To manage customers, organizations should follow some sort of approaches

like segmentation or division of customers into groups because each customer

has to be considered valuable and profitable.
In this lesson, you will learn about the concept of Customer and How to
analysis customer database.
2.1 CUSTOMER INFORMATION DATABASE
The "database" is usually name, address, and transaction history details from
internal sales or delivery systems, ora bought-in compiled "list" from another
organization, which has captured that information from its customers. Typical
sources of compiled lists are charity donation forms, application forms for any
free product or contest, product warranty cards, subscription forms, and credit
application forms.
The communications generated by database marketing may be described as
junk mail or spam, if it is unwanted by the addressee. Direct and database
marketing organizations, on the other hand, argue that a targeted letter or e
mail toacustomer, who wants to be contacted about offerings that may interest
the customer, benefits both the customer and the marketer.

Whatis aCustorner Infomation Datcbase?

A customer information database is a program of stored information that is
relevant and useful to the success of your business. Customer information
database programs can be used as standalone software, incorporated with
existing databases, such as outlook or excel, or a combination of the two. What
a customer information database may hold can vary greatly due to the type of
business, the focus of marketing, and the direction in which the business is
going. A customer information database can be used for customer information,
employee tasks, marketing plans, and a variety of other daily business
functions.
Custamer Infomtion Database Custamer Infarmaton
The most often used information in a customer information database is the
customer information. This can include personal information, such as contact
addresses and phone numbers, as well as family size, location, and other
demographic information. Many companies also use their customer
information database to record purchase information,
Service calls, customer support needs, and even warranty information.
Anything relative to customer interaction can be placed in a customer
information database.

Custamer Informaian Database Empdoyee infarmation

The customer information database can also be a hub for managing your
employees. Vital information can be stored within the customer information
database, such as employee id files and commission information. Also, some
employers and managers find it useful to assign tasks, check progress, and
monitor the sales records of their employees through the customer information
database. The customer information database can be a manager's second set of
eyes, as to the productivity and motivation level of their employees.
Custome Infomation Datatase Other Uses
Another popular use of a customer information database is within a business
marketing plan. Because of the detailed records kept on the customers and their
buying habits, many businesses find their customer information database to be
their best marketing tool. It is easy to create reports on buying trends and habits
and focus marketing strategies to best fit these needs using the information in
the customer information database. Other companies use the customer
information database information to track sales and create goals for their sales
team. Depending on the specific needs of an organization, there are plenty of
different uses for the customer information database to discover or design.
Companies use the customer information database to gather information and
details about their customers, including their needs and purchasing history.The
customer information database can also be used to track employee sales and
success rates, as well as task lists and completion. Many companies incorporate
their customer information database into their marketing and advertising plans.
As the information entered into a customer information database is
customizable to your own business,
Capturing data on customers is essential to capitalise on your knowledge of
their purchasing habits, and may lead to further business.
But a database is only as effective as the last time the information was checked
and updated, and good database management is essential. Everyone knows
how irritating it is to receive a wrongly addressed letter. This can imply that if
your business cannot get an address right, how good can it be at providing a
service or selling a product?
Chocsing Sgtware
Selecting the right database software is important, ideally it will give you a
flexible system which allows for growth and expansion, and will produce
reports and relevant data on a range of queries. The wrong software will tie you
up in database management for far longer than necessary and you could end up
inputting only information which your database can handle, defeating the
objective of flexible data management.
Infrmation Selectian
Deciding what you want your database to do will generally dictate the
information it should hold. Essential information will include:
Name and address
 Salutation
Use or otherwise of first name
Job title/company name
Contact details (home/work/mobile numbers, fax, e-mail)
Date information was last updated
Consumer demographic
Industry/commercial sector
Details of last purchase Other relevant details to your business
Last contact made with customer (and marketing material sent)
The more you break down the information, the more flexible your database
will be. For instance, put the first and last name into two fields, with the
salutation in the third. Another field should be created for 'use or otherwise of
first name', which can be selected when you are sending a letter to all those on
your database. Some contacts will be unfamiliar to you and should be
addressed formally, while others will be offended if you didn't use their first
name.

Using Heldinformatian
Whether you are using the database as a marketing tool, mail merging with
sales letters and producing labels, or gathering information on the purchasing
trends of your customers, you should be able to sort and view the information
in an easy format. This will enable you to produce printed reports for your staff
and sales force to work from.

