What is CRM database
A customer relationship management (CRM) database is a resource that contains all customer data that all departments within an organization can access. These data include customer information, sales reports, and marketing statistics. Companies use all this information to track, evaluate, and direct customer interactions.
What makes a good CRM database
A good CRM database allows you to collect a broad spectrum of customer information and store it in a centralized location. These data include the following:
- Personal details: Customer’s name, address, and phone number
- Lead source: The channel through which you acquired the lead or customer
- Online behavior: The last time a customer visited your business website or engaged with your online content
- Customer interactions: A customer’s interactions with your sales and support team
- Other information: Miscellaneous information that you can use for personalization, such as a customer’s hobbies, favorite pet, or preferred brands
Key features of a good CRM database
A good CRM database offers features that will help businesses organize their leads and contacts, personalize customer engagement, and generate meaningful insights from relevant data. These key CRM features include the following:
- Contact management: Collects, stores, and enriches customer data from various sources
- Lead management: Automatically assigns new leads to a sales rep, allowing users to set follow-up reminders and monitor a lead’s progress through the sales pipeline
- Contact segmentation: Segments customers into various groups based on specific criteria and parameters, such as demographics and purchase history, to aid in content personalization
- Analytics and reporting: Tracks relevant sales and marketing metrics to generate meaningful insights
- Integrations: Supports integration with other apps or tools in your technology stack, such as email marketing software, productivity tools, social media channels, and e-commerce platforms
How does a CRM database work
A CRM database interacts with other features of the CRM system where it is a part of. For instance, you can use stored information to personalize content for your email marketing campaigns. In addition, it logs all customer interactions and feedback so that your support team can assist them based on their latest request.
Modern CRM database systems automatically collect data and enrich them from various online sources to eliminate inconsistencies and double entries. Centralized access to all these data provides businesses with a holistic view of the customer, eliminating the need to toggle between different platforms to monitor customer behavior and interactions.
3 types of CRM database
CRM database applications fall into three categories depending on the type of data they process and their distinct purposes:
- Operational CRM database: Automates and optimizes customer-facing processes to streamline sales, marketing, and customer service operations.
- Collaborative CRM database: Enhances communication and collaboration among internal teams and external partners to streamline information sharing and maintain consistent customer interactions.
- Analytical CRM database: Analyzes customer data and extracts valuable insights from it to help businesses build effective marketing campaigns and raise customer satisfaction.
CRM database use cases
A CRM database is a valuable tool for businesses that interact with customers. Specifically, here are its use cases for business operations:
Sales
The CRM database serves as a resource for identifying qualified sales leads and tracking data points. It can help streamline sales operations through custom workflows that trigger sales activities such as record updates, email sends, and task assignments.
Marketing
CRM database systems provide marketing reps with information they can use to build targeted campaigns. In addition, they track your audiences’ responses to your email and marketing campaigns and provide insights into what your leads are interested in.
Customer service
Support reps can quickly access the history of customer interactions from the centralized CRM database to deliver relevant and effective customer service. They can simply pick up from where the last agent left off, eliminating the need to recap customer questions and requests.
4 Benefits of using CRM database
Here are the top benefits your business can have by using a CRM database:
- Streamlined contact management: A CRM database automates contact management, ensuring all contact information is easily accessible from a centralized location. It also automatically logs communication records relevant to each contact in real time, eliminating the need for reps to key in these updates manually.
- Centralized communication: Communication management is a breeze since all team members using the CRM can view each customer’s interaction history with the company. This includes customer inquiries, requests, and complaints. You can set reminders and automatically assign leads and deals to agents to ensure timeline follow-ups.
- Improved customer retention: Marketing teams can segment their leads, contacts, and customers based on demographic and geographic information saved in the CRM database. Then, they can build personalized email and marketing campaigns for each segment. Doing this helps you retain customers by keeping your customers satisfied and interested in what you offer.
- Data-based decision-making: The CRM database is a valuable source for customer data and analytics. Businesses can gain insights into their sales performance, customer behavior, and market trends based on information in the database. This enables you to make data-based business decisions regarding your future marketing campaigns, product or service development, and human resource allocation.
SEE: 8 Benefits of CRM Software for Businesses
How to get started with CRM database: Data migration
Customer data comes from various sources, which include emails, social media, and business websites. While a CRM database makes it easy for you to gather all these data and access them from a single platform, its setup and maintenance can be daunting. To guide you through CRM data migration, I’ve broken down the process into these steps:
1. Planning
The initial step in CRM data migration starts with a meeting among your stakeholders, managers, and technical staff. Discuss the scope of the data that you need to migrate and how your CRM database can help you meet your business needs. The data governance team will also assign roles and responsibilities to involved members and oversee the data migration process.
2. Analysis and design
In this step, the data governance team will conduct tests to determine whether the data migration plan is working well or needs adjustments. They will evaluate data quality, checking for corrupted data or improper data formatting. Other technical aspects of this step include securing data to comply with regulations and fleshing out the data staging, testing, and production.
3. Implementation
The actual data implementation process starts with creating a staging area for data migration. This usually begins with the transfer of a small subset of data before moving on to the complete data migration. Then, the implementation process needs to be tested thoroughly before the operations are moved to the new CRM database.
