Building a database can seem like a daunting task if computer data entry isn’t your forte, but an up-to-date customer database can save your company time and money and most importantly, help you attract repeat business. Small businesses have many options for creating a customer database. You can custom build your own in a basic spreadsheet such as Excel – a good choice if you are already comfortable with this software. Or you can build a database using that feature in Microsoft Word. There are also more sophisticated, dedicated database software programs that can be helpful, as well as online solutions. However you build it, an effective database can: Keep track of customer data including contact information and buying habits. Streamline marketing campaigns with the touch of a button to print labels for direct mail. Track sales habits of each customer. Create daily, monthly, quarterly and yearly reports. Collect information Think not only in the now, but also in the future, by gathering data on existing customers and future prospects. Find the right software You don't have to be an IT expert to set up a database if you choose user-friendly database software. Start managing Name, address, phone, and email are all important, but you'll need much more information on customers to take full advantage of your database. Creating your database is only the first step. You'll also need to set up a plan for its ongoing management. Who will update it? Who will purge outdated contacts? Who will have access to it? How will it be secured? Outsource it If you're just starting your business, chances are you have a lot on your plate. Save time and get up to speed with a database quickly by outsourcing the creation of it and then opting to manage it. Sign on to a complete online solution While it may be overkill for many small businesses, a complete front and back-office online solution for small business such as NetSuite can solve many problems. Start early. You can begin collecting data even before you purchase database software. Assign ownership of creating reports and programming new fields to one person within the company and allow others to add records. This will streamline the process and ensure the database layout is not compromised. To keep your database fresh, provide training for everyone in the company on how to update records, add new clients, and create a policy of when records should be deleted. Backup your database regularly — weekly if possible. To decide the frequency, consider if you lost a few weeks of information, how many customers or prospects would be at risk? Make sure that your database contains layouts for address labels to enable you to quickly send out mailings to current customers.