CRM Database: What It Is & How It Improves Customer Relationships Best Practices by Jen Ribble December 01, 2022 Whether customers engage with your company via email, social media, live chat, or phone, they expect every interaction to feel personal and cohesive. Delivering that kind of experience at scale requires a lot of data, but every interaction also generates new data that can be used to optimize customer relationships and improve business results. Managing massive amounts of customer data effectively is no small task. That’s why customer relationship management (CRM) solutions are so critical. Companies everywhere rely on CRM platforms to manage customer interactions and power key business functions, and most CRM tools include sophisticated databases to store and organize customer data. What is a CRM database? The CRM database is a fundamental component of customer relationship management software. It collects data from every interaction between the company and its customers and makes that information available across the organization. While you may hear the terms “CRM” and “CRM database” used interchangeably, they actually refer to different things: The CRM is a software platform that serves as a system of record for sales, marketing, service, and support teams. It’s used to manage activities throughout the customer lifecycle and provide a complete view of customer identity, history, and preferences. The CRM database is the central resource or “container” for managing data within the CRM. It’s used to collect, store, organize, analyze, and share information about every customer, prospect, partner, and contact. It’s understandable that these terms have been conflated. After all, the CRM has little value without the CRM database. Think of it this way: the CRM is the engine that drives sales, marketing, and service processes, while the CRM database is the fuel that makes the engine run. What kind of data is stored in a CRM database? Every company has its own way of doing business, with unique processes and individual uses for customer data. That’s why your CRM database must be flexible enough to include whatever data your business might need. In general, the information in CRM databases falls into three broad categories: 1. Identity details. This includes basic contact information and other details about your customer’s identity, as well as personal insights that might help to close a deal or maintain a healthy relationship. Contact information Name Email address Phone number Social media profile Job title Company name Location Business type/industry Company size Lifestyle information Spouse or kids’ names (or even pets) Birthday Hobbies Favorite sports team 2. Customer interactions. This includes details on the customer’s history with your company, from the first contact through every subsequent interaction. Source of first contact Communication records Date of first contact Date of most recent contact Time of contact Reason for contact Frequency of contact Customer support/service history Campaign interactions Browsing behavior Subscription/opt-out status Survey responses Feedback/product review history Engagement level 3. Purchase history. This includes information on customer buying behavior, which provides key insights into each customer’s preferences. Items purchased Products/services currently in use Payment history Renewal schedule Customer anniversary date Loyalty/tier level Of course this list isn’t exhaustive, but it provides a good overview of the data that is typically included in a CRM database. A robust, well-maintained CRM database provides a complete picture of who your customers are, their history with your company, how they prefer to engage, and what they might want from you in the future. Structuring Your CRM Data Thorough and effective IT management is necessary to maintain an organized CRM database — and the first you need to know is how to structure your CRM. The quality of the reports you generate is directly linked to how well-organized your data is. What’s more, clean data means your team can put Insightly’s CRM data to use more effectively and profitably. Below is a guideline for how to structure CRM data, but keep in mind that each company should customize its own structure according to organizational goals and processes. Lifecycle Data One crucial area to gather data is around the sales lifecycle, which involves categorizing leads according to how sales-ready they are. Stages of the customer journey can include: Prospect Contact Lead Subscriber Marketing qualified lead Sales qualified lead Opportunity Customer Long-time client Closed A prospect is someone who has given you their contact details, while a long-time client is loyal to your company and recommends it to others. This type of data is always in flux as your prospects move through the sales process, unless they’ve decided to opt out. Lead Status Understanding where your leads are in the sales process helps you approach them in the most impactful way. CRM data offers excellent insights into the status of your leads in your sales pipeline, in real time. With Insightly, you can add as many lead statuses as you need depending on the steps in your sales process, but there are five default statuses: Open — not contacted Open — attempted contact Open — contacted Closed — disqualified Closed — converted Custom lead statuses could include “downloaded e-book,” “send email” or “bad timing.” Custom Fields Every company will have a similar basic data structure that includes the above categories, but your business will require its own unique custom fields. You can use custom fields to store all data relevant to a specific point in the sales process or customer journey. Some ideas for custom data fields include: Client birthdays, special anniversaries or company information that helps salespeople provide personalized, targeted pitches High spending customers, buyers who have been using your company for a set period and customers who have given high CSAT ratings are custom fields that can help you target your marketing spend more effectively How does a CRM database benefit your