What is a CRM Database? A Complete Guide

Updated Feb 5, 2023.

Managing your contacts and deals does not have to be a big burden. Many businesses still use manual methods of tracking their data such as spreadsheets and documents.

If you fall into this category, you need to find some level of automation to make it easier for you to track your contacts and deals.

The problem with using manual data entry is that it is time-consuming and prone to human error. Such a method makes it difficult to track your data and keep your team members updated about the latest movements in your contacts and deals.

Luckily, there is an easier way for you to track and manage your contacts and deals, the CRM database. Unlike spreadsheets and documents which require lots of manual data entry, the CRM database is automated. It helps connect sales, marketing, and customer support departments.

In this article, you will learn everything you need to know about a CRM database, including the customer database features you need and how to maintain a CRM database for your business.

Let’s get started.

What is a CRM Database?

A customer relationship management (CRM) database contains all customer information stored inside a customer relationship management (CRM) system.

The types of data stored in a CRM database may include:

  • Personal Details of a Customer: Contact name, title, phone number, email address, links to all social media profiles, and more.
  • Sources of Leads: Records of activities like data on how the customer got to know about the company or the point of contact such as social media, website, banner, email campaign, and more.
  • Interaction with Customers: The date of initial contact, the last conversation with customers, the feedback they gave, and what other activity your customers subscribed to through your email campaigns.
  • Purchase History: The history of all the orders by the client including the cost and quantity ordered by the client.

Other information that you may find in a CRM database includes the names of the client’s kids, their hobbies, and where they work.

The CRM database can also include customers’ data like their birthdays that can help you create a long-term relationship with them. You can use data like their birthday to wish them a happy birthday every year.

With the data in your CRM database, you can figure out what your customers want and also identify your frequent customers and prioritize them.

5 CRM Benefits
Source: Tech.co

Benefits of a Good CRM Database

Customers are the main reason for opening a business. No business can exist without its customer base. To maintain this customer base, you need an effective CRM database.

1. Effective Customer Data Coordination

CRM can be really helpful for companies whose sales lead cut across different areas in the company. If a customer makes contact with sales, products, and support, a CRM database will ensure that they are not collecting the same data multiple times from the customer.

2. Customer Segmentation

Another benefit of CRM is that it can be valuable for organizations that run marketing campaigns. It is beneficial for companies that make use of newsletters to send information about new products and activities of the company.

Since the data of its customers is available in the CRM database, it makes it easy to segment who and who needs a particular newsletter. You can set up a list of automated emails that are directly written to a specific target audience and also the call to action button triggers a specific action.

3. Easy Tracking of Leads and Customers

A CRM database helps your team to keep tabs on every customer and the information related to them. No matter how long a buyer has been with the company, the CRM database will have data on if a customer visited the organization’s website, bought from the site, or has been in touch with any of your team. All phone calls and email conversations can also be found in the CRM database.

What Exactly Does a CRM Database Do?

Customer relationship management (CRM) deals with two things: customer database and CRM software and automation.

1. Customer Database

A company maintains all records of its existing and potential customers by using a customer database. The CRM database contains all the information about your customers. It comprises phone numbers of customers, job titles, email addresses, home addresses, and the kind of relationship the customer has with the company.

The customer database also helps you to keep records of different interactions made between the company and customers. For example, when a customer makes a call and complains about a particular failed service or product that did not get delivered on time, this information goes to the CRM database.

CRM databases promote an effective relationship between the company and its client.

2. CRM Software and Automation

CRM software is a CRM database tool with features designed to help with the easy flow of communication and streamline the way you carry out your work. This application was created to assist companies to manage many major business processes which include customer interactions, contacts, marketing, customer data, and customer support.

Sales representatives use CRM software to do their work better and boost sales cycles through the automation of repetitive tasks. CRM software tools also include automation features such as performing live chat, email marketing, web forms, and marketing analytics.

CRM Software use by Industry
Source: ScienceSoft

The Structure of a CRM System

The customer relationship management (CRM) database is the major part of the CRM software system. This is the central box of all the data that will support the other integral parts of the CRM system and help manage all of its other functions.

The key modules that make up the CRM software are contact management, lead management, analytics, social media management, and performance management. All these modules take information from or add information to the CRM database.

Each time you create a new lead, you create a fresh record automatically in your CRM database. When you convert the lead into a paying customer through your marketing campaigns, the information enters into the CRM database. Every module of the CRM software organizes its data around the CRM database.

Many CRM systems use an advanced form of the CRM database called the CRM data warehouse. One of the major differences between a CRM database and a CRM data warehouse is that the CRM data warehouse is suitable for CRM systems that handle large-scale data from multiple sources.

