Is Your Data Ready to Maximize Value from Your CRM Investments?

Is Your Data Ready to Maximize Value from Your CRM Investments?
Is Your Data Ready to Maximize Value from Your CRM Investments?

A friend of mine recently reached out to me about some advice on CRM solutions in the market.  Though I have not worked for a CRM vendor, I’ve had both direct experience working for companies that implemented such solutions to my current role interacting with large and small organizations regarding their data requirements to support ongoing application investments across industries. As we spoke, memories started to surface when he and I had worked on implementing Salesforce.com (SFDC) many years ago. Memories that we wanted to forget but important to call out given his new situation.

We worked together for a large mortgage lending software vendor selling loan origination solutions to brokers and small lenders mainly through email and snail mail based marketing.  He was responsible for Marketing Operations, and I ran Product Marketing. The company looked at Salesforce.com to help streamline our sales operations  and improve how we marketed and serviced our customers.  The existing CRM system was from the early 90’s and though it did what the company needed it to do, it was heavily customized, costly to operate, and served its life. It was time to upgrade, to help grow the business, improve business productivity, and enhance customer relationships.

After 90 days of rolling out SFDC, we ran into some old familiar problems across the business.  Sales reps continued to struggle in knowing who was a current customer using our software, marketing managers could not create quality mailing lists for prospecting purposes, and call center reps were not able to tell if the person on the other end was a customer or prospect. Everyone wondered why this was happening given we adopted the best CRM solution in the market.  You can imagine the heartburn and ulcers we all had after making such a huge investment in our new CRM solution.  C-Level executives were questioning our decisions and blaming the applications. The truth was, the issues were not related to SFDC but the data that we had migrated into the system and the lack proper governance and a capable information architecture to support the required data management integration between systems that caused these significant headaches.

During the implementation phase, IT imported our entire customer database of 200K+ unique customer entities from the old system to SFDC. Unfortunately, the mortgage industry was very transient and on average there were roughly 55K licenses mortgage brokers and lenders in the market and because no one ever validated the accuracy of who was really a customer vs. someone who had ever bought out product, we had a serious data quality issues including:

  • Trial users  who purchased evaluation copies of our products that expired were tagged as current customers
  • Duplicate records caused by manual data entry errors consisting of companies with similar but entered slightly differently with the same business address were tagged as unique customers
  • Subsidiaries of parent companies in different parts of the country that were tagged again as a unique customer.
  • Lastly, we imported the marketing contact database of prospects which were incorrectly accounted for as a customer in the new system

We also failed to integrate real-time purchasing data and information from our procurement systems for sales and support to handle customer requests. Instead of integrating that data in real-time with proper technology, IT had manually loaded these records at the end of the week via FTP resulting in incorrect billing information, statement processing, and a ton of complaints from customers through our call center. The price we paid for not paying attention to our data quality and integration requirements before we rolled out Salesforce.com was significant for a company of our size. For example:

  • Marketing got hit pretty hard. Each quarter we mailed evaluation copies of new products to our customer database of 200K, each costing the company $12 per to produce and mail. Total cost = $2.4M annually.  Because we had such bad data,  we would get 60% of our mailings returned because of invalid addresses or wrong contact information. The cost of bad data to marketing = $1.44M annually.
  • Next, Sales struggled miserably when trying to upgrade a customer by running cold call campaigns using the names in the database. As a result, sales productivity dropped by 40% and experienced over 35% sales turnover that year. Within a year of using SFDC, our head of sales got let go. Not good!
  • Customer support used SFDC to service customers, our average all times were 40 min per service ticket. We had believed that was “business as usual” until we surveyed what reps were spending their time each day and over 50% said it was dealing with billing issues caused by bad contact information in the CRM system.

At the end of our conversation, this was my advice to my friend:

  • Conduct a data quality audit of the systems that would interact with the CRM system. Audit how complete your critical master and reference data is including names, addresses, customer ID, etc.
  • Do this before you invest in a new CRM system. You may find that much of the challenges faced with your existing applications may be caused by the data gaps vs. the legacy application.
  • If they had a data governance program, involve them in the CRM initiative to ensure they understand what your requirements are and see how they can help.
  • However, if you do decide to modernize, collaborate and involve your IT teams, especially between your Application Development teams and your Enterprise Architects to ensure all of the best options are considered to handle your data sharing and migration needs.
  • Lastly, consult with your technology partners including your new CRM vendor, they may be working with solution providers to help address these data issues as you are probably not the only one in this situation.

Looking Ahead!

CRM systems have come a long way in today’s Big Data and Cloud Era. Many firms are adopting more flexible solutions offered through the Cloud like Salesforce.com, Microsoft Dynamics, and others. Regardless of how old or new, on premise or in the cloud, companies invest in CRM not to just serve their sales teams or increase marketing conversion rates, but to improve your business relationship with your customers. Period! It’s about ensuring you have data in these systems that is trustworthy, complete, up to date, and actionable to improve customer service and help drive sales of new products and services to increase wallet share. So how to do you maximize your business potential from these critical business applications?

Whether you are adopting your first CRM solution or upgrading an existing one, keep in mind that Customer Relationship Management is a business strategy, not just a software purchase. It’s also about having a sound and capable data management and governance strategy supported by people, processes, and technology to ensure you can:

  • Access and migrate data from old to new avoiding develop cost overruns and project delays.
  • Identify, detect, and distribute transactional and reference data from existing systems into your front line business application in real-time!
  • Manage data quality errors including duplicate records, invalid names and contact information due to proper data governance and proactive data quality monitoring and measurement during and after deployment
  • Govern and share authoritative master records of customer, contact, product, and other master data between systems in a trusted manner.

Will your data be ready for your new CRM investments?  To learn more:

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