business? The database within your CRM is a powerful tool for managing the sales process, powering marketing automation, and enabling better customer service. When leveraged and maintained appropriately, it provides a wide range of top-line benefits for any organization, including: Consolidate and organize important customer data. Having a centralized CRM database eliminates departmental silos and allows cross-functional teams to quickly access the information they need. Sales reps no longer need to manually maintain contact information for their leads and prospects, because it’s all housed in the CRM database. Marketing teams can easily get the data they need to create engaging campaigns, and service teams have instant access to communication records for seamless relationship management. Connect data from multiple sources. Modern businesses collect customer data from a wide variety of sources — from browsing history and purchase behavior to social media interactions and support calls. The CRM database allows you to connect this disparate data in a single location, providing a holistic view of every customer. Unify remote teams. In the wake of the COVID-19 pandemic, many companies are struggling to manage newly remote or hybrid workforces. Communication and knowledge sharing are exponentially more difficult when teams don’t share the same physical location. A cloud-based CRM database ensures that every team member has access to the same customer data, no matter where they are. Reduce manual data entry. Many CRM systems offer automated data capture capabilities, which automatically extract data from customer interactions and log it into the CRM database. By taking the repetitive manual work out of relationship management, you can free up sales and service teams to focus on higher value tasks. Speed up the sales process. Every company wants to find ways to speed up how quickly leads move through the sales process without compromising on quality — but it’s not easy. The fast access to customer data a CRM affords sales reps can help you meet customers’ needs and establish a rapport quickly. When it comes to having a competitive advantage, speeding up your sales process can be a game-changer. Personalize customer experiences. Another effective way to gain an advantage over competitors is by offering personalized service and using insights to establish an emotional bond with customers. CRM data is a great way of enabling your team to offer a personal touch because it allows employees to learn in-depth insights into customers’ needs and preferences. You can use techniques such as data mining, customer profiling and journey mapping and measure the success of each using your CRM’s built-in analytical tools. In turn, when your data is well-organized, analytics help you refine and deliver a continually improving, tailored experience that exceeds customer expectations. Ensure compliant governance ensuring privacy and appropriate access. Data is a precious commodity, and you have a responsibility to protect privacy and grant appropriate access to it. Having a data framework makes it significantly easier to comply with data governance and ensure you protect data according to regulations. You can also set access controls to ensure access to data is only granted to those who require it and can’t easily fall into the wrong hands. Access CRM analytics. Your CRM gathers vast quantities of actionable data, and data analytics can help you improve sales, marketing, customer service and more. You can drill down and identify areas of customer satisfaction and dissatisfaction, make changes to business processes accordingly and use analytics to test how effective your changes are. CRM analytics also help you accurately spot trends, understand people who interact with your brand and track how successful marketing campaigns are. Your CRM database can be instrumental in improving customer relationships Clearly the CRM database is much more than just an organizational resource for storing contact information. In fact, insights from your CRM database can help you develop more impactful strategies for customer-facing teams and connect with customers on a deeper level. Here are a few examples: Deliver a seamless end-to-end customer experience. From the initial contact through purchase and post-sale support, a robust CRM database provides deep insights to help your sales, marketing, and service teams create an easy, cohesive experience for every customer. You can even leverage CRM data to build customer journey maps that represent buyer behaviors and decision making processes. Improve customer communications. A well-maintained CRM database puts your entire history of customer communications in one central location. Analyzing these interactions can help you make more informed decisions about future communication efforts and deliver engaging, consistent campaigns that strengthen the customer relationship. Maximize personalization opportunities. Standing out from the competition requires something extra in today’s crowded marketplace. The information in your CRM database lets you take personalization beyond simple First Name/Last Name and ensure every interaction feels personal and relevant. Make predictions about customer needs. Your CRM database can help you better understand your customers and their preferences. Armed with these insights, you can more accurately predict which products and services will best meet a customer’s needs. You’ll also be in a better position to anticipate support requirements, which can improve your marketing and communication strategy. Identify ways to improve service delivery. CRM data provides a window into how customers are using your products, their satisfaction levels, and common service issues. Monitoring data related to service and support can also uncover delays in response time and other service problems that can erode customer loyalty. CRM database: a powerful tool for sales and revenue growth The data in your CRM can help drive smarter decision making and improve processes throughout the customer lifecycle—all of which directly affect your bottom line. Here