Database Security
It is likely that you willwant the majority of your staff to view the database
and run simple reports, however it is important to have only one or two people
managing and inputting information. This will help to maintain the integrity of
the information held within the database.

It is good practice to set up password access to the database, this way you will
prevent unwanted users fromn looking at your customer information - this is
particularly crucial if your staff use laptops.
Backing up your Dattbase
Back up the database frequently and keep the backups in a safe place.
Recreating an up-to-date database is impossible and lost or damaged data could
prove a serious setback to your business.
Sources of Data
Organizations of any size can employ database marketing; it is particularly
well-suited to companies with large numbers of customers. This is because a
large population provides greater opportunity to find segments of customers or
prospects that can be communicated with in a customized manner. In smaller
(and more homogeneous) databases, it will be difficult to justify on economic
terms the investment required to differentiate messages. As a result, database
marketing has flourished in sectors, such as financial services,
telecommunications, and retail, all of which have the ability to generate
significant amounts of transaction data for millions of customers.
Consume Data
In general, database marketers seek to have as much data available about
customers and prospects as possible.
For marketing to existing customers, more sophisticated marketers often build
elaborate databases of customer information. These may include a variety of
data, including name and address, history of shopping and purchases,
demographics, and the history of past communications to and from customers.
For larger companies with millions of customers, such data warehouses can
often be multiple terabytes in size.
Marketing to prospects relies extensively on third-party sources of data. In
most developed countries, there are a number of providers of such data. Such
data is usually restricted to name, address, and telephone, along with
demographics, some supplied by consumers, and others inferred by the data
compiler. Companies may also acquire prospect data directly through the use
of sweepstakes, contests, on-line registrations, and other lead generation
activities.

Business Data
For many business-to-business (B2B) company marketers, the number of
customers and prospects will be smaller than that of comparable business-to
consumer (B2C) companies. Also, their relationships with customers will often
rely on intermediaries, such as salespeople, agents, and dealers, and the number
of transactions per customner may be small. As a result, business-to-business
marketers may not have as much data at their disposal as business-to-consumer
marketers.

One other complication is that B2B marketers in targeting teams or "accounts"

and not individuals may produce many contacts from a single organization.
Determining which contact to communicate with through direct marketing may
be dificult. On the other hand it is the database for business-to-business
marketers which often includes data on the business activity about the
respective client.
These data become critical to segment markets or define target audiences, e.g.
purchases of software license renewals by telecom companies could help
identify which technologist is in charge of software installations vs. software
procurement, etc. Customers in Business-to-Business environments often tend
to be loyal since they need after-sales-service for their products and appreciate
information on product upgrades and service offerings. This loyalty can be
tracked by a database.
Sources of customer data often come from the sales force employed by the
company and from the service engineers. Increasingly, online interactions with
customers are providing B2B marketers with a lower cost source of customer
information.
For prospect data, businesses can purchase data from compilers of business
data, as well as gather information from their direct sales efforts, on-line sites,
and specialty publications.
2.1.1 Developing and Maintaining Customer-Related Database
The database is a repository of collection of files (or tables). The files contain a
number of records (or rows of the table), which in turn contain various fields
(or columns of the table). Each file contains information about a topic such as
customer, sales, products, etc.
The steps given below are followed to create and maintain a customer-related
database
Identify required information

ldentify information sources

Design and write database functions

Select database technology and hardware

platform

Populate the database

Maintain the database

Update/Delete/Add records

The database always needs to be very accurate and up-to-date.

2.1.2 Types of Customer Data
There are mainly two types of CRM data - Primary and Secondary. The
primary data is the one which is collected for the first time. The secondary data
is the one which has been collected earlier.
The primary data is collected by conventional means such as conducting
surveys, holding a skill competition, inviting the customers to subscribe for the
newsletter or to register their purchase, etc.
2.1.3 Database and Hardware for CRM

The CRM software use Relational Database architecture. It is composed of

tables with rows and columns. The tables are connected to other tables by a
unique identification number stored in the ID field, named primary key.
Datatase Manggement Systens for CRM
There are many database management systems available in the market today.
Some popular ones are Microsoft's SQL server, Oracle, DB2 from IBM, etc.
These systems help to update and administer the database.
Hardvore Considerations for CRM Datatnse
The hardware platform on which the database will reside is selected based on
the following factors -
The database size.
The existing technology used in the business.
The location of CRM users. Especially in case of global use of CRM, the
multilingual users from different time zones can access the CRM for
operational and analytical purposes.
2.1.4 Data Attributes

