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It's Time for Customer Data Management to be Intelligent

A few months ago, I got off the phone with one of our customers. She was stressed and frustrated because she had to spend her weekend cleaning up data problems in her Customer Relationship Management (CRM) software and ended up missing her child’s soccer game.

In her voice, I could hear her anxiety and frustration. She had to choose between her kid’s soccer game and manual data reconciliation. As a founder of two data-intensive businesses and a former investment banker, I’ve seen how ubiquitous these kinds of data problems are.

Staring at spreadsheets with thousands of rows of data, whose source is now obfuscated (and whose accuracy is dubious) is daunting. Manually checking data points one-by-one for tens or hundreds of hours is demoralizing. Any data worker knows the feeling — wondering whether you’ll ever get through the pages and pages of data points, whether your updates are all correct to begin with, and whether the payoff for all that manual labor will be worth it.

For many reasons, the missing and incorrect data in her CRM was not her fault. Company data is constantly changing, and there are too many companies to manually track and clean by yourself. Despite the fact that a completely manual data cleanse is an inherently insurmountable task, she was under pressure from her CFO to get it right.

I’ve been building marketing automation and CRM-related software for 11 years. In that time, I have learned a lot about CRM -- from the nitty-gritty of doing demand generation at scale, to the challenges of solving hundreds of clients’ CRM data problems from the cloud.

I have broken those observations into 5 parts:

  1. It’s time for CRM to be intelligent
  2. Bad data is a CRM killer
  3. Bad CRM data is NOT your fault, but somebody needs to fix it
  4. Move beyond the data provider, toward intelligent CRM
  5. DataFox’s solution to the broken CRM: CRM Orchestration

The following is Part I:

An evolution from CRM of yesterday

Beginning with Florentine merchants keeping customer records to the "filing cabinet on wheels," CRM has come a long way to get us where we are now.

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From these humble beginnings, the CRM evolved quite a bit more quickly in recent decades. Each step in the evolution was a large step forward from what came before it. CRM has evolved from paper order forms and paper rolodexes, to digital rolodexes, to ACT!, to on-prem Siebel, to in-the-cloud Salesforce.

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The CRM of today

CRM is ubiquitous and its influence is only growing. CRM is the system of record for sales teams, containing every customer, every lead, and every interaction a company has had with prospects. As a result, it’s paramount for every sales organization to have accurate information in its CRM.

According to Gartner’s 2015 data, the SaaS CRM software market is booming:
- $26.3 billion in 2015 revenues, with 12% year-over-year growth - SaaS deployments (27%) grew much faster than on-premise (-1%) - Salesforce owned almost 20% of the market ($5.2 billion) and is - growing the fastest among the top 5 vendors

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Salesforce continued surging in 2016, reporting revenues of $6.7 billion, a 24% year-over-year growth. They are forecasted to continue strong growth in 2017 as well.

CRM is an empty digital filing cabinet

We’ve come a long way from the ledger and paper rolodexes — applications and functionalities have exploded in power, potential, and accessibility. The CRM software of today is:

  • Digitized, cloud-based, and available on our phones
  • Speedy and reliable
  • Powerful, including many amazing functions like marketing automation, digital signatures, phone call transcriptions, and automated quote generators

Despite providing these powerful capabilities that were an impossibility before CRM, there’s one big problem with what you get when you purchase a new CRM:

It starts out as an empty filing cabinet.

It’s a container for your information, but there is nothing in it yet. It has drawers pre-labeled “Leads” and “Accounts” and “Opportunities” that are waiting to be filled.

Over time, every CRM customer must build up their own directory of all possible customers by themselves. The folders will only ever contain information that you and your reps manually put into them.

How does the information get in there? Sales reps manually type in account and contact data one-by-one on the companies and the leads you encounter. Day after day, sales reps continuously add partially complete data, slowly filling the files with information.

Even if you import a big spreadsheet of tens of thousands of accounts up front (or periodically), that data starts decaying before it’s even loaded into your CRM. You’re also almost certainly missing important potential companies and mis-categorizing ones you already know about. The information gets stale, isn’t necessarily subject to standardization, and there are always going to be gaps.

Naturally, this customer data just becomes more and more of a mess. With the underlying company information changing constantly, and because each CRM customer has to rely on busy reps to manually enter dynamic information, maintaining a clean customer data platform is a nearly an impossible task. Typically, the older the company, the more egregious the mess.

Each individual CRM customer is essentially on an island, fending for themselves. Some enterprises have data stewards and analysts, governance rules, and master data management platforms to help with managing this data. The cost and effort of each company managing its own in-house set of data experts is tremendous.

It’s great that we’re not all carrying around mini filing cabinets or managing clunky on-prem software, but in an age of automation and AI (Artificial Intelligence), CRM is still a remarkably manual tool.

While modern business is dependent on CRM, CRM is still dependent on us to infuse it with intelligence.

Why is this cumbersome, error-prone system so widely accepted?

Much of the growth in CRM is fundamentally driven by managers’ need for reporting on their reps’ performance. Sales reps hate tedious data entry, but managers require it for reporting, performance appraisal, and forecasting.

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The need for reporting is absolutely understandable. But why should reps have to manually create all these records? It’s 2017!

