What Is a CRM Database and Why Do You Need One?

What is a CRM database? A CRM database is a tool that lets you gather and store all your customer data in one location so you can easily view, organize, and analyze it.

For your company to drive revenue, you need to make sales—that’s Business 101. But not every company realizes that the key to sales is knowing your audience. By becoming familiar with the people you sell to, you’ll be able to market to them much more effectively.

The question is, how do you get to know your audience better? Easy—by analyzing customer data. Your customer data can tell you a ton about your audience. But with that data spread out across a hundred different sources, it can be hard to analyze.

That’s where CRM databases come in. With a CRM database, you can learn far more about your audience. But what is a CRM database? Keep reading to find out! 

What is a CRM database?

A CRM database is a platform designed to let you store all your customer data in one place. It stands for “customer relationship management database.”

How does a CRM database work?

The way it works is that it integrates with all the third-party platforms where you generate customer data, and it then imports that data into the database. Within the database, you can then organize that data however you choose.

Also, it’s worth pointing out that CRM databases rarely stand alone. Usually, they’re part of an overall CRM platform that also includes other tools and features for analyzing and acting on the data you gather—the database itself is just one piece of the puzzle.

Benefits of a CRM database

There are a few different benefits to using a customer relationship management database, but the biggest one is that—as we suggested earlier—it helps you learn more about your audience.

As you gather data about your customers, you can spend time analyzing it to learn who buys from you and what they want. That, in turn, helps you market to them more effectively, driving more sales overall.

The other major benefit simply comes down to convenience. You certainly could attempt to analyze your customer data from its original source, but the thing is, your data is likely spread across several different tools. A CRM database gathers all of that data into one place, making it far easier to locate and analyze.

Types of CRM databases

There are a few different types of CRM databases out there. Those types mainly differ from each other in regard to how and where the data is stored.

Here are the three main types available.

1. On-site databases

On-site databases, also called on-premise databases, are stored directly on your company’s servers—hence the name. These tend to be very expensive and complex, and more often than not, it’s large enterprises that go for them. They usually require a whole team of specialists to maintain.

2. Open-source databases

Like on-site databases, open-source databases are stored on your company’s servers. However, they’re usually far less expensive—many of them are even free.

Of course, the drawback is that they tend to take a lot of work. There’s no team provided to help you manage open-source databases—you have to do it all yourself. That includes handling things like data security.

3. Cloud-based databases

Finally, you have cloud-based databases. In today’s world, most of the big-name CRMs are cloud-based. These databases aren’t stored on your servers—they’re kept in the cloud, as the name suggests.

The advantage of cloud-based databases is that since they’re stored online, you can access them from anywhere, not just your business premises. These databases are usually sold by well-known companies that provide customer support, making them easier to manage.

What else can a CRM database do?

As we mentioned earlier, CRM databases rarely stand totally on their own. Most CRMs contain additional tools and features on top of the database, enabling you to do more with your customer data than just store it. Here are a few features you can expect to find in most CRMs.

1. Lead communication

One thing you can use CRMs for is communicating with your leads and customers. Many CRMs will let you run email and SMS campaigns right from the platform, not to mention setting up phone calls and meetings.

Of course, you could do that in another tool, but the convenient thing about doing it in a CRM is that you can base it on the data you’re already pulling in. Your CRM is already tracking when leads hit certain checkpoints, so why not go ahead and rig it to send out emails at those checkpoints, too?

2. Sales automation

Building off the last point, CRMs often come equipped with sales automation capabilities. We just mentioned email marketing, and that’s one area you can automate—your CRM can send out emails automatically rather than you having to manually do it each time.

On top of that, your CRM can automate the data collection process, pulling in data from different sources automatically. That’s far easier than you going and manually copying everything over from each platform.

3. Data analytics

Finally, the best CRMs come with data analytics features. After all, the entire point of gathering all that customer data is to learn from it. The last thing you want is a CRM that gathers all that data and then lets it sit there unused.

Most CRMs will allow you to generate, at the very least, basic sales reports so you can see trends across your customers. More advanced CRMs will also let you generate custom reports on different metrics and groups of customers.

Nutshell is the perfect customer database for your business

Looking to find a customer database for your company, but unsure where to start? Look no further—Nutshell is the ideal choice.

Nutshell has everything you could want in a CRM. On top of our expansive CRM database, we offer all the features listed above—lead communication, sales automation, and data analytics—and we make it incredibly easy for you to sort your leads and customers in our platform.

On top of that, we offer top-of-the-line customer service. Don’t believe us? Just check out our 14-day free trial to see what Nutshell can do for your business!

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