While CRM is massive, there are still gaps, which we covered In Part 2 of this series, “The Empty Filing Cabinet”.
Unfortunately, every CRM customer that’s Account-Based has the impossible task of keeping an entire database of companies up-to-date on their own. In data management circles, we talk about this impossibility as the “Red Queen” problem or a “Sisyphean task”, neither of which is a flattering concept. We will dive into this in future posts.
This article is about the “Missing Company Problem”, which is the 2nd big challenge I see in Account-Based CRM data. It’s insidious, hidden in plain sight, and it is tightly connected to the Empty Filing Cabinet problem.
Accounts are the Spinal Column of Account-Based Strategies
As account-based strategies grow in prominence, B2B sales and marketing teams are tasked with balancing lead-based inbound flow with account-based marketing (ABM) strategies. This contributes to misalignment on pipeline prioritization and reporting criteria, and can ultimately contribute to friction between sales and marketing teams.
Misalignment occurs because CRM leads are isolated from accounts. This is difficult because of a technical gap in the way CRM systems are generally structured; CRM leads are typically not associated to a company until they are manually qualified. Company-level information, if it does exist, may be isolated on other leads or on a separate account object within the CRM.
In B2B, we sell to businesses. While we interact with people representing those businesses, the money comes from the company. That’s why we call it “Business-to-Business.” In any enterprise B2B sale, there are multiple stakeholders across the organization that agree on behalf of their business to purchase, but if you’re looking to drive more business, it’s important to know which businesses will be your best customers.
Sales and Marketing Need a Full Set of Accounts to Be Fully Aligned
In enterprise sales organizations this is obvious; sales teams focus on account fit - the capability and propensity for a given company to become a customer.
In contrast, inbound marketers have traditionally focused on leads and have optimized for scoring these leads based on engagement - like how many ebooks or webinars a prospect has downloaded - rather than the fitness of the Account.
Want to run a test? Ask a sales person which of the following they would prefer:
- Marketing sends 50 leads to sales but none of them are from the right “fit” accounts
- Marketing sends 10 leads to sales, but all of them are from best-fit accounts
They’d take the latter each time. And recently, marketing teams have started to address this issue with a phenomenon called Account Based Marketing, which focuses their efforts on attracting the right fit accounts, rather than serving up (frequently) bad fit leads.
For all the ink and budget spilled on ABM and sales-marketing alignment, this problem has yet to be solved.
Despite being directionally correct, no one has properly cracked the code to realize ABM’s full potential.
It’s a simple concept: market to the best companies - the same best-fit accounts that sales wants to sell to.
What’s wrong? Why is it so hard?
There are two massive obstacles relating to the information infrastructure these teams are using:
- The Empty Filing Cabinet - your CRM starts out empty and you have to fill it in, just like a filing cabinet. This means that every company creates their own version of a database of all companies in the world - adding them in one-by-one and (hopelessly) attempting to maintain all of those companies themselves, over time. This means that neither sales nor marketing has access to a complete, rigorously prioritized, and universally agreed upon list of their best fit accounts (see Part 1 of this series). Everybody can’t row in the same direction if they don’t have complete information on where they are going.
- The Missing Company - the subject of this post. This is a huge problem that’s hidden in plain sight and sits at the root of many of the problems for sales and marketing teams to align efficiently. Unless you conclusively know the answer to the following question, your company is suffering from the Missing Company problem: Who are the companies I should be selling to - and do I know who all of them are?
Quick Primer on CRM Information Architecture: Accounts, Leads, and Contacts
CRM software has specific names for specific types of information, for example: Leads, Contacts, Accounts. To understand the problem, you have to understand what they do:
- A business is represented in CRM as an “Account”
- People are represented in CRM as either a “Lead” or a “Contact”
- A Lead is a person in your CRM that is not yet connected to the company they work for - their Account.
- A Lead becomes a Contact when you “convert” it, which is the way you connect it to an Account.
- Leads are therefore, by definition, not connected to the company they work for. Contacts are connected to the company they work for.
- While different CRM customers use these three “objects” differently, for many companies, Leads are a holding bin of possible prospects whom,once deemed “qualified” by marketing, are then routed to sales reps and hopefully connected to their Accounts in the process, at which point they become Contacts.
- Because there is more information on a Contact (the Account where they work) than there is on a Lead, many CRM customers treat Leads as a holding bin of less qualified prospects and then promote them to Contacts once they’re verified as working for a target Account.
Why are some of the Leads lost? They either
a) Work for a company that is not yet manually added to their CRM as an Account.
b) Work for a company that is already an Account in their CRM, but none of their sales reps or software have yet taken the step of converting the Lead into a Contact.
c) Came inbound with a personal email address (rather than their work email) so your sales team does not know where they work, and thus cannot convert them into a Contact.
What does it mean that they are lost? In some ways they are not completely lost, since they still live in the Lead database - but for any account-based sales or marketing team, the Lead will never be encountered again since everyone is running segmentation and reports based on best-fit accounts. If a huge percentage of your Leads will not show up in any reports or receive any future outreach, then they might as well be lost.
