Customer Database or Client Database is the basis for the business activities of almost every business. It’s a list of current or potential customers, usually including their details.
It can take many forms ranging from a simple list of customers on paper to a sophisticated database in some CRM software that includes a detailed market segmentation. The advantage of such systems is the ability of quick search, possibility of applying various filters and easy access to a range of customer information. Fast processing of a large number of customers without using any software is almost impossible.
The customer database usually contains information about current, former and potential customers.
What is the customer database used for?
It is the basis of business activities that enables to adopt an individual approach to each and every customer.
- Keep records of current customers - their basic billing information, contact person, but also history of communications and business activities and transactions (such as placed orders)
- Keep records of potential customers - the database is the basis for marketing and business activities, campaigns, and so on
The client database may also contain personal or otherwise confidential information. Business purpose of keeping such database and its adequacy to the subject of business is crucial in order to be able to justify the lawfulness of managing such a database. Its content and security must comply with the privacy laws in force in a particular region or country (for example, customer database containing information about citizens of the European Union must be in compliance with GDPR).
What does the customer database usually contain?
- Customer Contact Information - contact information including emails, phone numbers, headquarter address, fax number, website, links to social network profiles, and preferred contact methods
- History of communication and history of business activities - can also include client needs, feedback, complaints
How is a customer database created?
Most businesses build their client database gradually based on business history - orders, contracts, etc. Potential customers’ contact details can also be obtained by purchasing a database, using a questionnaire, promotional events, competitions, and so on. Even when collecting and creating a database, one must observe the privacy laws applicable in the given region or country.
The most common ways to create a client database are:
- based on business history (orders, etc.)
- purchase of a database
- based on contact details collected from questionnaires, events, competitions, etc.
- from online analytical systems
- from loyalty programs