CRM data and databases: everything you need to know

CRM data is one of the most valuable sources of insight a business can hold. A customer relationship management (CRM) database collects all sources of customer data and interactions, storing it on one centralised database, accessible to all. A strong CRM database helps develop a successful, modern, customer-facing business.

In this article we will explain what a CRM database is, what type of data to collect and how to utilise it to benefit your business.

What is a CRM database?

A CRM database integrates tools to improve customers’ experience and plan sales and marketing strategies to develop your business. It centralises customer information to make it easier to manage customer relationships.

All staff dealing with customers at any point can access the same information, including how they interact with the business and where they came from.

CRMs provide insight into what their next step might be, helping your team plan the next customer engagement. A connected CRM means all staff can access customer data from any supported device and collaborate on new sales and marketing strategies.

Why do you need a CRM database?

Customers contact your business in multiple ways, including phone, email, social media and messaging apps. Rather than searching emails, spreadsheets and call logs for information, in a CRM database all customer touchpoints can be stored together for all stakeholders to access.

This creates consistency in dealing with customers and helps efficiently organise customer data, accurately manage orders, create useful reports and can increase sales.

“Many small companies struggle with keeping track of customer conversations and details but the fix is to implement a CRM,” said Connor Gillivan, an SEO expert and founder and CEO of Trio SEO. “CRMs help track what customers like, which helps understand needs to tailor offerings better. It builds customer loyalty and encourages repeat buying.”

According to data from WebFX, 74% of businesses say CRM software gave them improved access to customer data and 91% of businesses with 10 or more employees use CRM systems.

“I’ve seen how powerful CRM systems can be, especially for small businesses, when it comes to managing customer data,“ said Justin Chia, a data analytics expert and founder of Just Jooz.

“We rely on CRM databases to assist us in understanding what topics interest our customers and where we can improve.”

The origins and essence of CRM databases

CRMs are categorised as modern, but their characteristics are as old as when salespeople first began targeting repeat customers and needed to know who their customers are, where they are based and what they want to buy.

They are seen as modern because nowadays CRMs utilise technology and online systems. They evolved during the 1960’s with the adoption of automated accounting systems and accelerated since computers, the internet, and then mobile and ecommerce evolved over the last 25 years.

By the late 1990’s CRMs were often contained in spreadsheets and used by managers to understand a company’s sales spread, cash flow forecasts and to plan. Modern CRM systems are complete databases, charting every aspect of a customer’s interaction with a business to enable companies to pinpoint how to win and retain customers and what products to sell.

They have become vital in fostering better customer relationships and driving organisational success. A CRM database brings clarity to what otherwise could be a confusing set of key information, to centralize and manage customer data effectively. It links sales, marketing and customer support processes to create an overall view of the customer experience and promotes customer retention.

What types of CRM databases are available and what are they used for?

There are three main types of CRM database.

• Firstly, open-source CRM databases. These can be downloaded online and added to a company’s own servers. They enable a company to customize their own CRM system. They are often free and usually cheaper than other options, which means many only offer basic functionality and require work to reach the level of functionality your business needs. With this option, it helps to have a dedicated IT resource to manage the CRM system.
• Cloud-based CRMs are easy to use and require little or no set up resources, as they are online and run by service providers using a SaaS model. Users can log in from anywhere. Payment is usually via a monthly fee and businesses can add or remove features as required, linked to what they can afford and how business needs evolve.
• On-premise CRMs are stored on a company’s own servers, so require dedicated staff to install, manage and maintain. They usually have more features and options but are the most expensive option, as you buy the software upfront.

Types of CRM data

CRM databases supply data from other sources in several ways. There are three main data categories, though some CRM tools can manage all three.

• Operational CRMs organise sales, marketing and customer service functions. This could include actioning customer support requests.
• Analytical CRMs help business managers plan how to serve customers better and understand the link between different types of data to make better strategic decisions.
• Collaborative CRMs distribute data to relevant business units across an organisation. This allows all staff to access information at any point to help them with their specific role and ensure all customer interactions are accessible, reducing duplication.

What are the most valuable types of CRM data?

The impact of a CRM database is affected by the quality of data entered into it and how it is used. Modern CRM systems are so well connected, they have many ways of being effectively utilised to market products, deliver sales leads and improve customer satisfaction.

“Bringing in CRM software isn’t just a case of adding new tools, but a plan to change how a business works with customer information,” said Gillivan.

• Core data, useful for many purposes, includes what source has driven the customer to your business, where they live, what they are looking to buy and what stage of the customer journey they are on.
• Information on how customers prefer to be contacted is available. By using this, a business not only avoids annoying the customer but increases the chances that their messaging will be seen.
• Customer contact details are very valuable as they allow your business to target a customer with marketing messages. Having this information stored centrally allows different parts of your business to access the data for separate purposes and for it to be updated when necessary.
• All customer interactions are presented on a CRM database. This means customer service agents have the tools and data to solve almost any problem and have the full picture when dealing with a customer.
• Sales leads are another critical dataset. As leads are entered into a CRM system, they can be distributed to the right salesperson. They can also be updated and repurposed, tracked for progress and contain the latest relevant information.
• Sales leads link to other areas that can be automated through a CRM. Sales order processing, order tracking, deliveries and eventually invoicing can be automated to develop a lead into revenue. This gives your team more time to focus on the customer.
• Marketing strategies benefit from CRM automation. Teams can segment customers to target accurately and pinpoint the right audience to deliver personalised and effective marketing campaigns. These campaigns can be monitored for success rates and flexed if required, based on the data.
• Sophisticated customer segmentation is available via CRM databases, from the location of customers to more nuanced information, like whether they have accessed a specific, targeted offer.