The Big Obvious Problem that’s Hidden in Plain Sight
Where’s the Company? Why isn’t there a concept of a Company? What’s the name for the entity you could sell to that’s not yet an Account in your CRM? How do you know what Companies should become Accounts? How do you connect a Lead to something that’s not yet an Account?
While CRM users have to have different buckets in which they track people (Leads and Contacts), there is no pre-qualified version of an Account. There’s no notion of a Company that is in a holding bin and could eventually become an Account.
Breaking down those silos (leads) and (accounts).
This is a super detailed problem, but it has far-reaching consequences across B2B enterprises everywhere.
Setup Problems Affecting Leads
- Leads are in a silo that is separated from Accounts. You know the thousand new leads that your company got through the conference you spent $20,000 to sponsor last quarter? Some massive % of them (from my experience, this can can range from 20-80%) are completely dislocated (in your CRM) from the companies those people work for, since they never were converted into Contacts.
- Great Leads slip through the cracks when they come through. If a Lead comes through from a company that you really want to engage with, but you do not have an “Account” in your CRM for the company they work for, then your lead scoring and routing systems do not “know” that this is a good lead from a good company.
- Undermines future Account-Based Marketing (ABM) outreach. From the perspective of account-based outreach campaigns, your Leads are not connected in a way that gives you more information about your prospects (the companies they work for). You can NOT run a report to find all Leads that work at your target Accounts. By definition, none of your Leads are connected to the companies they work for. Therefore, if 50% of the people in your database never became Contacts, then your future account-based marketing campaigns will miss 50% of your potential audience of previously interested people.
Setup Problems Affecting Accounts
- Missing Accounts. You do not have a way to know the companies that should be added to your CRM as Accounts, but that you are missing - the companies that you could reach out to, but that are not yet in your CRM as Accounts.
- Missed opportunity to rank Accounts by Lead Volume (engagement data). None of the Leads you accumulate are structurally connected (and therefore contributing more information) to the your CRM’s understanding of the companies they work for. You do not know which of your Accounts have had the largest # of Leads engage with your programs due to the fact that your Account reports can only recognize Contacts associated with them. If one company has had 10 of its employees attend your events and sign up for your webinar, you should definitely know that - but if they’re all lost in the “Leads” database due to you not having an Account for their company, then all of that valuable “Engagement” data is destroyed.
Connect Leads to Companies with DataFox
Since a typical CRM lacks even the concept of target companies, by definition, you need a system that’s connected to your CRM that fills the void.
As a result of these problems, nearly every CRM installation is missing a lot of target companies (Accounts not yet created) and missing a lot of target people (Leads not yet converted).
In the Business-to-Business world, this is a tremendous shortcoming. Companies transact with other companies. It is unacceptable that your CRM is missing both (a) companies that your CRM doesn’t know about, and (b) prospects that are lost inside of your CRM.
Best Practices to Solve this Mess
To have a high functioning go-to-market you need sales and marketing aligned. A few suggestions:
- Find your missing Accounts. Use a Company database to surface and monitor all of the Companies that are not yet in your CRM as Accounts but that someday might be qualified enough to merit adding to your CRM.
- Use Lead volume data in your Company prioritization. You want all of your Leads connected to the Company they work for, regardless of whether you have an Account for the Company they work for. Otherwise, you never know when you should create an Account based on interest from their Company.
- Use Company fit data in your Lead scoring. You want all of your Leads to have Company data connected to them so that you can evaluate the “fit” of the Lead partially based on the “fit” of the Company they work for.
- Constantly rescore your Accounts. Setup software that automatically detects changes to any of your companies (or accounts) as well as the arrival of new Leads - to inform how you score all of your Leads, Companies and Accounts. Implement a system to leverage both the data you have collected internally (like lead volume and opportunity history) as well as data you purchase from external sources (like funding data and growth Signal data) to always have a precise and unified view of your best-fit accounts and leads.
- Constantly and retroactively rescore your past Leads. As the score of the Companies they work for change, the importance of the Leads change too. If you had a ton of Leads from a previously unqualified Company that quickly grows into your sweet spot, you need to know that.
- Company data gives you valuable information about your Leads.
- Lead data gives you valuable information about Companies.
- Neither Leads nor Companies are connected since Companies do not even exist in CRM.
- If you had every Account in your CRM, then you could rescue all Leads and turn them into Contacts.
- You do not have every Account in your CRM because new Companies are created every day and you do not have a way to track Companies that should be added to your CRM because there is no such thing as a Company.
- These problems lead to other problems, like duplicate data, data errors, and lost revenue, which I discuss in more depth in Part 4 of this series.
- If you want to eliminate all of these problems, you should use DataFox, for a Company-centric solution that connects Leads to Companies and connects Companies to Accounts so that you can connect more leads to a company and create more needed accounts, and then keep the company data on all 3 updated forever.
While modern business is dependent on CRM, CRM is still dependent on us to infuse it with intelligence.
DataFox has built a System of Intelligence that connects the dots for you and supplies constantly refreshed data, where you need it.
Check out our “Inbound IQ” product package to learn how to use DataFox’s data and APIs to connect these critical, but disconnected silos of information. The next parts of this series will discuss the many costs of bad CRM data.