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What Is a Customer Database?

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Last editedMay 20222 min read

Customer data has changed the face of marketing, offering real-time insights into buyer behavior. It can help you better categorize and communicate with your core demographic – but what is a company customer database and how does it work?

What is a company customer database?

A company’s customer database is an organized collection of customer details. At the most basic level, this will simply be a spreadsheet containing customer names and email addresses. More advanced database software will include data related to buyer behavior, preferences, and demographic information.

It’s up to a business to determine which information is included in this type of database, as well as what to do with it. There’s a high degree of flexibility included to make it work best for your company. This might mean retaining contact details for former customers or future potential sales leads as well as current clients. The primary goal is to provide better service on a personal level, using details contained in the database.

What information is typically included in a customer database?

A basic customer database will include client names, delivery addresses and contact details. If you want a more in-depth marketing tool, what information is typically included in a customer database? This will include characteristics used in customer segmentation.

  • Demographic data like marital status, household composition, age, and gender

  • Purchasing data including past purchases, order cancellations, and shopping preferences

  • Professional data including customer contacts and job titles

  • B2B data including the company’s history, number of employees, and industry

What is a customer database in marketing used for?

With an easily scannable and searchable breakdown of customer data, you can use this tool to assist with marketing efforts and customer relationship management. Databases can help your marketing team create buyer personas and perform a customer segmentation analysis, while mapping the buyer journey. So, what is a customer database in marketing used for?

  • Creating sales and marketing funnels

  • Understanding sales leads

  • Matching leads to the most enticing offers

  • Customizing responses to messages

  • Responding to client inquiries in a more helpful way

  • Sticking to your marketing budget

In short, a customer database helps the marketing team gain greater understanding of both existing customers and promising leads. While data warehouses pool together large quantities of unstructured customer data, a customer database is well-organized for easy retrieval of relevant information.

Pros and cons of using a customer database

Like any marketing tool, there are advantages and disadvantages of using a customer database.

Pros include:

  • Customer data analysis to generate marketing reports and target sales

  • Simplified data storage for easier interpretation

  • Real-time information helps assist with decision making

  • Secure storage systems keep customer details safe

Drawbacks include:

  • Initial investment to get the database set up and maintained

  • Training is required for users to access the system and accurately interpret results

How to set up a customer database

Whether you opt for a simple Excel spreadsheet or complex database software, there are a few steps to follow.

  • To get started, you’ll need to formulate how data will be stored both now and in the future. You should set up neat tables without too many merged cells, using punctuation and formatting to make your data easier to read.

  • In the initial stages, it’s also important to determine what information will be included. Are you more interested in recording buyer trends, or looking at B2B characteristics? You don’t want to overload your system, so you need to finetune which details are most important.

  • Determine who will have access to your online customer database. Will the full marketing team have unrestrained access? Who will be the file holder? Who will be able to make edits? Think about these permissions before implementing the software.

Finally, compare your options carefully. There’s a wealth of customer database software out there, including Zendesk, Salesforce, Pipedrive and others. Look at cost, features, and connectivity to find the best fit.

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