought 28% more than those who did not. Those who got coupons responded better than those who did not. Previously active customers became more active than they had been, and many inactive customers were reactivated.

Then there’s the case of Miles Kimball, which has been sending out catalogs since 1935. Two years ago, that firm tied an e-mail test to its catalog mailings, selecting 40,000 customers who had used its Web site to order items from its paper catalog. They were divided into two exactly identical groups: 20,000 got e-mails in conjunction with three different catalogs over a two-month period. The other 20,000 got only the three catalogs. Those who got the e-mails bought significantly more than those who received only the catalogs.

For years, airlines have mailed monthly statements showing how many miles flyers have accumulated. With tens of millions signed up, the statement costs have become a serious concern.

Many are now sending statements by e-mail. The savings amount to about 80 cents per member per month, which means some hundreds of millions of dollars annually

My e-mail from American Airlines this week begins: “Arthur Hughes, here is your personal edition of AAirmail.” It features information about flights from Fort Lauderdale, which is where I live. This newsletter is a great example of relationship marketing.

E-mail newsletters also make it possible to expand your database by enlisting customers as recruiters. More and more e-zines are asking customers to forward the e-mail to others who might want to read it, and they provide a way of doing it. That would be very difficult to achieve with direct mail or a paper newsletter.

Web technology also fosters this type of communication.

The beauty of a microsite is that it is very inexpensive to set up, and does not involve all the committees and expense involved in making changes to a company’s main Web site. Microsites permit the text of the e-mail newsletters to be very short, which gets more of them opened and read. At microsites, the customer can do whatever the e-mail directed them there for: register, update their profile, buy a product, find a dealer, or download a coupon. Any data entered into a microsite goes directly into a database. The beauty of this type of e-mail is that you can learn within a few hours how many people received your message, read it, clicked on items of interest or downloaded the information. This is real linking of e-mails with database marketing.

The Internet and e-mail are the best things that have happened to database marketing since they invented relational databases. E-mail newsletters have helped make true relationship marketing possible.

Arthur Middleton Hughes is Vice President/Solutions Architect at KnowledgeBase Marketing (www.kbm1.com). He is the author of The Customer Loyalty Solution (McGraw Hill, 2003).