The CRM data must have the following attributes

It must be sharable because many people need to access it from various
geographical locations.
It must be relevant means pertaining to the given purpose.
It should be most accurate. Inaccurate data wastes the marketing efforts of
the business, predicts wrong opportunities and serves the customers with
insufficient and inaccurate service. Data should be reviewed timely to
ensure removal of inaccuracy taken place while acquiring and entering the
data.
It should be up-to-date means it should store and show the latest
information.
It should be transportable from one location to other. It should be
available where the users need it. The technology of compiling and
handling data clectronically is essential for today's fast-paced businesses.
It should be secured. Businesses need to keep their data safe from loss and
theft and unethical snooping as many businesses can subscribe to the same
CRM software through the same portal.
 Exampe., look at the following query statements -
CREATE DATABASE Db Name
DELETE FROM EMPLOYES
SELECT Emp_Name, Emp_Salary
FROM Employees
WHERE Emp_Salary >= 25000

Reparts
CRM Applications generate reports on periodic basis for analyzing the traits of
sale, performance, and many other allied activities. Reports are generally
accessed by management people of the business for performance assessment.
OLAP technology is capable of showing data at a level as lowest as a
salesperson's and as highest as a region, which can be helpful to assess the
performance and question the underperformance.
2.1.8 Position of CRM with Respect to Database
After having known various types of CRM in earlier chapter, let us see which
CRM stands where with respect to the customer database
Customers
Strategic
CRM

Face-to-Face EMail Call Center Chat

Contact Contact
Collaborative
CRM

Operative Marketing Sales Force Service

CRM Automation Automation Automatlon

Data Analysis
Analytical
CRM
Customer
Database

Analytical CRM works most closely with the customer database and strategic
CRM WOrks farthest from the database.
2.1.7 Data Access and Interrogation
CRM applications allow users to interact with the database.

Example: asalesperson adds customer data the time of billing or

the customer service call is attended. Also, the users need to after
interrogate the
data for analytical purpose.
Thus, data access and interrogation is essential and is carried out by the
following three ways
Data Mining
Data mining is the process of sifting through the huge volume of data to get
most relevant information in the shortest possible time. CRM takes the help of
Artificial Intelligence to find out the solutions for the most important questions
of the business.

In the context of CRM, data mining is the application of predictive analytics to

support marketing, sales, and services. In CRM, data mining finds associations
among data, classifies the customers according to business value, and helps to
find answers of the following questions -
Which customers the business should target?
What is the cost of customer acquisition?
Which customers are buying (or not buying) the products?
Who are high/medium/low margin customers?
What profile customers are defaulting payment repeatedly?
How can a business segment its market?
Can the business offer a common price for all customer segments?

Example., an analyst of Walmart noticed that the sale of beer and

diapers is high on Fridays. Having this fact brought to the notice of Walmart,
the business kept the two products close to cach other on the shelves. This
resulted in the sale rise of both the products.
Thus, data mining helps in generating sales volumes by providing most
relevant data for marketers' analysis.
Database Queries
The queries are the tools to access and modify the database. Structured Query
Language (SQL) is used for management of RationalDatabases. The queries
come in the form of statements such as SELECT, ADD, DELETE, UPDATE,
DROP, etc.
2.1.5 Data Warehousing (DW)
Data warehouses are huge repositories of customer related data accepted
various databases. These repositories can be as much as a few from
(20 bytes). terabytes
Numerous global businesses operating from various countries and continents
generate huge volume of data. This data needs to be converted into useful
information for further operations and analysis. Data warehouse does this task
by -
Accepting the data from ETL systenm that extracts valuable data, transforms
it into a required format, and loads it into the database.
Organizing data according to subjects of business and various time periods.
Standardizing data coming from various sources in a single format.

Example: bringing salutations, codes (m/f or male/female), units of

measurement, etc. in the same format.
Conducting periodic update of data, say daily or weekly, depending upon
business requirements. It is not done in real time.
Providing updated data for the purpose of analytics, data mining, and
reporting.

CRM

Reporting
ERP
Extraction,
Transformation
and Data Analytics
Loading Warehouse
Flat Files (ETLJ

Pata Mining
Other Data
Souroes

2.1.6 Data Marts

It is the smaller version of a data warehouse which caters to a particular

business or a function. Data mart projects are inexpensive than data warehouse
projects as the volume of the data is smaller and the functions for which it is
used are specific. The costs, time, and efforts required to handle such data are
less.