CRM system hygiene a top data priority

Getting your CRM data in shape should be a top leadership priority to drive sales productivity and revenue growth of up to 10-15%.

Bad CRM data hygiene, coupled with a disconnect between the strategic vs. executional focus on behavioral customer segmentation, has significantly stymied growth prospects for B2B companies, primarily manufacturers and wholesalers whose customers are often thousands of small businesses. Accurate, consistent, and multi-dimensional customer information is critical to having a healthy CRM data environment that enables tailored marketing outreach to prospective customers. Healthy CRM data also facilitates improvements in sales conversion (cross-sell and upsell) for existing customers.

B2B Sales and Marketing executives estimate that between 30-45% of their CRM data is inaccurate or incomplete in some meaningful way. Below are the leading ones that most of us have experienced, from tactical to strategic:

Valuing strategy over execution

How often have you seen amazingly insightful, 100+ page PowerPoint decks, the culmination of 6-months and $500K+ worth of B2B customer studies, describing each of the eight customer archetypes in superb detail. At the end of the presentation by the market research firm, "Skeptical Stephen" and "Price-Conscious Peter" feel like family. You know what they value in life and business, how to drive greater loyalty and sales through personalized approaches, and what steps to take to minimize their customer churn. Then with 2 minutes left in the executive review, you ask the critical question:  

So, what do we do with these insights, and how will it grow our business?

It becomes pretty apparent that there's no plan to integrate any customer insights with your company's CRM data strategy.

My intent is not to diminish the strategic value of critical market research that helps companies, leadership, and the Board understand who B2B buyers are and what makes them unique. This familiar anecdote illustrates that there's often a wide downstream gap between celebrated customer insights in PowerPoint decks and customer-level CRM data that's practical and actionable for your company.

Why is it crucial to integrate customer segmentation data with your CRM system?

Having a single source of truth about customers for Sales and Marketing teams is critical. It enables them to provide a unified experience to the customer before and during the sales cycle. Especially today, when much of the talk is data and digital, even in more traditional corporate settings, your customers expect a highly personalized experience that considers their transactional history, prior interactions, and product or service feedback. Beyond Sales and Marketing, having a 360-degree performance and behavioral view of the customer enables other functional teams to thrive:

1. Customer Success & Support teams produce more satisfactory issue resolutions and increased CSAT and NPS scores.

2. Product Management can develop more surgical product plans

3. Engineering teams deliver more acceptable service levels

In addition to having a robust and unified customer profile accessible to key internal stakeholders, below are my key reasons to tag critical financial, operational, and needs-based segmentation metrics to each of the customer accounts and contacts in your CRM:

How do I improve my CRM Data?

For many of us, decades of inorganic growth and a lack of proper process and systems integration are to blame for insufficient CRM data. In contrast, others never devoted enough time and investment to this topic. It's not atypical to find $100MM-$1B organizations with sub-par CRMs and data processes, spending 40+ hours each month manually exporting massive amounts of data, only to find that 50 percent of the records have incorrect or missing customer information.

Critical steps to addressing CRM data health:

1. To fix things, start with the business outcomes you want to drive towards (FYI - in analytics, always begin with a business outcome and work your way backward). Maybe you want to measure Customer Acquisition Cost (CAC) or Customer Lifetime Value (CLV) by customer segment. Perhaps you want to target customers with personalized marketing messages and sales calls to drive a 20% churn reduction. Or focus 100% of your sales reps' time on the 10% of leads responsible for most sales conversions. Either way, you need to ensure that your goals are specific, measurable, and impactful.

2. Next, partner with your Data (or Data Science) and IT teams to ensure you have the needed customer data to accomplish #1. If it's simply integrating customer financial and operational performance from some data warehouse, that's very simple. If it's coming up with customer segmentation scoring models based on proxy variables, you'll need to engage internal or external Data Science teams. Lastly, suppose it's collecting missing data points or entirely new variables from customers themselves (i.e., demographic, psychographic variables). In that case, you'll need to collaborate with a cross-functional team of IT, Marketing, Sales, and perhaps Change Management teams to ensure that beyond revised customer signup and onboarding forms, new processes are also established and communicated.

3. Invest in 3rd party tools and internal or external experts to maintain consistent and healthy CRM data quality. Once you do #1 and #2 above, it only takes about 60 days before crucial customer data starts degrading again and becomes outdated (i.e., contacts switch companies, people get promoted, etc.).

4. In addition to having a change management lead process and training, having strong senior executive sponsorship is crucial for CRM data initiatives. Without constant and visible support from a Chief Sales Officer or Chief Commercial Officer (and often in tandem with a Chief Data Officer or a CIO), personal accountability and cross-collaboration will eventually lose momentum.

When they say "data is the new oil," it should come with a caveat for CRM data: just as crude oil needs to be refined into gasoline for your car engine to work, so should your dirty, incomplete CRM data be refined for your sales engine to start running efficiently.

If you choose to solve the CRM data hygiene issue in-house, invest in the right tech and human capital. Don't shortchange yourself and put your future sales growth in jeopardy by trying to save money with suboptimal resources. Having best-in-class CRM data and automated, trigger-based processes vs. a suboptimal CRM setup can mean a 10-15% sales upside and a much happier and more productive sales team!

Visit our Sales and Customer Growth Analytics practice area to learn more, or contact us with any questions or comments.