Why CRMs seemingly always end up messy

By Curtis West at Vaxa Analytics

If you’re a business owner, you’ll certainly understand the importance of nurturing relationships with your customers. You’ve probably heard the term CRM (Customer Relationship Management) extensively, and how it has great potential to deliver in so many areas. So why do so many businesses – particularly small to medium – end up in strife with an unusable, not fit-for-purpose CRM? Hint: the answer isn’t “because we don’t have a $500k Salesforce implementation!”

At Vaxa Analytics, we pride ourselves on helping businesses know what they don’t. One of the most valuable datasets we tap into is our client’s CRM data — so we know first-hand the struggles that small businesses face when it comes to managing CRM data, especially as they scale. We believe that addressing these challenges can lead to remarkable outcomes, both for our analytics work and downstream of that, too.

In this article, we’ll explore the often-overlooked foundations that set up CRMs for success from the get-go. Let’s embark on a journey to uncover why small businesses often find themselves in strife with CRM data, the implications of poor data quality, and most importantly, 8 effective strategies to ensure your CRM data is accurate, up-to-date, and ready to fuel your growth.

Setting the CRM scene

As a small business owner, you might’ve heard “CRM” thrown around quite a bit, but you may still be wondering what it really means and why it matters for your business.

Let’s break it down in plain English.

CRM stands for Customer Relationship Management, and it’s essentially a tool that helps you keep track of all your interactions with your customers. This includes their contact information, purchase history, inquiries, and any other valuable details that help you understand them better.

In a lot of cases, the term “CRM” folds in other functionality too — it’s a bit of a catch-all phrase to refer to “customer and sales data”. So, keep that in mind.

Now, imagine your CRM as a digital brain that stores information about each of your customers. This brain needs to be well taken care of, just like you’d care for your own brain to stay sharp and focused. That’s where “CRM data quality” comes in.

CRM data quality refers to how accurate, complete, and consistent the information in your CRM system is. Think of it as the health of your digital brain. When your CRM data is high-quality, it means you can rely on the information it holds to make better decisions for your business.

The quality of data in a CRM and it’s usability often go hand-in-hand — and it’s exactly here where we see small businesses commonly come undone.

The Struggles of Small Businesses with CRM Data

Maintaining CRM data quality can be challenging, especially for small businesses with limited resources and expertise. Let’s first explore some of the common struggles small businesses face when it comes to managing their CRM data:

  1. Poor system selection or setup: If the CRM system you select doesn’t actually mesh with your business process, the users will find weird and wonderful ways to do their job (Excel spreadsheets, anyone?!) — leaving you with a heap of data rather than a tidy system. A poorly chosen or configured solution is the single biggest root cause of CRM pain.
  2. Manual data entry errors: Small businesses often rely on manual data entry, leaving room for human errors. Typos, misspellings, or incorrect information quickly accumulate, leading to unreliable CRM data.
  3. Lack of data validation processes: Without proper data validation processes in place, businesses may unknowingly collect inaccurate or incomplete information. This lack of validation can lead to incorrect assumptions and flawed decision-making.
  4. Data silos and fragmentation: Small businesses may use multiple tools and systems that store customer information in different places, creating data silos. Without consolidation of data, this fragmentation can make it difficult to get a comprehensive view of customers and their interactions.
  5. Inconsistent data collection practices: Inconsistent data collection methods across different teams or departments can result in discrepancies and confusion. This lack of standardisation can hinder data analysis and hinder a cohesive understanding of customers.

Do any of these sound familiar? You’re not alone.

Data management is a big deal — and it’s challenging to nail, particularly when you’re busy running your business! To help you juggle your priorities, let’s unpack the actual impact of poor-quality data in your CRM.

