The distinction between direct and database marketing stems primarily from the attention paid to the analysis of data.
The "database" is usually name, address, and transaction history details from internal sales or delivery systems, or a bought-in compiled "list" from another organization, which has captured that information from its customers.
Fletcher, Wheeler and Wright (1991)[5] classified these issues into four main categories: Shaw and Stone (1988) noted that companies go through evolutionary phases in the developing their database marketing systems.
In smaller (and more homogeneous) databases, it will be difficult to justify on economic terms the investment required to differentiate messages.
As a result, database marketing has flourished in sectors, such as financial services, telecommunications, and retail, all of which have the ability to generate significant amounts of transaction data for millions of clients.
Companies may also acquire prospect data directly through the use of sweepstakes, contests, on-line registrations, and other lead generation activities.
One other complication is that B2B marketers in targeting teams or "accounts" and not individuals may produce many contacts from a single organization.
Van den Poel (2003)[6] gives an overview of the predictive performance of a large class of variables typically used in database-marketing modeling.
Other types of analysis include: As database marketing has grown, it has come under increased scrutiny from privacy advocates and government regulators.
In the United States, there are a variety of state and federal laws, including the Fair Credit Reporting Act, or FCRA (which regulates the gathering and use of credit data), the Health Insurance Portability and Accountability Act (HIPAA) (which regulates the gathering and use of consumer health data), and various programs that enable consumers to suppress their telephones numbers from telemarketing.
While the idea of storing customer data in electronic formats to use them for database-marketing purposes has been around for decades, the computer systems available today make it possible to gain a comprehensive history of client behavior on-screen while the business is transacting with each individual, producing thus real-time business intelligence for the company.
However, a combination of CRM, content management and business intelligence tools are making delivery of personalized information a reality.
Marketers trained in the use of these tools are able to carry out customer nurturing, which is a tactic that attempts to communicate with each individual in an organization at the right time, using the right information to meet that client's need to progress through the process of identifying a problem, learning options available to resolve it, selecting the right solution, and making the purchasing decision.