How to organize customer data in a CRM Data & Reporting by MATT KEENER March 12, 2020 We live in a data-driven age. Businesses of all sizes—regardless of industry, product, or service—are facing an increasingly complex situation when it comes to managing all of their data. Customer data can be especially difficult to manage; yet, it’s the most important type of data that a business owns. So, what should a modern organization do to effectively manage all of their customer data? Implementing a CRM is an essential step. That being said, simply signing up for a new piece of software (or switching CRMs) is no guarantee for success. To reduce risk of failure and maximize the impact of customer data, forward-thinking companies take a strategic approach by proactively organizing and centralizing their customer data. In this post, we’ll discuss why customer data is so important, how a CRM can help, and best practices for structuring your CRM so that it provides clarity (and not confusion). Why a structured approach to data is worth the effort Before we dive into specifics about organizing your CRM, let’s briefly reflect on why doing so is worth the effort. After all, you’re a busy person. Your team is busy. Spending time on non-revenue producing activities, such as data organization, can feel like a major distraction. On the other hand, failing to effectively manage customer data can have devastating consequences on your business. When data is spread across inboxes, spreadsheets, shared documents, and other data silos, your teams cannot perform at peak efficiency. They spend more time chasing down customer contact information than actually engaging the customers they aim to serve. Organizing customer data in a central, shared database overcomes the inefficiencies of data silos by providing: Quick and easy access to relevant customer information A single source of truth for internal collaboration Transparent reporting for enhanced accountability Less confusion, fewer overlapping systems, and a lot less craziness And, you have to keep in mind the growing concerns about data privacy and security—especially in light of recent regulations, such as GDPR. In today’s business environment, proactive data management has rapidly become an essential element of compliance and risk management. How a CRM helps One of the most challenging aspects of managing customer data is knowing the right way to structure it. Sure, you could keep everything in a spreadsheet on a shared network drive. That’s certainly one approach to managing customer data (and, surprisingly, one that many companies still rely on). However, do-it-yourself solutions, like spreadsheets, have a number of obvious drawbacks—not the least of which includes a lack of structure. To illustrate this point, let’s imagine that you’ve been tasked with building a spreadsheet to house all of your accounts, contacts, and leads. Where would you even begin? Should leads and contacts be maintained on separate tabs? Which column headers (data fields) would you create? What would be the best way to draw connections between organizations and their related contacts? Where will sales reps add their updates and notes? Organizing customer data in a spreadsheet is not as easy as it may seem. Too much flexibility, it turns out, creates nothing but confusion. Compare this approach to that of using a CRM, like Insightly. Unlike a spreadsheet, most CRMs come with prebuilt data structures that help you bypass basic questions about data organization. As an example, Insightly’s standard record management structure looks like this: Prospective customers are entered as lead records. Leads are converted to opportunities, organizations, and contacts. Once opportunities are won, they’re converted into projects. Each lead, opportunity, contact, and project has a set of standard fields that help to ensure consistency of data collection. As a relationship advances, the entire customer journey remains perfectly intact. Nothing gets lost along the way, and there’s no time wasted building pivot tables for reports. Everything feeds into a customer data management system that’s already been tested by tens of thousands of customers who have gone before you. (Of course, you can always customize your CRM to your exact needs, if necessary.) In short, a CRM provides an intuitive, out-of-the-box solution for collecting and managing data in alignment with your customer journey. After all, not every customer buys on day one. Best practices for keeping data clean & organized in your CRM Simply adopting a CRM will not solve all of your customer data management headaches. Yes, the standardized data structure will help; but, it’s also possible that new CRM-related issues can occur. To prevent such issues and elevate the usefulness of customer data in your CRM, consider these best practices. Stay focused on adoption Some companies fail to successfully implement their CRM. Failure has many causes, but lack of user adoption is certainly at the top of the list. Adoption is not a one-time project. Smart companies establish ongoing accountability measures and training programs aimed at maximizing system utilization—and, as a result, ensuring that users are collecting customer data as expected. Integrate & consolidate systems where possible Relying exclusively on manual data entry is not a fail-proof strategy. People forget and make oversights. Supplementing manual data collection with automated CRM integrations increases the flow of customer data and lessens the administrative burden on end users. Better yet, look for ways to reduce the need for third-party integrations and simplify your tech stack. For example, with a unified CRM for sales and marketing, users no longer need to build data integrations to third-party email marketing automation systems. Set guidelines, definitions, & naming conventions with accountability measures What exactly is a “lead”? When should a lead be passed to your sales team for follow-up? Should operations use the customer’s name when naming project records? These are the types of questions you’ll frequently encounter without a well-defined set of guidelines, definitions, and naming conventions. Even then, you’ll still need a way to audit the system and proactively minimize bad data. Limit user permissions Members of your sales development rep (SDR) team probably do not need access to sensitive customer billing information. Likewise, a graphic design contractor who occasionally helps with email marketing campaigns may not need access to customer names or emails. Be selective about who can access and edit your data. Be strategic about customizations True, it would be nice to know each customer’s date of birth so that account executives can extend their birthday greetings. But is this data field actually necessary to the success of your business? Does it move the needle enough to impact your bottom line? Scrutinize every customization idea in light of its impact on business. Customizations, when used strategically, can be helpful. When used flippantly, customizations can create clutter, distractions, and muddy your data. Dispose of data when appropriate Collecting and organizing customer data should not be confused with data hoarding. Not every record should be retained indefinitely. Developing an effective disposition strategy can keep data tidy and align with ongoing data security and compliance initiatives. Elevate customer relationships with better data management Data management processes and systems may not help you increase sales or decrease the cost of goods sold on day one. However, when done the right way, prudent use and collection of data can have a lasting impact on the long-term health of your company—especially as you scale your operations to serve even more customers. Ready to organize your customer data? Request a demo with an Insightly rep to receive a free business and data needs assessment. Request a demo Customer Data Management | Lead disposition | Sales Force Automation | Sales KPIs & analytics MATT KEENER Matt Keener is a digital marketer and President of Keener Marketing Solutions, LLC. In addition to consulting for Insightly and other SaaS clients, Matt enjoys blogging about remote work. 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