The Impact of Poor CRM Data Quality

The repercussions of relying on poor CRM data quality can be far-reaching and detrimental to a small business’s success. Here are some of the more significant impacts:

  1. Missed opportunities: Inaccurate or outdated CRM data can cause businesses to miss valuable opportunities. Whether it’s failing to follow up with a potential customer or overlooking a critical market trend, poor data quality can lead to missed chances for growth and revenue.
  2. Ineffective marketing campaigns: Marketing efforts heavily depend on customer insights. If your CRM data is flawed, your marketing campaigns may target the wrong audience or deliver irrelevant messages, leading to wasted resources and low conversion rates.
  3. Decreased customer satisfaction: Customers expect personalised and seamless experiences. If your CRM data is unreliable, you risk providing inconsistent or irrelevant communications, resulting in frustrated and dissatisfied customers. Think about going to the doctor and having to explain the same thing 5 times over — it’s frustrating!
  4. Damaged reputation: Inaccurate data can lead to embarrassing mistakes, such as addressing customers by the wrong names or sending irrelevant offers. These missteps can harm your business’s reputation and erode customer trust.
  5. Higher costs and lower efficiency: Incorrect data can lead to additional costs, such as misguided marketing efforts, redundant communications, and time wastage. It can also slow down decision-making processes, making your business less agile and efficient.
  6. Regulatory compliance issues: Mishandling customer data can lead to compliance issues, particularly with strengthening data privacy laws and regulations. Failing to adhere to these standards can result in legal consequences and damage to your business’s reputation.

The impact of poor CRM data quality underscores the importance of dedicating resources and attention to maintaining a clean and reliable CRM database. By addressing the challenges and investing in data quality improvement, small businesses can unlock the true potential of their CRM data, make informed decisions, and deliver exceptional customer experiences.

Eight Strategies to Ensure CRM Data Quality

Maintaining a tidy CRM doesn’t have to be an overwhelming task – provided you have the right approach.

Here are some practical strategies that small businesses can implement to ensure the accuracy and reliability of their CRM data:

  1. Choose the right system: Spend the time upfront to understand what you actually need from a CRM — both operationally (process) and for your data needs(which is what this article is all about!). Invest in a quality system that fits your business needs and processes, and your team will be generating higher quality data purely by virtue of not having to workaround poor functionality.
  2. Automate data entry and validation: Embrace automation tools that can streamline data entry processes and perform real-time data validation. These tools can help minimise human errors and ensure that only accurate information enters your CRM system. Think about where most of your data flows into the system – is your call centre, or your website? Target those for automation first. There are often some low-cost, quick wins that can cover 80% of your inbound data.
  3. Establish data governance policies: Create clear (but simple) data governance policies that define data ownership, data entry standards, and data update frequency. Make it clear how data in your CRM flows downstream. Having consistent guidelines in place will promote a culture of data quality across your organisation from the get-go. Unfortunately, it won’t be easier to start this as you grow, so best to tackle it now.
  4. Regular data audits: Conduct periodic data audits to identify and rectify any inconsistencies, duplicates, or outdated information in your CRM. This can (or should) be done by the SME in that business area – even if they’re not the day-to-day user of the CRM. Regular audits ensure that your data remains accurate and relevant over time. A quarterly clean often strikes the right balance in our experience.
  5. Integrate data sources: Whenever possible, integrate data from different sources into a centralised CRM platform. This integration minimises data silos and provides a unified view of customer interactions for your staff.
  6. Educate and train staff: Provide training to your team members on the importance of data quality, how to properly maintain CRM data, and the serious downstream impacts of low-quality CRM data. Ensuring everyone understands their role in data management can significantly improve data accuracy.
  7. Encourage data ownership: Assign data ownership responsibilities to specific individuals or teams. When employees feel accountable for data quality, they’re more likely to take the necessary steps to maintain accurate records.
  8. Use data cleaning tools: Utilise automated data cleaning tools or data cleansing services to identify and rectify inconsistencies in your CRM data. Unfortunately, a lot of these are locked away behind high-tier, expensive CRM plans. However, many challenges actually might not be as challenging/expensive to solve as you think — get in touch with us for a quick chat and we’ll be happy to guide you through this.

By adopting these strategies, small businesses can enhance the quality of their CRM data, unlock valuable insights, and leverage this information to make informed decisions that positively impact their bottom line.

Leveraging CRM Data for Sales & Marketing Success

Your CRM data – if of high quality — is an absolute goldmine of customer insights that can fuel your sales & marketing success. In fact, it’s one of the main data sources we use at Vaxa Analytics to help our customers grow.

