In Pursuit of Productivity
Find out how to achieve higher customer value and lower costs while delivering sustainable, near-term benefits.
Written by Adam Thorp
THE HIGH COST OF BAD DATA
Incomplete, inaccurate and empty fields within your database or CRM platform are all forms of bad data. No organisation is immune to it, most are aware it exists; however, few realise the significant costs involved with ignoring it and fewer implement proactive measures to combat and treat the source or cause of the bad data.
According to Salesforce.com, about 70% of CRM data “goes bad,” or becomes obsolete, annually. Research from the Aberdeen group has identified fewer than 50% of companies report that 75% or more of their sales teams have adopted their CRM technology. That reflects a 15% drop in CRM adoption over 2014 from 2013.
Managing data has never been more important to building customer relationships. Organisations are struggling to integrate an unprecedented amount of customer data streaming in from websites, social media, direct mail and contact center databases -- and to create definitive data that can guide their interaction with customers and prospects.
What’s the cost of this?
Each year sales departments lose approximately 550 hours or 27.3% of seller time per rep annually from using bad prospect data. (Source: http://Ieadjen.com/data-roi-study-cost-not-vaIidating-data-whitepaper)
Extrapolate that over a salesforce of 100 and a conservative cost of sale in excess of $2m annually that comes in at around $550k lost in the abyss of unrecoverable costs.
Sales reps spend 1/3 to 1/2 of their cycles trying to reach contacts that are no longer at their respective companies or in the same position. Besides the hard dollar costs associated with this wasted time there is also a significant opportunity cost associated with the time that could have been spent engaging with good prospects.
Every year 25-30% of data becomes inaccurate putting at risk critical business relationships and lead generation programs fuelled with incorrect data results in a drastic decrease in marketing effectiveness and sales conversions. (Source: http://www.marketingsherpa.com)
The cost of poor data quality has real impact, too. According to leading research house Gartner, CRM departments without sophisticated data management tools result in a 25% reduction in potential revenue. Similarly, a survey by Experian Data Quality found that inaccurate data had a direct impact on the bottom line for 88% of responding companies, with the average company losing 12% of its revenue because of it.
How does good data go bad? You’re relying on extremely busy sales people to update the CRM!
How often do these critical contact data fields change?
60% of people change job functions within their organisation every year
20% of all postal addresses change every year
18% of all telephone numbers change every year
Reliance on end-users to submit and update their data depends of the motivation of those users to actually change their information. This information usually lags and is often incomplete and reduces the value of the data.
Manual data entry can augment these problems as well. All sales and marketing organisations rely on lots of data entry, and when it's done by humans it's slow and error-prone.
Minimising the cost and generating better ROI from your tools and resources
It all starts with having accurate, actionable data - automating that process cuts down on a lot of manual data entry and errors and delays and combining human research with technology tools is key to a successful data management data strategy.
To effectively manage the consistent demand for growth, but with the ever changing marketplace, you need to leverage the power of sales enablement technology, data and analytics coupled with agile process and operational frameworks that will provide you with the capabilities for you to evaluate sales assumptions and diagnose trends in sales outcomes.
Only then will you understand the right actions to take to deliver the right results and be able to translate data into insights and transform those insights into action.
Investments in sales data, technology, and analytics can only live up to their promise when you understanding the dynamics of the fundamental decisions and processes that salespeople, sales managers, and leaders are responsible for.
What really matters is how technology, data, and analytics can help salespeople, sales managers, and leaders improve fundamental sales force decisions and processes.