Therefore, CRM reporting and analytics present the end result of all customer data entered and then utilised, creating a self-reinforcing, accurate and compliant tool to promote best practice and sales growth for businesses. Companies can use CRM data to calculate KPI’s and build strategies for sales and profit growth.

A CRM database collates all customer data. It provides tools to extract this information for a range of purposes, to be used for almost any type of business strategy.

Using the data allows businesses to create actionable insights. By organising customer data within the CRM system, you can target and capitalise on all stages of the customer’s journey, from how they find your business, their purchase history to ways to re-engage with the customer.

By understanding this process and how it integrates with the CRM database, businesses can decide what type of information is stored. The CRM can then link to different systems to build a fully rounded view of each customer, updated automatically from new interactions.

How do CRM databases capture data?’

Customer data can be captured from multiple sources, including emails, phone calls, instant messaging social media channels, TrustPilot reviews as well as sales, returns and spreadsheets. This diverse data covers customer interactions, feedback, transactional data and much more.

A CRM system has all this data in one place, accessible for all business representatives to access it as required. To do this efficiently the CRM needs to be linked to secure data migration processes.

Moving data to a CRM database can be a complex task that needs to be tested before full roll-out. The value of your CRM database is dependent on having quality, trusted and compliant data. Sanity-check the data manually to ensure it is correct, makes sense and is useful. Ensure no data is corrupted or formatted incorrectly.

Once any teething problems have been ironed out, there should be an ongoing, automatic supply of accurate data for your team to utilise.

Step 1: identify the data sources

Identify what data sources your business wants to automatically enter the system and how this integrates with the CRM to populate parts of the system that can be transferred into useful, meaningful reports and data sets. Getting this right helps ensure you have the correct external data sources to create comprehensive customer profiles.

Step 2: decide who owns the data

Once you have a system that accurately collects data, it needs capabilities to maintain it, so data remains relevant for business needs. Task one of your team to explore data governance to clarify who owns the data, how it should be used and stored securely.

Step 3: manage the data

Invest in data automation tools to keep data updated automatically, correct errors and use tools to simplify data edits to maintain a CRM database. Give someone responsibility for creating reports that identify and analyse the scope, efficiency and success of the CRM system’s performance.

Safe handling of customer data

All data captured must be handled and stored compliantly, taking account of GDPR and other data laws. Businesses can be harmed if data is breached or leaked and customer trust is hard to win back.

If you use your own system, you need an IT resource to keep data safe, secure and free from malware and other threats.

You must also ensure data is compliant with regulations for the jurisdictions your business operates in and use data legally and in compliance with privacy laws. Your business should know exactly what data it holds and how it can be used.

This not only maintains compliance but also ensures you get quality insights and results from a CRM database, to track all customer data, access it as required and utilise it effectively.

How to use CRM databases

How you utilise a CRM depends on your goals, but the right system will offer flexibility to customise and create tailored marketing strategies for customers or products.

With all customer data in one place and the ability to customise workflows, CRMs can be used to build repeatable marketing messages or sales processes. These can be flexed as required. Other uses include automating manual tasks, modifying strategies to utilise sales leads, creating bespoke product campaigns, updating new customer contact details and monitoring sales and returns.

“I came across a small digital marketing company encountering difficulties in monitoring client communications and engagement,” said Chia.

“They employed a CRM system, which transformed their business as they could retrace every interaction with clients and utilise that data to personalise their services.”

A CRM system can help managers manage their team, assign new tasks, monitor performance and track business metrics automatically.

They can be utilised for customer service purposes. Centralised customer data means staff can solve problems easily and quickly, avoiding information requests from multiple sources or repeating requests. Customers deal with fewer people which improves customer satisfaction.

Conclusion

There are different types of CRM databases that are suitable for various types of business, depending on budget and human resources. They can be used for separate purposes by managers, sales staff or other areas of the business.

A CRM database centralises all customer data that comes from each customer touchpoint. This provides a method for a business to reach out to customers at the right time, with the correct message for where they are on their journey with your business.

It improves customer satisfaction because each time they contact your business, the person they deal with should be able to see the whole picture and deliver relevant information or take appropriate action based on the customer’s actual experience.

A CRM database provides opportunities for marketing, gaining and retaining customers and the ability to target customers based on a complete view of their needs, what products they buy and how they prefer to be contacted.

A well-managed CRM database is a key resource and strategic asset for businesses seeking to enhance customer relationships and drive sustainable growth.

“A CRM database isn’t just an upgrade – it’s a choice that can rewrite how a business interacts with clients,” said Gillivan.

Benjamin Salisbury - business journalist

Benjamin Salisbury is an experienced writer, editor and journalist who has worked for national newspapers, leading consumer websites like This Is Money and MoneySavingExpert.com, business analysts including Environment Analyst, AIM Group and written articles for professional bodies and financial companies. He covers news, personal finance, business, startups and property.