What Is a Customer Database?

Customer-related data is by far one of the most vital assets of every company. By collecting and managing data the right way, businesses can make more data-driven decisions and attain their goals faster. And, one of the most common ways to manage data is by using a customer database.

What is a customer database? Why does it matter? And how can you use it to your benefit? In this guide, the experts from LeadsForce will answer these and other questions to help you set your business up for success!

What is a customer database?

According to the general customer database definition, this term is used to define a collection of helpful information about the company’s existing and potential customers. There are two core reasons for creating and maintaining such a database:

1. To keep track of all clients and prospects of the company;
2. To make the company’s sales and marketing efforts more data-driven and result-oriented.

Customer Database Usage

Apart from the two core purposes specified above, there are many other uses of a customer database.

The first important use is strategic. Customer databases can be used to help companies identify accurate buyer personas, create customer journey maps, outline sales funnels, and track key accounts. The strategic use of such databases is possible as they provide businesses with an in-depth overview of their clients:

• Choices;
• Pain points;
• Factors affecting decision-making;
• Objections and factors distracting from closing a deal, etc.

And that’s not all!

Apart from bearing strategic value, customer databases can be used as roadmaps for interacting with clients. Namely, salespeople can use such databases to:

• Personalize messages, emails, and rewards;
• Shape accurate offers based on customers’ needs;
• Speed up the sales pipeline;
• Provide quicker and more effective support;
• Address every customer’s query faster, etc.

On top of that, carefully organized customer data helps businesses make better, more data-driven decisions and, thus, attain their sales goals faster and easier.

What Should Be Included in a Customer Database?

The structure and filling of a database depend on a variety of factors, including the specific needs and objectives of each particular firm, its products or services, the industry, and the type of customers it is trying to reach.

Typically, the types of data that should be included in a database are:

• Personal and contact details (i.e. full name, gender, age, phone number, email, etc.);
• Profession-related data (i.e. job title and shared contacts);
• Firmographics (if you are a B2B business), such as the firm a prospect or customer works in, its industry, number of employees, etc.;
• Date of the last contact (if any), and the details that were discussed;
• The source a particular lead came from and their scores from qualification;
• Orders made in the past, the amount of money spent, cancellations, etc.;
• Website visits history and engagements with a brand;
• Customer-specific details (e.g. birthday, pets, marital status, kids, hobbies, etc.).

Pros and Cons of Using Customer Database

As was already mentioned, a customer information database can have many benefits for businesses. But, it can also have some drawbacks.

Let’s quickly look at the biggest pros and cons of creating and running such a database.

Pros:

• Databases make it easy to organize, store, and access customer-related data, and it also makes it easy to find through a simple query.
• Databases allow better security and privacy of your data as you can leverage additional security features and ensure that only authorized users can access it.
• Customer databases make it easy for companies to analyze and interpret vital data about their prospects and existing clients.
• With the help of smart business intelligence solutions, you can ensure that your database stores accurate real-time data crucial for effective decision-making.

Cons:

• Businesses need to have strong technical skill sets in order to design, implement, and maintain effective databases. Apart from that, some technical skills are also required for the effective use of such databases, so there might be a need for additional employee training to ensure effective work.
• The costs of designing, implementing, and maintaining such a tool can be rather high and the initial conversion cost is high too.

How to Create a Customer Database?

While the filling of your database should be aligned with your specific needs and objectives, meaning that there is no one-size-fits-all solution, the process of creating a database is more or less the same.

Below are some basic steps and tips to help you create an effective database:

1. Be Future-Ready

It’s not hard to start a new SQL table or a single worksheet. But, as your company grows, the number of clients will grow too and you have to be ready for that. Therefore, when creating your first database, you must consider how you are going to manage increased data flows in the future.

Here are some basic data storage rules that will come in handy:

• Create neat, well-divided, and well-structured tables;
• Define static and variable columns;
• Enumerate all data;
• Use proper formatting for different types of numerals (e.g. currency, percentage, etc.);
• Add relevant attributes to your entities.

An easy way to get started is to find accurate customer database examples and ready-made templates. This can help you structure your own database faster and easier.

1. Get Rid of Unnecessary Information

Although it may feel like very extensive and detailed databases are good for businesses, they can be much more expensive and not effective enough as searching for the needed data will take more time.

Therefore, we recommend you focus on significant data and stay away from irrelevant or unnecessary details. Ideally, ask your team what kind of data they need.

1. Put It on Autopilot

It is always a good idea to write additional code or leverage APIs to add the autocomplete feature to your database. This feature will save your team plenty of time as all new data will be transferred to your database automatically. This is especially helpful if you buy lead list or leverage additional software from which you need to transfer data into your database in bulk.

1. Create a “How-To” for Your Database

No matter how tech-savvy your employees are, it will still take them some time to get used to a new tool. Therefore, it is always good to have a detailed user guide that will explain relevant columns and rows, define version control procedures, and provide other information that will help your team use the database easily and efficiently.

1. Assign the Roles

Finally, in order to prevent confusion and issues, it is crucial that you carefully distribute the roles and access levels in your database. Assign the file holder, employees who have the right to edit the data, and those who will be just viewers.

Examples of Customer Database Management

Every business should know that customer data is one of its most valuable assets. Respectively, you can’t use just any tool to store and manage this asset. You need database software that is time-tested and proven to be effective.

Namely, the two biggest options existing today include:

• Oracle RDBMS
• SAP Sybase ASE

These two databases are used by the largest brands and are proven to be secure, reliable, and perform well for all business needs.

Best Customer Database Software

Although it’s possible to create a plain database using Excel only, this approach is often counter-productive. Additional customer database software will provide you with a wide range of extra features, formulas, templates, etc. that will save your team’s time and ensure a seamless workflow.

To get the best outcomes, you can integrate your database with the following software:

• SalesForce;
• Snov.io;
• Zendesk;
• HubSpot;
• Freshworks.

These tools are the best to collect and manage customer data in 2022.

Difference Between Customer Database and Data Warehouse

There always has been some confusion between a customer database and a data warehouse. So, how are they different?

The key thing you need to know is that a data warehouse is used to store large amounts of complex and unstructured data. A database, on the contrary, stores only relevant, accurate, and well-structured data.

Conclusion

Hopefully, after reading this guide the answer to the question “what is a customer database” is clear.

Now, you should know what a database is, how it benefits your company, and how to create and maintain one with ease. Use the tips and pieces of advice from this article to collect, store, and analyze customer data for the best business outcomes!