A customer relationship management database is a comprehensive software system that provides a sales force with CRM tools for contact management, customer support, customer retention, and even marketing automation. A customer relationship management system provides a small business or large corporation with relevant information on both existing and potential customers.

Some startups develop their own CRM databases in-house, but others turn to outside vendors that specialize in software as a service (SaaS). Originally, CRM software was installed on individual computers, but today's CRM systems run off cloud computing, which grants functionality to salespeople no matter where they are physically located.

As a business grows, it builds out a customer base and sales pipeline that are impractical to manage with a simple ledger or spreadsheet. Business executives and sales managers may turn to a CRM solution to manage customer data and streamline the workflow of their salespeople. By establishing a CRM database as an all-in-one repository of customer information, a sales manager can turn their focus to other tasks, such as forecasting sales cycle goals, setting sales quotas, managing pricing, and motivating team members.

Sales reps and marketing teams use CRM data entry to catalog as much information as possible about a current customer or prospective customer. A good CRM database has high data quality that provides sales reps with accurate, up-to-date information. Information in a CRM database may include:

1. Customer contact information: This includes email addresses, phone numbers, social media handles, and physical addresses.
2. Customer service history: Good CRM data will include a log of past phone calls, email exchanges, email marketing campaigns, and notes about customer satisfaction.
3. Purchase history: Because business growth often comes from existing customers and referral networks, CRM helps sales reps generate follow-up orders and expand the sales pipeline.
4. Demographic information: By noting demographic customer information, CRM platforms can facilitate customization in marketing campaigns and lead management. Rather than draft one-size-fits-all sales templates, sales reps and marketers can tailor their messaging to the exact needs of an existing or potential customer. This results in both a better customer experience and better sales results.