A customer database is a structured collection of information about a company's customers. This data typically includes details such as names, contact information, purchase history, and preferences. Businesses use this information to better understand their customers and improve their services. By maintaining a customer database, companies can analyze trends, target marketing efforts, and enhance customer relationships. It helps in personalizing communication and offers, ultimately leading to increased customer satisfaction and loyalty. Effective management of a customer database is crucial for businesses to thrive in a competitive market.