Bad data = bad decision-making: The critical importance of good CRM data

19 Mar

Posted by: Clay Nelson, Relationship Unlimited Founder

It always amazes me that senior executives and business owners will whole heartedly agree with the notion that bad data = bad decision-making, but then do very little about ensuring their business is underpinned by good data.

Data is the lifeblood of every organisation, yet one of the key issues most businesses face is that their CEO’s, CFO’s, COO’s and even CIO’s generally only pay lip service to the critical importance of their data.

I believe that this is largely because organisational data assets have not traditionally been recognisable as a balance sheet asset for accounting purposes.

Indeed Gartner report that:

“This lack of formal recognition [for data] manifests in most organisations that collect, manage, deploy and value their information with far less discipline than they manage traditional balance sheet assets.”

Once asset valuation approaches are widely adapted and introduced into business accounting and financial models to treat data as a business asset – then watch data get the C-suite attention it deserves!

I digress somewhat, however, let’s just say that in order for an organisation to become truly “data- smart”, then it must start by internally recognising data and information as a highly valuable asset.

There are some commonly acknowledged data quality principles that theorise that the cost of preventing bad data from entering a CRM system costs $X, the cost of correcting existing issues is $Y and then the cost of fixing the problem (after it causes a disaster) is $Z. All of course on an exponential sliding scale.

Which is really just a way to say that the relative cost of correcting data errors increases exponentially over time, and that poor data can have very serious consequences when it’s used for strategically important decision-making.

In contrast, the positive impacts of organisations taking data quality seriously can be game changing.

Using high quality data to power you CRM can provide the following benefits:

Deliver great customer experiences
Anticipate customer needs and buying signals
Improve campaign effectiveness with personalised campaign messaging
Increased customer engagement and satisfaction
Create more meaningful customer relationships
Improve productivity
Reduce CHURN and improve retention
Increase sales and improve margins

Ultimately though, all these benefits stem from good decision-making, and great data is key to achieving this.

Back to reality: CRM’s are particularly prone to containing bad and out-of-date data

In the 202O State of CRM Data Management report produced by Validity, 50% of all respondent businesses rated their overall CRM data quality between “very poor” and “neutral” with only 54% believing that their sales forecasts were “accurate” or “very accurate”.

This is not surprising. While the rate at which your data goes out-of-date (data decay) will depend on many factors, even the rosiest of estimates indicate a rate of at least 30 percent decay every year.

Companies merge, people change jobs, get married, change mobile numbers and email protocols. Without constant maintenance, your once accurate “snapshot in time” database rapidly gets stale and out of date.

To add to this, many (if not most) organisations acquire customer data from multiple channels and sources such as, web forms, exhibitions and point-of-sale systems. This leads to inconsistency in data collection, which requires data cleaning/maintenance and standardisation to rectify.

Also, there’s often a lot of text fields and manual data entry needed when it comes to creating or updating CRM records.

Good data governance

Data governance is a method of control that ensures data entered into your CRM system meets an accurate and defined standard.

Good data governance helps organisations to integrate disparate data sources to reduce the use and input of inaccurate data. It can allow organisations to gain a 360 degree view of their customers and prospects and maximise the value of their data assets. It can also reduce downside risks from data theft and security breaches significantly.

At a minimum, it requires policies, procedures and regular quality assurance and auditing. Genuine buy-in from the c-suite will help ensure that polices and procedures are adopted and followed.

Your people play the pivotal role in maintaining data hygiene and standards. However, they can only do this if they understand how to do so. Make sure that when you implement your standard operating policies and procedures around CRM data entry that you actually issue them to all staff. Then ensure that they are kept up to date, and make it a mandatory part of onboarding and performance appraisals.

To understand where your organisation’s data quality is currently at, perform a data audit.

Relationship Unlimited and our partners can help you with this – you can get in touch with us today and get started with this key step.

Automation, AI and integrations to improve your data and keep it fresh and accurate

You can reduce complexity by utilising tools that make it easier to input data and reduce as much as possible the amount of manual data entry through automation of required fields.

With verified physical addressing, information quality and data automation solutions from providers like Intech Solutions (a Relationship Unlimited technology partner) you can add extra protection for your CRM by preventing duplicates and data entry errors from entering your databases whenever contact, identity or location/addressing data is captured.

While the advent of AI has made free text fields less of an issue for reporting and analysis than they were, it’s easy to forget that only a few years ago any serious reporting on free text was unachievable. Today, Salesforce Einstein AI for CRM, has a fully integrated set of AI technologies that makes Salesforce CRM smarter. You don’t even need to do data preparation or manage models. Using Einstein, Sales can anticipate their next opportunities and exceed customer needs. Service centres can be proactive by resolving cases before they happen. Your Marketing teams can use Einstein AI to create predictive journeys and personalise experiences like never before.

In addition to implementing AI and automation, make sure you can (and do!) integrate your CRM with other systems, that way you will benefit from regular inputs that strengthen and support your data improvement and maintenance efforts.

Focus on improving and enhancing user adoption with quality data

Sales professionals routinely complain that inputting data takes time away from them being able to pursue sales opportunities. If your sales teams are wasting their valuable time searching through duplicate records trying to find the right account, then they are likely to see a CRM more as a hinderance than a useful tool that can help them smash targets.

You can build trust and drive user adoption when data quality is consistently robust. And it’s not just the Sales team, but across all organisational roles. If a user doesn’t trust the data in the CRM due to poor previous experiences, then they are unlikely to make much effort to ensure the data they enter is of a high quality. “Data trust” is usually a self-perpetuating phenomena – with good and trusted data, users will tend to treat it with respect and won’t in turn input data they know to be bad.

A similar thing can occur when it comes to reporting, if the reporting is good and accurate (because of good data) then managers and leaders are more likely to continue with increased use the CRM.

With good data you can actually drive user adoption velocity.

Why it all matters…

Forbes magazine cites researchers from the University of Texas that estimate that by increasing data usability by just 10% Fortune 1000 companies would boost revenue by more than $2 billion per year.

So to sum up, the productivity gains from using good data can be huge. But even Salesforce can’t save you from truly bad data.

In fact, you can’t expect CRM project success without these 3 key requirements:

An incredible CRM platform
Good data
High user adoption

With the help of our partners, Relationship Unlimited can help you address all 3 of these key requirements and ensure that your organisation is set up for success.

Don’t miss out on your opportunity to set the foundations for success, register today to arrange for a FREE Salesforce and data consultation for your business that includes:

A FREE 1 hour Salesforce consultation – where you will learn how Salesforce solutions can be utilised to help ease your organisation’s unique and particular pain points and business issues.

A FREE 1 hour data consultation for your business where our partner Intech Solutions can unpick your current data issues and demo their innovative IQ Office product that which can help you with data standardisation and address validation and much more.