A customer database is something every business will have in some form. Your business might use an Excel spreadsheet, a CRM software (Zoho, Salesforce, Hubspot to name just a few), or perhaps a Rolodex (an artifact of the 19th century). In basic terms, it’s whatever you use to keep track of customers, store relevant information about them, and refer to when planning and executing your sales and marketing moves.
There are several factors which will determine how big, small, simple or complex your customer database becomes:
- Business size
- Customer type
- Number of sales staff
- Range of products/services
- Your sales funnel
- Your marketing tools (email, SMS, social media, print, etc.)
Your database should reflect the information you need to build a relationship with your ideal customer. For example, you have a new kind of dog food that is specifically designed for Kelpies. Knowing which customers own a Kelpie vs a Chihuahua will make it a lot easier to communicate with the group most likely to need or want this particular product.
Another example: you’re running a sale to celebrate 10 years in business, and want to reward the customers who have been with you since the beginning. Having a clear record of when you began selling to each customer will help you set up the sales funnel to achieve this.
Now we’ve covered the basic what and where of a customer database, let’s move on to the big one….why?
A well-developed and maintained customer database helps you find the best channels to contact customers, personalise marketing communications and identify customer groups based on current or potential interest. When used effectively, there’s also potential for your database to increase customer retention and fine-tune campaigns by targeting the most likely customers.
You can also use the information you record to better understand customers, apply market segmentation, assess customer value, and tailor specialised offerings. In short, you can get your messages and products in the right place at the right time.
Now we’ve got the why out of the way, how do you actually use the customer database?