What is a Customer Database? - Definition & Benefits

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  • 0:00 What Is a Customer Database?
  • 0:59 Benefits of a Customer…
  • 2:57 Challenges of Creating…
  • 4:05 Lesson Summary
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Lesson Transcript
Instructor: Tara Schofield
Maintaining a customer database is an important way to keep up-to-date on customer information and data. A database provides access to clients, builds loyalty, and encourages repeat business. Learn more about databases in this lesson!

What is a Customer Database?

The customers of a business are the most important asset a company can have. Depending on the type of industry, a company may sell to the same customers over and over. There are other types of businesses that sell to a customer once or infrequently and are constantly looking for new customers. For instance, a surgeon may do a surgery on a person one time, and that patient may never require another surgery. On the other hand, a dentist sees their patients once or twice a year on an ongoing basis. The way they interact with their customers will be different because of the need of their services.

As a result, the way a company uses customer information can be very important. A customer database is the collection of information that is gathered from each person. The database may include contact information, like the person's name, address, phone number, and e-mail address. The database may also include past purchases and future needs.

Benefits of a Customer Database

Having a customer data base benefits a company in many ways. Let's take a look at these benefits.

Businesses may ask questions of their customers to provide better service. For instance, the dentist may ask about services his patients may be interested in such as teeth whitening or classes about oral health. By collecting information, the customer database not only keeps vital information about the patient, the database can help the dentist determine how to improve his business and better meet the needs of his patients.

Having a database can help a business keep in contact with customers. This helps build loyalty and repeat business. Consistent, repeat customers can be identified and contacted with special offers that are targeted to active clients. Conversely, the database can also help identify customers who have not purchased from the company for an extended period of time or who only purchased once. This helps single out groups of customers that can be marketed to with specific offers to encourage them to come back.

In terms of the dentist, the database can help him create a list of patients who came in for one cleaning and have never been back. With this information, they can offer a special discounts or program that is designed specifically for patients they want to get back into the office. The customer database provides them with the information to market to these individuals.

Having a customer database provides access to contact information. This allows appointments to be confirmed, customers to be tracked, and clients to be contacted. Perhaps a phone call needs to be made or a letter mailed. The information to reach a customer is kept in the customer database and can easily be accessed with a few strokes on the computer keyboard.

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