are just a few of the many ways your CRM database can have a meaningful impact on business results: Segment audiences for more targeted campaigns. A robust CRM database provides deep, granular insights about audience demographics, geographic location, interests, product preferences, and much more. Marketing teams can use this information to segment contact lists based on similar characteristics and deliver relevant, targeted campaigns that drive more conversions. Optimize sales processes. Well-organized CRM data helps improve sales efficiency by putting the information your sales reps need at their fingertips. Perhaps more importantly, because your CRM database captures data from every action in the customer journey, it can help you analyze the overall sales process and identify pain points, bottlenecks, and other issues that may result in lost deals. Find your highest-value customers. It’s worthwhile to dedicate extra time and attention to your most profitable customers, but it’s not always easy to figure out who they are. Your CRM database can help you create a tier structure to prioritize your most loyal customers—those who spend the most and continue buying long term. It can also help to identify customers with frequent complaints and support requirements that could harm your bottom line. Identify opportunities for cross-sell and upsell. When you have access to each customer’s purchase history and preference data, it’s easy to spot trends and opportunities. Leverage your CRM database to promote related products that complement a customer’s previous purchase or watch for opportunities to recommend an upgrade to a premium product. Increase retention/reduce churn. Remember, retaining customers long term is just as important as acquiring them in the first place. Your CRM database provides insights into customers’ most critical needs, the problems they need to solve, and their experience with your company. Show that you understand your customers—though more meaningful communications and better customer service—and they’ll be less likely to turn to your competition. Super-charge sales reporting and pipeline forecasting. The CRM database lets you capture data from every sales activity in a single, central location, where it can be leveraged for deep sales analysis. Sales leaders can easily monitor deals and pipeline, track and score leads, assess progress toward KPIs, and deliver accurate revenue projections to the executive team. Integrate other business-critical technology. Connecting your CRM to other business tools—like your ecommerce platform, social media tools, marketing automation platform, call center system, and even Google Analytics—allows you to pull even more information into your CRM database. In addition, integrating tools across your organization ensures every team can access the same consistent data and deliver a seamless experience at every touchpoint. 5 tips to maintain your CRM database The bottom line is, your CRM is only as good as its data—but it can be tough to maintain your CRM database and keep it performing efficiently over time. Here are a few tips to keep your CRM database as clean and useful as possible. Establish role-based access levels. Data comes into your CRM database from multiple sources, and it can be manipulated by any number of people. Allowing open access to CRM data creates the potential for errors and inconsistencies, so it’s smart to define user roles with varying permission levels. This way, you can give each user the ability to view and/or edit the data they need to do their jobs effectively without compromising data quality or security. Create rules for mandatory fields. Customer data is less valuable when it’s incomplete—but sales reps are always in a hurry, and data entry can be tedious. To avoid incomplete records, identify which fields are most important as part of your CRM database setup process. You can then create rules within the CRM to make these fields mandatory. Practice good data hygiene. Regular maintenance checks can help to ensure that your CRM database is accurate, organized, and up to date. Schedule periodic data cleanup audits to: Eliminate duplicate records Fill in incomplete records Merge related records Remove outdated contacts Check formatting consistency Delete unneeded data fields and tags Invest in automation. Many CRM vendors offer automated solutions to streamline CRM database management, including data entry, duplicate record cleanup, and more. These automated tools can help you save time and make CRM database maintenance easier. Follow best practices in data governance. Data governance is a collection of policies and processes to help organizations use their data effectively and efficiently—and that includes CRM data. A well-crafted data governance strategy will help to ensure the quality, integrity, and security of your CRM database. All CRM databases are not created equal A high-quality, high-performance CRM database empowers companies to drive more sales and deliver an exceptional customer experience every time. The key is to ensure your CRM database contains all the right data—and that it’s accessible to everyone who needs it. The Insightly platform was purpose-built with a single, common database that powers three user-friendly business applications: Insightly CRM Insightly Marketing Insightly Service While other platforms offer bolt-on solutions that share data via integrations—which are prone to breaking—Insightly tools share data seamlessly because every app draws from the same common database. This unified solution aligns cross-functional teams like sales, marketing, and customer service while providing a single, comprehensive view of every customer. Get started with a free trial of Insightly CRM today, or request a personalized demo to see this modern, scalable solution in action. Customer Journey | Customer Relationships Jen Ribble Jen Ribble is a marketing veteran with more than 20 years of experience, specializing in B2B SaaS. After a decade creating content in-house for top marketing technology firms, she launched her own marketing content agency, Jen Ribble Writes.