What is a Customer Database?

You’ve probably heard of customer databases and how essential they are in multichannel retail. A customer database is simply a database that stores information about customers (or potential customers). Depending on the complexity of the system, a customer database can range from simply storing a customer’s email address and phone number, to complex systems that integrate with other systems like Shopify and Salesforce, capturing every aspect of a customer’s life in a single database.

Why Create A Customer Database?

You’ve probably heard of customer databases, but did you know why businesses need them? Let’s take a look.

In multichannel retail, consumers can visit a business’ website, look over the online catalog, and place an order from the convenience of their home. While online ordering makes the process of placing an order much easier, it doesn’t mean that every shop is equipped to ensure that online orders are successfully delivered. Shoddy courier services, crowded warehouses, and delays in delivery are just some of the issues that could arise.

With a customer database in place, these issues can be avoided. If an online order is placed during off-peak hours, a member of the business’ staff can reach out to the customer to make sure that their order was successfully delivered. If a mistake was made, the order can be resent.

The biggest issue that businesses face when handling customer orders in person is the issue of remembering who the customer is. With an inhouse customer database, businesses can track every order, down to the last detail, and ensure that the customer’s identity is not misappropriated in any way. Even if an online order is placed at the end of the day, a business can verify the order by looking up who the customer is and where they live. This helps avoid a customer being overcharged or undercharged, or having their privacy violated because Shopify doesn’t properly handle customer authentication.

The advantages of having a customer database are numerous, and they range from the simpler to more complex implementations. For instance, if a business already has a customer database and uses Shopify for their ecommerce platform, integrating the two systems is incredibly easy. Every piece of information, from shipping details to order history, is available to be accessed from one central location. This makes the process of checking out as a customer much simpler and more convenient.

What type of data should be stored in a customer database?

Depending on how much information you have about your customers, you can determine what type of data should be stored in a customer database. If you know a customer by their first name, last name, email address, and phone number, then you know exactly what information you can store. If you decide to go the extra mile and store additional information about your customers like their birthday, anniversary, or when they were born, you can begin to see why businesses store so much information about their customers. If you decide to go down this route, make sure that you have a really good reason for doing so, as the volume of data that you store will be under careful scrutiny.

How Secure Is The Data Stored In A Customer Database?

The level of security that you need for the data stored in a customer database will depend on how important that data is. Data that is more sensitive, like financial information, needs to be stored in a more secure environment. Depending on how big your business is, how many security breaches you’ve had in the past, and how much liability you’re exposed to, you’ll have to decide how much security you need for the data stored in a customer database.

Where Should This Data be Stored?

If you decide to store customer data, you’ll need to decide where this data should be stored. While it might be tempting to store this data in the cloud, doing so creates a variety of security risks. If you store data in the cloud, it means that anyone, including hackers, could access this data if they gain access to your laptop or device. Storing data in the cloud also means that this data is not physically secure and is vulnerable to being stolen or damaged. If you decide to go with a local database instead of the cloud, this eliminates a large number of security risks and ensures that your data is physically secure and not subject to being accessed by anyone, anywhere at any time. When it comes to security, there is no compromise. Your data must be protected at all costs.

What Should This Data Be Stored As?

Once you’ve decided where you’ll store the data, you need to decide what you’ll store this data as. If you’re using a relational database like MySQL or PostgreSQL, you can choose to store the data as text or as a series of numbers and letters. Regardless of whether you choose to store the data as text or numbers, make sure that the database is set up in a way that ensures the security and integrity of this data. For example, if you decide to store a customer’s phone number, ensure that this data is never displayed in plain text, but instead is securely transmitted or stored in another format like an encrypted string or a hash value. A hash value is a unique number, like a mathematical fingerprint, that is the result of an algorithm running over data. When a hash value is generated for a piece of data, it is impossible to predict or replicate this data even if you know the algorithm that was used. Because of this, data storing as a hash value is considered extremely secure.

How Much Is This Data Worth?

Another factor to consider when deciding how much data you need is how much this data is worth. This is a difficult question to answer because, in order to determine the exact monetary value of the data, you’ll have to look at a variety of factors – how much it will cost to generate this data, the ease with which you can generate it, and how long it will take. One good rule of thumb is to ask yourself how much value you’ll get back from storing this data. If you can’t answer this question easily, it might be a good idea to keep some of your customers’ data in the cloud, and log the rest locally so that you can access it when needed. In some instances, this could be invaluable. In other instances, it could simply be another data point to add to your growing list.

When deciding how much data you should store about your customers, take your time and think about what will make your business better. The right customer database can help improve how your business is run, ensuring that every order, whether placed online or in person, is successfully delivered and that the customer’s identity is never misappropriated. With a bit of planning and research, you’ll be able to determine the exact amount of data that you need to store, and the benefits that this data will bring. If you’re looking for an easy solution, consider going the extra mile and storing additional information about your customers like their birthday, anniversary, or when they were born. This can help you identify them more easily in case they forget their login details or provide you with an easy way to verify their identity.

What is a customer database?

A customer database is a database that stores information about customers (or potential customers). Depending on the complexity of the system, a customer database can range from simply storing a customer’s email address and phone number, to complex systems that integrate with other systems like Shopify and Salesforce, capturing every aspect of a customer’s life in a single database.

You’ve probably heard of customer databases and how essential they are in multichannel retail. A customer database is simply a database that stores information about customers (or potential customers). Depending on the complexity of the system, a customer database can range from simply storing a customer’s email address and phone number, to complex systems that integrate with other systems like Shopify and Salesforce, capturing every aspect of a customer’s life in a single database.

In multichannel retail, consumers can visit a business’ website, look over the online catalog, and place an order from the convenience of their home. While online ordering makes the process of placing an order much easier, it doesn’t mean that every shop is equipped to ensure that online orders are successfully delivered. Shoddy courier services, crowded warehouses, and delays in delivery are just some of the issues that could arise.

With a customer database in place, these issues can be avoided. If an online order is placed during off-peak hours, a member of the business’ staff can reach out to the customer to make sure that their order was successfully delivered. If a mistake was made, the order can be resent.