The foundation of an effective CRM strategy revolves around databases. Comprehensive, targeted and permission-based databases are priceless assets that form the engines of all CRM initiatives. These databases will help companies to direct their marketing efforts with pinpoint accuracy and with maximum effectiveness. It will help companies decide the "what", "when" and "to whom" of marketing campaigns.

Several companies have already realized this and are moving at breakneck speed to acquire and maintain customer profile and behavior through well-defined data mining tools.

Having recognized this, it is only too obvious that targeted databases will acquire exceptional significance by companies wishing to adopt a CRM strategy. Those who maintain them are sitting on priceless assets while those who don't will have to be content playing the peripheral role.

Databases must be procured from various touch points of the business. Touch points are various points at which customer interaction takes place.

For web-based businesses, touch points could include:

• Various forms on the website.
• POS (point of sale) data such as personal details and items ordered.
• Web logs of returning customers.
• Correspondence and email data.

For off-line businesses such as retail stores, it could be:

• The check out counter - which is the POs here
• Survey forms
• Membership forms and loyalty forms
• Call centers
• SFA data (data captured by the sales force)

For businesses combining off-line and on-line processes, touch points would include data procured online as well as offline.

However, it must always be remembered that successful CRM depends on permission database marketing only. There are no two ways about it. Permission is essential to even begin thinking of developing relationships and hence increase the life time value of the customer. Obviously, you aren't going to develop relationships by forcing messages down people's throats.

To read about the importance of permission-based marketing, click here

Once you've got the data procurement strategy in place, you are in a position to tread on the CRM path with the development of a CRM plan.

To get a step-by-step approach on how to develop a CRM plan, click here