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Customer Database


A customer database is a key data repository used by companies to manage their customer associated data. Coupled with the need to harvest value from customer data, companies now need to govern data well to prevent data loss, and the quality (and integrity) of data from degrading over time.

The role of customer databases

As a matter of fact, the role of a customer database has changed. A decade ago, they were seen to be the place to hold customer records. that might include name, address, contact notes, sales records, quotations etc. Nowadays, a customer database is actually a data mart that harvests data from operational systems used to record customers. Good systems avoid re-entry of data and simply leverage data that already exists.

Opportunities to improve the management and governance of customer data have massively improved over the past decade thanks to innovations in big data, cloud computing and artificial intelligence. It’s no longer necessary to manage data in structures like relational databases. In light of the low cost of data storage flat file structures are adequate to manage data.

Business benefits

An effective customer database benefits your business in the following ways:

  • Creates a single-view of customer associated data across your enterprise to ensure that you’re always looking at a single version of the truth.
  • Protects and governs customer data to prevent data loss and non compliance; particularly important owing to a hardening of financial services and personal information compliance risks
  • Presents your management team with key actionable insights so you can make decisions to prioritize budgets and efforts, fine-tune processes and improve how your business works to improve customer experience
  • Facilitates the simpler automation of escalations when activities don’t happen that impact on customer relationships.

Why a customer database is business critical

Say nothing of the missed sales growth opportunities lost by NOT understanding your customers through their data interactions, managing customer data has become essential in protecting businesses against non-compliance fines. Comparatively small customer data loss events can have a seismic impact on companies if they relate to personal data. The General Data Protection Regulation (GDPR) of the European union imposes fines to the tune of up to £4 million or 4% of global company turnover if organizations are seen to be non-compliant.

Where it fits in Customer Data Management

A customer database is the central technology building block of any Customer Data Management (CDM) strategy. CDM is the discipline of managing the value of customer data. Coupled with the application of customer data to make informed decisions, customer data management is employed by companies to improve their customer experience and maximize customer value.

Customer Data Management is a key aspect of modern Customer Data Science; the business discipline of using data to develop an appreciation of customers, their challenges, touch-points, buying preferences, behaviors and metrics.

It is an aspect of Customer Experience; a term used to describe the relationship a customer has with a business. Customer experience refers to the total of all experiences the customer has with the business, based on all interactions and thoughts about the business. Equally important, it is an all-encompassing term. Without doubt, business leaders see Customer Experience as an important topic these days with so much emphasis placed on data-driven decision making. Additionally, customer experience is an important aspect of creating an above and beyond customer experience.

It includes communications touch-points, communications, emotional experience, behavior, data management, customer data platforms and technology ecosystems, and business model design implications. NDMC Consulting is an expert consultancy business specializing in customer experience strategy, management and customer data platforms.

What to expect in a customer database implementation

One might expect any customer database to hold records of customers that represent a single version of the truth, including their name, location and contact details, account details and so on. You might expect some categorization of customer records by size, wealth, demographics, account status and industry. But your customer database should go further than merely hold rudimentary data that any mobile phone contact record can store today.

These attributes say nothing of the opportunity and value of the relationship. A modern customer database should therefore present a lifetime view of your customer relationship from the first point of contact to present day. It should include a record of every interaction and transaction. Additionally, your application should be able to uncover key metrics of the customer relationship not limited to the products and services they’ve purchased, revenue and profitability of the account. Advanced insights should include insights into the relative importance of the account to your business; its worth today and potential for tomorrow. To gain accurate profitability statistics, systems should consider the total cost of sale, customer service and account management overheads relating to the relationship. Such insights help managers to know which products and services are popular within particular groups, and this helps to fine-tune an effective go-to-market approach.

About NDMC

NDMC has delivered projects focused around the subject of Customer Data Science since 2003. Many of our clients required more clarity over their customer profitability and buying behaviours. Furthermore, they found the use of many different software tools as being unhelpful in decision making. In the light of cloud computing advances, it’s now possible to create overarching digital platforms to harvest, process and analyze customer-related data. As a matter of fact, most data used in the enterprise is customer-related – it just takes a re-invention of data architectures to realize it!