The management of information is key to the success of any business and a critical part of this is a reliable and easy-to-use customer database. Once set up, a customer database provides a quick and easy way to contact clients and keep essential customer information up to date.

This guide explains the importance of a database and provides a straightforward guide to setting up and using a computerised customer database.

What is a database?

An electronic database is a collection of related digital information, stored in a way that enables you to extract specific data quickly and easily. The information can be stored in the form of text, numbers or images. Searches are made using a powerful query language called SQL (structured query language), which enables you to extract information from your database in a form that exactly meets your requirements.

What are the individual elements of a database?

One of the keys to understanding databases is coming to terms with the technical language that surrounds them. Put simply, a database is a collection of one or more tables of information. Each table contains a series of records. Within each record are a number of distinct fields. Here are the key terms explained:

Field .this stores an individual item of data such as a customer's name or age.

Record .a record is a collection of fields that describe an entire item. For example, a record might contain the entire contact details of an individual supplier.

Table .this is a collection of records, e.g. a set of staff contact details from a company.

Database -this is a compilation of one or more tables.

What are the different types of databases?

Originally computer databases were ‘flat’ file. That is, they consisted of one table or ‘list’ covering one subject. To extract information, a search was simply made of that table.

Nowadays, virtually all computer databases are ‘relational’. In other words, they consist of one or more tables that relate to each other. Examples of relational databases are Microsoft Access used with Windows, or FileMaker Pro, which can be used with Windows or Mac. The advantage of this type of database is that access to information is quicker, and users can extract data from more than one table.

At the very least, any modern business should have a customer database. At the most basic level, it can house all your customers’ contact details. You may also choose to add other tables such as salary details or stock details relevant to different parts of your business.

A database also differs depending on the kind of information held on it and how it is used.

A simple database, holding basic information about customers, can be set up with a basic database program. For example, you may want to keep records of your customers’ names and addresses and a breakdown of their purchases by date and by amount. More complex database programs and specialist contact management systems are available for businesses which need to make more complex target mailings, or which have many customers with widely differing needs. So, for example, a kitchen designer wanting to cross-reference all customers who bought handmade worktops in the past year so that they can mail them an offer on designer flooring, might need a more complicated integrated system.

What does a database enable you to do?

Once a customer database has been created, you can add and update data, search for information such as the details of an individual customer, or produce a list of customers with particular attributes – for example, all customers based in a certain area – or those that did more than £10,000 worth of business with you this year. It allows you to produce a mailing list either of the whole list or specific parts of it. A database allows you to target certain customers for specific deals by segmenting those with particular needs or interests.

Because you can add to and remove information quickly, you can keep your customer information up to date easily. It’s easy to produce address labels and tailored letters using the database as the basis for a mailing list.

If your business has a lot of customers, you can use a database to obtain a buying profile, which enables you to target your mailings more effectively. A hotel, for example, might send different mailings to people who prefer weekend breaks to those who are business users.

Your business might, on the other hand, have a proportion of customers with whom you are hoping to foster a long-term relationship. This may mean that several people in your business are contacting them, perhaps for marketing or production queries. In such a case, a database is a way to share information so that one member of your business does not meet the customer with out-of-date information or contradict what someone else from your business has agreed to. Ideally, in this case, your database would be networked, so it is available on more than one computer in the office and everyone can access and add to it.

Finding the right software

Most computers now are sold with databases as part of their software bundles. For example, Lotus Approach is part of the Lotus Smartsuite and Microsoft Access comes with the Microsoft Office software. These databases are perfectly adequate for most businesses. For example, a landscape gardener with a limited circle of regular customers would find a database provided with a standard PC perfectly suitable for recording information about his or her clients and their gardening needs.

Equally, a hotel proprietor with a changing client list, who wanted to send out information to customers about specialist weekend breaks, could use one of these databases to connect clients with the various holiday packages being offered, as well as varying interests and price ranges.

On the other hand, there are businesses whose needs are specific and unusual and who would be advised to invest in more specialist software. There are many companies that specialise in designing, setting up and managing databases for businesses with particular needs.

If you have information that needs to be shared among many staff, then using a Web-enabled database on a networked system might be the most useful method. If all you want to do is collect names and email addresses, you may want to ask your Web designer or design company if this is something that can be set up on your existing site.

Setting up the system

Your database needs to be accurate, up to date and in an easy to understand format. In order to make it usable it should be:

• Appropriate for the job.
  
• Easy to use.
  
• Able to minimise duplication of information.
  
• Able to automate as many tasks as possible.

