What is a CRM Database?

What is a CRM Database? post image

Whilst customer information used to be stored in analogue systems, a CRM system is the best solution to manage customer data in 2024. But what is a CRM database and how can your business benefit from using one? 

CRM, or Customer Relationship Management, is the best technology in 2024 for businesses to build and grow stronger relationships with their customers while streamlining their processes. And within any CRM system, there is a CRM database: an automated database that collects, stores, and analyses a company’s customers’ information.  

Why use a CRM software

A CRM software (also known as a Customer Relationship Management system) works as an automated, centralised tracker of a business’s interactions with their customers. It gathers information about a customer’s previous orders, service requests, communications, and preferences, as well as contact details. This ensures that your whole team has access to all relevant and up to date information, allowing for more personalised communication with the customer. 

There is a myriad of studies out there proving what all business owners know by now: that a personalised customer experience increases sales. They make customers feel more valued and increase brand loyalty and awareness. It’s a way of bringing back the feeling of going to a small, local store and having the staff recognise you but on a much bigger scale.  

What is a CRM database?

Among the many features available within a CRM system, the CRM database is the most important one.    

A CRM database is a sophisticated software tool, able to store all collected data and transform it into useful insights for the business, available and ready for your team at any given point of the sales process. Besides contact information and communication history (chats, phone calls, emails), a CRM database might gather information throughout a customer’s journey and across different channels, such as:  

  • App activity 
  • Social media and email marketing interactions 
  • Purchase history  
  • Engagement with marketing campaigns 
  • Customer feedback 
  • Surveys 

A CRM database makes sense of all the information in an automated way, to save yourself time and headaches. 

What are the benefits of a CRM database for your business?

A good CRM will assess your business’s success by providing you with a global view of its relationships with customers. In turn, this should give you an insight into how to improve your marketing, support, and sales efforts to improve conversions. So, how does it do it? 

Keeping contacts organised

The most critical aspect of customer relationship management is organising contact information in a way that is accessible to the whole team at all times. A CRM database stores and updates this information constantly and automatically, so your team can focus on the customer experience without wasting more time than necessary looking for their details. 

Personalising customer experience

Customers are more likely to buy if they receive personalised suggestions for products, discounts based on previous purchases, or rewards for their continued loyalty. A CRM database’s insights can help marketing teams create personalised experiences, and even automate them. At the same time, being able to track all previous interactions with customers makes the Customer Service teams’ job a lot easier, improving response times and, therefore, customer satisfaction. 

Improving sales processes

A CRM database can automate many of the sales related tasks, from order processing to managing deal pipelines, keeping all the information about different procedures in the same platform. This in turn releases some of the time the sales team would be putting on administrative tasks and analysing data, the processes become more efficient, and more time and focus can be put into new leads for sales. 


No good CRM system comes without reporting and analytics tools. Building reports to keep track of everything that has been mentioned in this post is the best way of measuring performance. With the help of CRM software, team leaders can easily create reports that allow them to assess what works and what needs improvement in terms of customer relations. 

Types of CRM databases

There are three different types of CRM databases depending on where they are hosted: 

Cloud CRM 

Cloud CRMs are an easy and quick solution for companies of all sizes. They don’t require an installation on the business’s servers, and, in a way, they maintain themselves. They provide a good level of security, are easily accessible online, and are quite affordable, usually offering monthly payment plans.  

On-premise (on-site) CRM 

It is possible to host CRM software on a company’s server by purchasing it. However, on-premise CRM solutions require dedicated hardware and an IT team to operate and maintain them, becoming an expensive option that might not serve every business’s needs. 

Open-source CRM 

Open-source CRM systems are an affordable option for companies who can build and customise the software solution thanks to a dedicated IT team. They can be downloaded and installed on a company’s own servers, but they can be hard to manage without the right knowledge about software programming. 

We talk more about this topic in our article Should you choose open-source CRM? 

Should you use a CRM database to track client data?  

Depending on your business’s needs, you might find yourself wondering what type of CRM server you should use, and whether you are able to host and work out a CRM on your own servers, or if it would be better to just use a cloud-based CRM. You might even still be considering whether you really need one. 

The truth is a CRM database is one of the best tools you can use in 2024 to improve your team’s communications and customer relationships. But given the number of options out there, choosing the right CRM software for your business is not always easy.  

YourShortlist can help you find the best CRM solution for your business. Our team of consultants are expert in matching buyers with ideal software providers, making the whole decision process simpler and more cost-effective.  

Get in touch with our team for a consultation today and receive a free, bespoke shortlist of CRM database systems that match your business’s needs.