CRM data warehouse analyzes your customers’ data deeply with the view of providing better business insights. Top companies such as Netflix and Amazon use it to get the best insights into their customers.

CRM data warehouse
Source: Tutorialspoint

Pick the Customer Database Features You Need

CRM is a powerful boost to any organization. However, the effectiveness of the CRM system can only be as good as the quality of data you put into it. This is why building an accurate and effective customer database is essential.

1. Lead Management

Every CRM system should have lead management features. As leads enter into the customer database, CRM automatically assigns these leads to the right salespeople.

CRM helps companies manage leads or contacts that have multiple touchpoints with the company. Multiple teams within a company working with customers benefit from one centralized customer database. It prevents them from having to search externally for customer information another team has.

2. Contact Management

A key element to look out for when picking a CRM database is contact management. Having a central customer database enables you to store all your customers’ information from multiple sources in one place.

With the automation feature in place, your sales reps do not have to spend time manually adding customers’ data to the database or updating their contact info. The contact management feature will help your sales reps close more deals in a faster time.

3. People Management

The first core feature to look out for when looking for a CRM system is people management. CRM is all about managing people. This feature helps you to deploy qualified people into your organization to solve its pressing customer problems.

Marketing and sales departments can use this customer database feature to follow up on leads and manage their marketing campaigns. Managers can also directly assign tasks to employees and track their progress.

4. Marketing Automation

CRM databases help segment your customers into different groups or subgroups for more effective targeting and conversions. Conduct and measure the success of your marketing campaigns with CRM software.

You can also integrate popular tools into your CRM software such as email marketing tools such as MailChimp and ConvertKit.

5. Sales Task Automation

One of the core elements of a CRM database is its ability to automate all kinds of sales tasks. Automating sales tasks and other tasks associated with sales such as order processing and order tracking is essential for developing full insights into your customers.

Sales task automation helps your sales team to efficiently focus on building stronger relationships with customers and less on administrative tasks.

6. Customer Service

Customer service teams rely on CRM databases to solve customer problems. Since the CRM database stores every interaction a customer has with the company in one dashboard, customer service teams do not have to check through different customer touchpoints to find answers.

A CRM database that has customer service features boosts your customer experience. Your customers will not have to wait for a long time before a customer service agent can draw a picture of what they need.

7. Reporting and Analytics

Reporting and analytics are crucial elements of a CRM database. The whole essence of a CRM database is to provide and track customer data that is beneficial to the company.

Companies use CRM to generate reports based on their KPIs and to get deep analytics into their customers. You can use CRM to track the performance of your sales pipeline and use the information to improve customer relationships.

Top-Requested CRM Software Features
Source: SupperOffice

Types of Data in a CRM Database

A customer relationship database accommodates all the information collated, stored, and examined by different modules of a CRM system. The modules in the CRM system will make sure the data is used to offer numerous benefits of the CRM to the business users.

There are four types of data in the customer database: personal data, quantitative, qualitative, and descriptive data. This categorization makes CRM data more straightforward to understand.

1. Personal Data

This type of data in a CRM database includes name, company details, contact details (phone, email, and skype), location, Social Media, birthday, and more.

2. Quantitative Data

Quantitative data includes:

  • The total purchases that the client has made.
  • The number of times your clients have visited your website.
  • The average time spent on your website.
  • How frequently do they engage with your business’s social media page?

3. Qualitative Data

Qualitative data usually includes the client’s behaviors, attitudes, and motivations that are related to the purchasing power of the client.

  • Rate the score of your company’s customer service (If the client was assisted well by the customer service or not).
  • Details on what led them to buy from you.

4. Descriptive Data

Descriptive data is related to the life details of your clients.

  • The client’s company name, their educational level, and more.
  • Their marital status and also any information about children if necessary.
  • Their birthday, home address, and any noteworthy interest.

How to Maintain a CRM Database

Your CRM database has data that is vital for your business. The maintenance of your data can be difficult, daunting, and time-consuming. However, your business needs it to increase your customer satisfaction thereby increasing your customer lifetime value (CLV).

CRM maintenance should be a top priority for every business. An up-to-date and clean CRM database is important to ensure all data is correct.

1. Only Import Necessary Data When Adding Contact Lists

If you import contact lists into your CRM, you should be careful while doing it. You should know where the data was obtained from, which fields to use, and how they correlate with the fields in your new CRM.

Make sure you focus on relevant data and import it to your new fields. This will make your database up to date and clean.