You also need to decide who will use the information and how it will need to be accessed .e.g. by a single user, via a network or via the company intranet, if you have one.

Most standard database packages, supplied with your computer, will be easy to use and come with an instruction manual or online help. You would be wise to read the instructions thoroughly before you start. If you are new to databases, it may be worth seeking out a suitable training course to make sure you get the most from your database.

Templates are usually provided and you might find one perfectly adequate or useful if slightly modified. If this is the case, all you have to do is fill in the information (fields) for each card (record). If there are no suitable templates, you can create your own by inputting fields – for example, name, address, email – onto a blank template. You can also input data by creating lists in a specific format in another programme such as Word or Excel and then import it into your database program.

Before you can set up your system you need to know what you want to use the database for and what information you want to put into it. Make a list of the information you need. You should take some time over this. You may think you only need customers’ contact details, but if you find yourself thinking, ‘I really need their house types and marital status,’ then you need to add this to your list too. It is much easier to add it from the start than to try to put it in later.

Then decide how you want to use the information. Do you just want to get at simple information quickly? Or do you want to be able to cross-reference a great deal of information from different sources? If you simply want to record your customers’ names and addresses, you may choose a simple package. However if, for example, you want to search for all customers in North East England who have spent over £500 with you over the past six months, then a more complex piece of software may be necessary.

Once you have adapted, or created, a suitable template for a ‘card’, you can input the relevant information for each customer.

If you feel daunted by this, you may find it quicker to employ someone to set up the database for you and leave you to input the information. This might prove more effective in the long run. A professional will also explain to you how to use the system to best advantage and should be available for backup if you get stuck. If you make good use of it, the long-term value you get from your database should easily mean you recuperate the costs involved in setting it up.

Any reputable database design company should:

• Find out exactly what you want your database to do.
  
• Look at the kind of information you want to include.
  
• Suggest a suitable format for the database.
  
• Design and test the database.
  
• Demonstrate its use.
  
• Offer training in the use of the database.
  
• Supply back-up help and technical advice after installation.

Hidden problems

IDon’t underestimate the time it will take to create and maintain data. Allow for teething problems in setting up your database and for inputting the data. As a customer database needs to be kept up to date, decide early on whether this will be the job of one member of staff or whether all your staff will update information each time they contact a client.

Using the system successfully

No system works well if it is not used properly. Ideally, each time you contact a customer, make sure that you update their records immediately. Leave it and you will forget it. Train everyone who uses the database to update information every time they speak to a customer. On a networked system, this enables everyone to access the up-to-date records immediately.

Keep it simple

Beware of setting up too complex a database. Make sure that you set up one that caters for your needs. As a director of an energy company put it: “In my experience, the simpler the better. It is hard enough getting people to write notes about the people they’ve seen anyway, without having to add the notes to a database.”

Sometimes the simplest database is the best. If all you need is a customer's name and address, use one of the online address books provided with your PC’s software. Don’t make any database more complicated than you need. But bear in mind that your needs might change, so any database should be capable of changing with you.

Data Protection Act

Don’t forget that, under the Data Protection Act 1998, your customers have rights, and you have obligations about the type of information you can hold about them. You will need to register with the Information Commissioner and may have to pay for the privilege of keeping your database. If a customer asks you to remove their information, you are obliged to do so immediately. You must also let them know what information you hold about them.

Make it clear to all clients that you hold basic information about them. Most will not mind, but make sure you react promptly to those who do. You are also not permitted to pass on information from your database without the permission of the person whose data you hold. This applies to both hand-written and computer-held databases. Look at the Information Commissioner’s website for detailed information and advice.

Real stories

It is not hard to set up a customer database, but sometimes getting expert help makes the process quicker. A typesetter at Aln Printers in Northumberland describes how she got the company’s database up and running. “We have a customer database that holds people’s names, addresses and contact names. It’s then split up into different categories so that we can target people for advertising and so on. It’s a very simple system. It’s networked on a PC and there are only two of us who deal with it.

“I did get some outside help from a computer expert in setting it up. He asked me what I needed to do and if I ever need to write another one I’ve got this "idiot guide" that he wrote down for me. There are no problems with using the database. It’s really very simple as long as the computer doesn't go down. It’s been in use now for about three years and it’s very useful for sending out mail-shots and catalogues to customers.

“The advantages are that, any time you need to check anybody’s telephone number or ring them, you’ve only got to go on your database and find it out. And of course, if you’re posting stuff, it’s easier to just run off labels rather than doing it by hand.”

Useful contacts

Information Commissioner’s Office
W:www.informationcommissioner.gov.uk

Back