4. Closeout
The last step involves outlining the successes and points for improvement gleaned from the data migration project. The data governance team will document all the knowledge required for training or reference.
SEE: How to Use CRM: A Beginners Guide
How to optimize your CRM database
CRM databases require optimization and maintenance to ensure that they consistently function at a high speed and that your data remains relevant to your business needs. In addition, optimization helps you ensure that you are compliant with data privacy regulations. Follow these step-by-step instructions to optimize your CRM database:
1. Invest in data governance
Data governance refers to a set of practices and processes involved in managing data assets. Organize a data governance team that will take charge of your company’s data ownership, procedures, communication, quality, and security.
2. Leverage a data automation tool
Reduce or eliminate manual data correction by automating the process. Modern CRM platforms offer features such as automatic data import/export, deduplication, and enrichment to help you save time and effort in CRM database management.
3. Use CRM data to generate business reports
Design business reports that can help your sales and marketing teams measure their metrics, performance, and effectiveness. Use your CRM data to create these reports.
4. Implement decisions based on CRM data
Create business strategies and make data-driven decisions based on information recorded in your CRM database. Identify quick wins and launch new business initiatives that can replicate these positive results.
How to choose the right CRM database for your business?
When choosing the right CRM database for your business, you must first understand what you need and match those needs with the CRM’s features. Here are some important questions that you have to answer to narrow down your CRM database options and eventually commit to the provider that best fits your business needs:
- How big is your company or organization?
- Which of your employees are going to use the CRM database?
- How much can you spend on a CRM database yearly?
- What are your main business processes?
- Do you need CRM integrations with other software like Gmail and Google Calendar?
- Do you need lead management features?
- What marketing channels do you use?
Answering these questions will help point you to the right CRM database that can help you streamline your contact and data management processes.
CRM database best practices
Having a well-maintained CRM database can help you support business growth. Follow the best practices below to ensure your CRM data is optimized for migration and your organization is primed for revenue growth.
- Determine your scope and budget
Maintaining a CRM database can be complex and expensive. CRM pricing depends not only on subscription fees but also on the volume of data and the cost of the required data storage. To ensure that you don’t go beyond your budget, set the scope of data that your teams need for sales and revenue generation.
Data hygiene is key to an optimized CRM database, so it is important to analyze and evaluate your legacy contacts. Check for duplicates, ensure that the records are free of error, and update them with new contact information as needed. Determine if you are still using specific client groups, custom fields, redundant fields, and attached notes. If not, you can exclude these data fields from migration.
- Establish a cut-off data for CRM records
Together with your colleagues, determine how long you should keep stale contacts in your CRM database and when you can abandon an open lead. Generally, companies keep historical data for up to five years. In addition, talk about what level of customer interaction you will track and how you can balance engagement tracking with data privacy compliance.
- Prepare for data migration
When preparing the legacy data for CRM migration, make sure that you create a custom field for the legacy ID of each record to be migrated. This makes it easier to view historical data records in the future and to recover data that could be accidentally deleted during the original import. Another important step is to create a compound key for companies and address fields to make it easier to import into your new CRM database.
- Start with cyclical data migrations
Start small and test your import first with a small subset of CRM data. This way, you can easily add skipped content and resolve issues promptly as they arise. It is also advisable to keep your old CRM database functional for about six months as a precaution against accidental omission of legacy data.
- Verify and improve data after migration
Don’t skimp by skipping data validation after migration. Instead, run a final purge of your database to eliminate old, duplicate, inaccurate, and irrelevant data. Doing this helps preserve the integrity of your migrated CRM data.
SEE: 7 CRM Best Practices for Businesses
Frequently asked questions (FAQs)
What is a CRM database, and why is it important for businesses?
A CRM database is a repository of all client data collected and shared by an organization. It is important because the information it holds is useful and can help businesses enhance customer experience, drive business growth, increase conversion rate, and improve forecasting accuracy.
What’s the difference between a CRM and a CRM database?
The terms “CRM” and “CRM database” are sometimes used interchangeably, but they differ from each other. The CRM database is just one essential part of the CRM system.
How does a CRM database work to manage customer data?
A CRM database collects all data on the interactions of a business with its customers and makes it available to everyone in the company using a centralized dashboard. Users can organize contact records, track deals, and generate reports based on information saved in the CRM database.
How does a CRM database improve customer relationships?
A CRM database stores important customer information in a centralized location. Sales, marketing, and customer service teams can all access customer data, including their needs, wants, and expectations. This enables businesses to provide better service to customers and improve client communication.
How does a CRM database support personalization in marketing?
A CRM database allows users to segment audiences into distinct groups based on several criteria, such as demographics, engagement level, and purchase history. Businesses can then target these segmented audiences with personalized content and offers.
Bottomline
A CRM database is an important foundation that can help businesses generate revenue. Choosing the right provider is the key to having consistent and reliable data that everyone in your company can access and leverage for customer engagement and marketing campaigns. The CRM database examples above are good starting points, but you have to make sure that you choose a provider that offers your essential feature requirements.