Everything an organization does relies on accurate customer relationship management (CRM) data. It encompasses every part of an organization, from marketing campaigns to sales development activity to customer experience and beyond.
Yet far too many CRM users blindly assume their data is clean and ready for meaningful use. And in many cases, they’re wrong.
The reality is that data decay, or the degradation of overall data quality due to missing, incomplete, or outdated information within databases, has accelerated since the start of COVID-19. If ignored, it can be a silent killer for many organizations.
In a recent State of CRM Data Health Study, 76% of respondents, comprised of 1,241 CRM users and stakeholders, characterized their CRM data quality as either “good or very good” at the onset of the survey, only to later reveal that poor CRM data quality is actually costing their company new sales.
In fact, 75% of respondents state inadequate outreach driven by poor data actually lost their company customers. Additionally, 79% of respondents agreed that data decay has accelerated at an unprecedented rate as a result of the pandemic, heightening the tension between data confidence and reality.
Challenges Linked to Poor CRM Data Quality
So what is the reality of CRM data health? Consider three challenges organizations face that are directly linked to low-quality CRM data:
Poor Business Operations
Data quality has a direct impact on revenue—almost half (44%) of companies estimate their company loses over 10% in annual revenue due to poor-quality CRM data.
Teams are relying on CRM data more than ever. As sales volumes increase, business relationships grow more complex, and consumer expectations for personalized, frictionless experiences climb. But this innate reliance hinges on the data being accurate.
Keep in mind, high-quality data is the foundation of a high-performing organization. When data is inaccurate, it negatively impacts performance across the entire organization. And as organizations face pressure to innovate ahead of competitors, data quality issues can sabotage new initiatives, like artificial intelligence projects or hyper-personalization campaigns, before they’ve even begun.
Dubious Internal Practices
Another major concern with data decay is a lack of acknowledgement and remediation-focused support from company leadership. However, today top executives are not prioritizing data quality issues, per the report.
And when leadership does not take a firm stance on data integrity, the attitude trickles down to all levels of an organization. It can quickly expand into overarching unethical data practices that damage brand reputation and customer trust. When this tone is set at the top, it is unrealistic to assume that lower-level CRM users will perform the extra legwork required to keep data clean and up to date.
In fact, 75% of respondents in the data health study admit employees have fabricated data—42% said they do it sometimes and 33% said they do it often—to tell the story they want decision makers to hear. While at the same time, 82% are asked to find data to support a specific story, rather than provide accurate data. This means that overwhelmingly, leaders are making important business decisions based on manipulated and inaccurate data.
Also see: Real Time Data Management Trends
Cracked Company Culture
Relationships among coworkers also have the potential to be impacted by low-quality data. Tensions between the CRM admins and the marketing department are only heightened by poor data quality—67% of the study’s respondents stated these breakdowns jeopardized employee satisfaction in an already difficult hiring climate.
Current CRM users quite simply have less patience for low-quality data and usability roadblocks that make it difficult to do their jobs. Well over half (64%) of respondents said they would consider leaving their current role if additional resources are not allocated to improving CRM data quality.
Coupled with the lack of ownership from management—and 24% of respondents said leadership does whatever they want regardless of what the data says, while 14% said leadership is oblivious to data quality issues—employees are no longer willing to tolerate ineffective procedures that waste their time, resources, and energy.
Data is at the very core of an organization, and a well-managed CRM helps it reach customers and employees alike. If the data health is compromised, it causes a ripple effect on the entire company and can be devastating to both employee retention and the bottom line.
Companies Working on Improvement
There are real costs to neglecting CRM data management. However, companies have started addressing these issues with increased budgets and full-time staff.
57% of employees expect their company to increase data management budgets this year. Of those who do not currently have full-time employees dedicated to CRM data quality, 56% have active plans to make hires in the next six months.
Beyond hiring a dedicated CRM data management team, companies need leadership buy-in. When leadership prioritizes data management, it becomes easier to gain the necessary resources for organizational change and investments into data health.
Additionally, companies should consider automating their data management process to streamline their efforts to make maintaining CRM data quality more user-friendly.
Overall, organizations must address their data shortcomings, sooner rather than later. By tackling these challenges head on, you can best protect your data in 2022.
Also see: What is Data Visualization
About the Author:
Chris Hyde, Global Head of Data Solutions at Validity