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Customer database: definition and instructions for use

September 12, 2023

Data: the new goldmine for businesses! In this age of "customer centricity" and the race for information, companies are constantly looking for the best ways to collect customer data

The treasure of companies today is their customer database: a complex treasure that deserves their full attention, since it plays a crucial role in their development. 

Focus on what you need to know about this new goldmine: what is a customer database? How should it be structured? What is it used for

What is a customer database? 

As its name suggests, a customer database is a list of data relating to a company's current customers. This database is a valuable resource for a company, since the information collected enables it to make informed decisions and thus improve its performance.

The customer database is regularly managed by CRM (Customer Relationship Management) software to store all the information and highlight the relevant data collected for a specific branch of the company (sales, marketing, after-sales service, etc.).

What data should be collected to build a relevant customer database?

Generally speaking, companies collect three types of information with the aim of incorporating them into their customer database. 

1 - Generic data 

Generic data, or more commonly known as general customer information, represents all the data relating to the customer as a person. This data differs according to the type of customer.

For a B2C company, it includes the customer's surname, first name, email address and telephone number. 

In parallel, for a B2B company, it includes the legal and administrative data of the client company, such as its company name, its SIRET number, its business sector, its size, its email address, its telephone number, and the position of the contact within the company. 

This generic data can be further refined by collecting demographic or sociological data such as place of residence, age or gender. This makes it possible to create a more precise analysis of the customer. 

Each customer then has a customer file. This file contains all the information about that particular customer. A customer file can be created from the stage at which the customer becomes a prospect for the company, right through to building customer loyalty.

2 - Relational data 

Collecting data specific to the relationship between the company and the customer is also essential. This data enables us to understand how the customer interacts with the company. In concrete terms, this information records the activity of the prospect or customer in relation to the company.

This relationship is represented by data such as the customer's purchase history (list of items purchased, dates of purchase, amount spent per transaction), purchasing preferences (preferred product categories, preferred size and colours) or website browsing history (pages visited, products viewed, etc.). 

3 - Satisfaction data

This data is a strong indicator of customer satisfaction with their purchase, and more generally with their experience of the company. This makes it possible to identify typical customers who may or may not be satisfied with the product. 

To do this, it is possible to collect data on the return rate, the satisfaction rate, the NPS (Net Promoter Score) or the frequency of purchase per customer.

4 - Identify the data that is relevant to you! 

The key to building an efficient customer database is to ensure that it is consistent with your company's activity. This will enable it to collect information that is relevant to its needs.

That's why identifying the key data to be collected is a painstaking task, because it's specific to each company. The aim is not to get lost in a flood of data, which would then be unreadable!

It should also be noted that a database is bound to evolve over time: the selection of key data can change according to the company's needs

Moreover, a customer database must always be kept up to date so that the data collected reflects your customers' current trends (data that is 10 years old is obsolete). Good database management makes for an effective tool.

How do you structure your customer database? 

Collecting data is all very well. But it needs to be organised so that it can be read and used. Structuring your database is therefore crucial to implementing actionable plans and improving your company's sales performance.

In practical terms, how can you improve the management of your customer database? With CRM software. CRM software is used to manage customer relationships. It is first and foremost a decision-making tool designed to make information readable and accessible to the various teams within a company. A CRM has reporting and analysis functionalities, which enable relevant information from the customer database to be highlighted.

Beyond the strategic decision-making aspect, a CRM also maximises a company's interactions with its customers. It provides personalised monitoring of each customer, their interactions and the means by which they communicate with the company, enabling the company to offer them a personalised experience. For example, a company can reward loyal customers with promotional codes.

CRM software is a fundamental decision-making tool for reading the data collected. It will enable a team to read the data at its disposal, draw trends from it and thus gain general knowledge about its type of customer and their desires. It can also be used to monitor a company's various customers and prospects on a personalised basis. 

But what is the purpose of a customer database? 

1 - Keeping track of your customers 

Firstly, a customer database helps to retain existing customers. It is cheaper for a company to keep its existing customers than to find and acquire new ones.

The customer database is one of the essential tools for increasing customer loyalty by improving their experience and therefore their engagement to your company: an invaluable asset for creating ambassadors for your brand!

How do we do this? 

By using this information, we can propose personalised offers tailored to the customer's needs. For example, it is possible to offer relevant additional products linked to the last product purchased by a customer. 

This creates and maintains a relationship with the customer and builds loyalty. So it's now possible to offer the right product, to the right customer, at the right time! 

2 - Reaching new customers 

From a commercial point of view, customer information first of all enables us to better target the typical customer we need to attract. When you first approach this typical prospect, it will then be easy, after analysis, to adopt the right sales pitch to show that your product perfectly meets this customer's expectations. Sales staff will be able to use the right tone and the right words to attract them.

Thanks to clear, regularly updated data, sales staff will be able to constantly adapt their discussions to the typical customer they are dealing with. They will be able to create a personalised offer that matches their customer's expectations.

3 - Evolve your strategy 

Finally, a well-developed customer database enables a company to take a step back from its brand strategy. It can then adopt new strategies to differentiate itself from its competitors. By offering content that is adapted (format, type of media, etc.) to a defined audience, a customer will be more receptive to a marketing campaign, for example. 

Thanks to customer information, the marketing strategy can be reviewed and improved: it will be better adapted to its target and therefore more effective.

During your marketing campaign, it will also be possible to collect additional information, creating a virtuous circle of constantly updated and usable data! Have a look at the different ways of collecting customer data in this article

Generally speaking, an efficient customer database means that, once analysed, you can develop coherent KPIs to monitor the development of your company.

GDPR break! 

It is important to note that the collection and processing of data is governed by the European GDPR (General Data Protection Regulation). It provides a framework for data storage and limits its duration. 

For this reason, companies must be transparent about how they use personal data. All customers must confirm their consent to the use of their data and must have access to the way in which a company uses it. It must also be possible for customers to request that their data be modified or deleted.

Finally, the GDPR concerns your brand, but also all data processors: so make sure that your processor undertakes to comply with the regulations.

Pimster's expertise

In conclusion, a customer database is an essential resource for any company today. However, information alone is not enough to improve a company's relationship with its customers or to increase its performance.

It is important not only to collect relevant data that is updated as required, but also to structure that data. Without this, a database would be worthless. 

Today, a database is one of the key tools for implementing marketing and sales initiatives tailored to customer needs. Its management and use play a crucial role in boosting a company's performance.

Would you like to find out more about data with us? Request a demo.