If you really think about it, shouldn’t all of our potential customers get preloaded into CRM and stay automatically updated for us? We need not all become CRM data management experts!

The absurdity of having to fill the filing cabinet

Imagine if other services we use (like Facebook or Yelp) started out as empty filing cabinets when you signed up.

Imagine if your first experience with Facebook involved you doing a manual import of your iPhone contacts to create records for all of your friends. Over time, as your friends’ names change or they move to a new city, it would be on you to update that information. After a few years, the average data point in your Facebook would be out of date and frequently incorrect.

Even if you were diligent about updating your friends’ records, would it be an enjoyable experience to continually log in and update data, without Facebook ever telling you something didn’t already know?

Or, imagine if Yelp started out with no restaurant data and you typed in all of your favorite restaurants yourself?

Account data is the spinal column of any CRM. Contacts, opportunities, and ultimately, revenue, are all connected up through to your accounts.

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With every core sales motion connected to those accounts, it’s unacceptable that the spinal column of prospective customers is so unstable. For many CRM customers, what should be the core of their sales operations is simply a disaster, fraught with duplicates and incorrect data.

So, why do you, as a CRM customer, have to recreate the record of all companies manually, from scratch, by yourself?

AI won’t work unless we overcome the “red queen” problem

CRM information decays at an astonishing rate.

Trust me. I used to run the data quality team at DataFox and I can assure you: in the few short hours you’ve been able to enjoy a newly cleaned and filled in CRM, a huge amount of that data has already changed.

As soon as data enters the CRM, it begins deteriorating immediately. Companies change names, shut down, get acquired, grow, shrink, and lose people every single day. Even as you try to manually go in and fix this data, it tends to keep getting worse faster than you and your army of interns can fix it.

We call this phenomenon the “red queen” problem; it’s the problem Alice faced in Wonderland. She could keep running faster and faster, but couldn’t ever get to where she wanted to go.

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If left to manually maintain clean CRM data, you will likely run faster and faster, trying to hold up relentlessly deteriorating datasets. Unfortunately, this hand-to-hand combat is not something you are likely to ultimately succeed in.

If you and a few faithful data workers are tasked with keeping all of your CRM data up to date using manual means? Forget it. The red queen is right. You are not getting to where you want to go -- a world of consistently correct data.

So what does this have to do with AI? In the next three years, CRM customers will adopt AI en masse. This will be amplified by Salesforce’s push on Einstein and general AI-oriented enthusiasm.

For companies that are planning to implement AI-based optimizations to their sales workflows, there are two key components:

  • Quality underlying data
  • Applications that leverage that data to produce insights

If a CRM does not have a clean data foundation, then predictive algorithms based on that data will give unreliable results.
This problem is known in computer science lingo as “garbage in, garbage out.” Even the very best algorithms do not deliver insights when they are built on bad underlying data.

AI without clean data is like a Ferrari filled with unrefined oil. It looks cool, but it is not useful and might even do more harm than good.

The Future of Customer Data Management: CRM Orchestration

People moved from ledgers to Rolodexes to software for portability and ease of use, but it has been a mostly linear evolution. Another evolution in CRM software is necessary to keep up in an ever-evolving and improving industry.

As powerful as our machines are now, our sales reps still tell the CRM what is available and what is important.

A CRM should provide intelligence to the sales team, not the other way around.

There is one more big, non-linear step necessary in the evolution of CRM: they should be much smarter about who our potential customers are.

Clean CRM data is absolutely critical to business; millions of businesses make or lose billions of dollars every year based on how efficient their sales teams operate. But before we can harness the power of artificial intelligence in sales organizations, our systems must master the basics of clean and up-to-date information.

The industry is going to evolve whether we like it or not. According to a recent Forrester survey of U.S. B2B sales and sales operations leaders, 77% of them agreed that "my sales organization will seek to replace our CRM systems with more agile sales engagement tools over the next few years.”

There is hope: APIs and cloud based systems of intelligence offer immense potential in this area. Automated, constantly refreshed data puts a stop to the cycle of depreciating data sets. DataFox’s CRM Orchestration provides intelligent account data - infused into your CRM - that constantly updates itself.

Our mission

This is not just a technology problem. It’s a people problem.

Our customer missing her kid’s soccer game because of her CRM data issues really hit home for us. Manual data entry is a waste of energy and brainpower. Millions of our best and brightest spend their days manually putting information into a digital filing cabinet.

Having to manually clean CRM data is awful for our people. Think of all the inefficiencies, the frustrations, and the mis-allocation of time and talent.

Instead of having our charismatic sales reps manually typing data into an empty filing cabinet, they should be speaking with customers! The inefficiencies of having our brightest people doing tedious work hurts morale, performance, and ultimately, retention.

Besides, it doesn’t have to be this way. Why does every single instance of a CRM have to start as an empty digital filing cabinet? In an era of supercomputers on our wrists and self-driving cars, CRM customers should not each have to reinvent the world’s database of business information.

The key motivation behind DataFox is to eliminate grunt work for our customers so that you can have more efficient and fulfilling careers and lives. We’re going on a journey to help millions of our best and brightest take back the time you spend on CRM data entry and redistribute that time towards rest, fun, and being with their loved ones.