Here’s how you could be leveraging your CRM data to create more effective and targeted marketing campaigns:

  1. Segmentation and personalisation: Use CRM data to segment your customer base based on demographics, purchase history, preferences, and behaviour. With well-defined segments, you can tailor your marketing messages to resonate with specific customer groups, increasing the chances of engagement and conversions. Read more about how we do this at Vaxa Analytics here.
  2. Behavioural tracking: Analyse customer behaviour data from your CRM to understand how customers interact with your brand. Track website visits, email engagement, and purchase patterns to identify opportunities for personalised recommendations and offers.
  3. Automated email marketing: Integrate your CRM with an email marketing platform to automate personalised email campaigns. Send targeted messages to customers based on their preferences and actions, nurturing leads and fostering customer loyalty.
  4. Customer journey mapping: Map out the customer journey using CRM data to identify touch points and pain points. Understanding your customers’ experiences allows you to optimise interactions and deliver seamless experiences across all channels.
  5. Social media targeting: Use CRM data to create custom audiences on social media platforms. This enables you to deliver tailored ads to specific customer segments, increasing ad relevance and engagement.
  6. Customer feedback and reviews: Monitor and analyse customer feedback and reviews stored in your CRM. Use this information to improve your products, services, and overall customer experience.
  7. Measuring marketing ROI: Connect your CRM data with marketing analytics to measure the effectiveness of your campaigns. This helps you identify which marketing efforts are generating the best results and allocate resources wisely.

We work very closely with Bespoken to help them tap into our mutual clients’ CRM data extensively to deliver bold media, marketing and PR results — here’s Bespoken’s view on why CRM data is so vital.

The Next Step: Advanced CRM & Customer Analytics

Combining CRM data with customer analytics can unlock powerful insights that drive business growth. Here’s how the synergy between CRM and customer analytics can benefit your small business:

  1. 360-Degree Customer View: Integrating CRM data with customer analytics provides a comprehensive view of each customer. You can understand their preferences, buying behaviour, and engagement history, enabling you to anticipate their needs and deliver personalised experiences.
  2. Predictive Analytics: By analysing historical CRM data and customer behaviour, predictive analytics can forecast future trends and customer actions. This allows you to proactively address customer needs and stay ahead of the competition.
  3. Churn Prediction: Using customer analytics on CRM data, you can identify patterns that indicate customers at risk of churning. Armed with this knowledge, you can implement targeted retention strategies to reduce customer churn.
  4. Product and Service Improvements: Analysing CRM data in conjunction with customer feedback helps you identify areas for product and service improvements. Understanding customer pain points and preferences enables you to develop offerings that better align with customer needs.
  5. Market Segmentation Refinement: Customer analytics can validate and refine market segmentation derived from CRM data. This ensures that your marketing efforts target the right audiences, maximising their impact and relevance.
  6. Customer Lifetime Value (CLV) Optimisation: Customer analytics can help you determine the CLV of individual customers. This insight is invaluable for making strategic decisions on customer acquisition, retention, and loyalty programs.

By leveraging CRM data and customer analytics in tandem, small businesses can gain deeper insights into their customers, optimise marketing efforts, and drive business growth through data-driven decision-making. This powerful synergy empowers businesses to remain competitive and deliver exceptional customer experiences that foster long-term relationships.

In closing

Ensuring your CRM is up-to-date and of high quality is a critical task that can significantly impact your small business’s success over the long term. Neglecting the quality of your CRM data can lead to missed opportunities, dissatisfied customers, and ineffective marketing efforts – leading to a heap of cleanup work down the track when you truly need the data most.

However, by understanding the challenges and consequences of poor data quality, you can take proactive steps to improve the health of your digital brain.

At Vaxa Analytics, we believe in helping small businesses thrive through data-driven insights. By leveraging our expertise and the strategies outlined in this article, you can enhance your CRM data quality, uncover hidden opportunities, and create exceptional customer experiences.

Remember, your CRM data is a treasure trove of valuable information waiting to be harnessed. It’s time to unlock its full potential and empower your business to make informed decisions that drive growth, profitability, and customer satisfaction.

Take the time to read Bespoken’s article on just how important a high-quality CRM is to effective media and marketing over on the Vaxa Analytics blog.

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