2. Restrict Data Entry to Limited People

When accumulating and collating data in the database, if they are from multiple sources, the chances of duplicating data and also inconsistency will grow tremendously.

Corrupted data will give you imprecise insight or nothing at all. This is why only the necessary people working in the sales and marketing department should get access to data entry functions.

3. Regularly Check the Database to Prevent Duplicate Data Entries

Schedule routine checks to get rid of duplicate data and join similar records together. A cleanup and detection feature of the CRM system is necessary for handling duplicate data entries. It should remove all sorts of dirty data such as outdated data, duplicate data, invalid data, and fraudulent data.

4. Put Confirmation Link for Email and Phone Fields on Forms

Many people visiting your website will enter wrong information when filling your online forms. These fake data will create a very dirty database and there will be setbacks in your efficiency.

To solve this issue, include confirmation measures on both email and phone number fields. Modern CRMs verify the email address before a form can be submitted.

Perform Integrated Analytics and Lead Generation Tracking

The data collated using a CRM database allows your company to work on the needs of your clients, and also gives you more time to make it right.

Having information about your customers is relevant to the growth of your business. Are you planning a special promo for long-time clients? Do you always notice a customer that frequently visits the company’s website without purchasing anything? This kind of information will let you know your clients better and will help you make the right decision with the leads you have.

As you follow up on a lead, your sales team’s productivity increases. Integrating analytics and lead generation will enable proper customer management.

1. Picking Your Top Customers

Building an efficient CRM involves broadening out your customer base and making them important as they go through the sales funnel.

Sales Funnel Stages and Pipeline Stages_
Source: AutoGrow

2. Upselling and Cross-selling Opportunities

Upselling aims to convince your customer to buy an upgraded or more expensive version of their original choice. Cross-selling is persuading customers to buy items related or complementary to their original choice.

3. Customer Retention

Customer retention is the ability of a company to let customers become frequent buyers and stop them from moving to a competitor. Your ability to retain customers shows that your service and product pleases your existing customers.

4. Closing More Deals

Using the features of the CRM database will help you to organize a very strong proposal for a business that can be presented at the right time. Sales CRMs make it easier for your sales team to organize, gather, and remember all the information you have required about the client.

Using a good CRM application is very necessary. Even if you run a small business and do not have the budget to subscribe to a premium CRM like Salesforce, there are lots of free CRM software that offer the CRM features you need to grow your business.

With CRM software, you can have an arranged lead system that will help locate every information of new leads like interesting products, sources, and many more.

Campaign and List Management with Customer Database Software

A very clean customer data can help you start, plan, and execute all sorts of campaigns, from internal procedures to external marketing.

1. Campaign with Customer Database Software

Campaigns are a sequence of actions to meet certain goals, like having a lead from how the customer got to know your company and closing a sale.

Tracing the data in your customer database will help you organize the workflow from the first campaign through testing, building, deployment, and measurement.

Creating a campaign through the newsletter and collating data of audiences who submitted their name and info into the form is the first step of a lead. Then the next campaign is on how to invite them to buy a particular product or organize a special promo for them.

Having them put their birthday date while filling the form, you can wish them a happy birthday and also show them the offers they have for that day just because their birthday falls on that day.

Some of the best client database and customer database software tools available in the market include Monday.com, Zoho CRM, Keap CRM, and Streak CRM.

2. List Management with Customer Database Software

One of the most highly demanded results of a clean customer database is lists. They can contain all data from leads to organizational information.

A good CRM database system will do more than just make lists. It can divide all contacts and lists into custom-made and prearranged groups. This will serve as the foundation for creating new campaigns, contact management, and live response and update.

As the custom database grows, you have to continue looking at features of the CRM that are still working and those that have stopped working for your organization.

You may notice you have stopped tracking certain data in a particular group or you may want to focus on more detail in other parts. This will help you make the best of your business’s stake in your CRM and your database.

Automate Your CRM Database Management with CRM Systems

CRM systems are evolving and becoming increasingly popular among businesses in different industries because of the way they simplify your CRM database management.

The right CRM systems can help you create long-lasting and productive relationships with your customers. Using the best CRM software tools helps you to automate your CRM database management by keeping your customers and business data organized as you grow.

Whether you are looking for a small business CRM software, CRM for startups, or more advanced cloud-based CRM software, there are lots of options to choose from.CRM systems provide you with a rich variety of information about your customers that you will find it difficult to get elsewhere. Part of your CRM strategy for your business should include using CRM database tools to manage your CRM database.

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Anastasia Belyh

Editor at FounderJar

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.