Customer Relationship Management (CRM) tools are wonderful. They optimize systems and help scale businesses. But when measuring CRM performance, it’s important to remember that at the end of the day, CRM is just a tool. You have to know how to use the tool in order to get the results you desire.
If a carpenter needs to build a house, but he doesn’t have a hammer, the job is going to be slow if not impossible. Give an auto mechanic a hammer, and tell him to build a house, and the job still won’t be done properly because chances are the mechanic does not know how to use the hammer like a carpenter does for that job.
An over-simplified example, but hopefully you’re drawing the connection. CRM can definitely help you improve your business, but only if you know how to use it and avoid the 7 mistakes outlined in this article.
Use this as a checklist to make sure you get an A+ report when measuring CRM performance:
- Lack of automation
- Dirty data
- Failure to learn from analytics
- Implementation of CRM before creating customer strategy
- Inadequate training
- Roll out of CRM before changing organization to match
- Assumption that more CRM technology is better
The good news is that your CRM isn’t to blame, human error and behavior are. The bad news is that you might have a lot of internal work to do if you want to see better CRM performance. If you’re using CRM, but you aren’t seeing the results you were promised or hoped for, here are 7 reasons why that might be.
1. Lack of Automation
Data automation speeds up the data analysis process. Machine learning (ML) tools and artificial intelligence (AI) bots can analyze data in real time. Automation can replace tasks that are slow, monotonous, and prone to mistakes when performed by humans.
The more you can automate in your business, the better. The less tedious work you and your employees have to conduct, the more time you can spend focusing on the larger tasks like customer strategy and organizational adjustments (more on these later).
But perhaps the greatest benefit of automation over manual data management is the reduction of errors. If you have a large quantity of data, data that needs to be updated frequently, and/or data that comes from multiple sources, you should automate your data uploading, handling, and processing.
APIs are great automation tools. They have the ability to verify and process data at the point of entry which is much quicker than any human could perform. APIs can also be used to update data without having to manually contact or research each customer to make sure you have the most up-to-date contact information.
Data errors are costly. Automation can help. The next section covers a number of ways you can prevent data errors from entering your database and save yourself time, money, and resources.
2. Dirty Data
First and foremost, your CRM performance is only as good as the data you give it to work with. Even if you’ve checked off all of the other items in this list, you’re still wasting resources if you’re working with incomplete or incorrect data.
Think of how much more efficient your systems would be if you only spent time and money marketing to verified data. Think of how much time and money you would save if you could avoid shipping errors and chargebacks caused by utilizing incorrect customer data.
It’s like painting a house. What does that paint have to have in order to work? Pigments, binders, liquids, and specific additives. If any of those are missing or incorrect or if anything extra is added, your walls are not going to look good.
Without pigment, you don’t have color. If you have the wrong pigment, you won’t get the color you want. You can’t use paint without the proper ingredients and expect to get the results you want. You can’t create a successful strategy without the correct input or “ingredients” or, in this case, data.
So how do you fix it?
Avoiding dirty data is, broadly, a two step process:
First, you need to collect as much good data as possible the first time. Second, you need to clean or verify that data regularly to keep up with any changes and prevent utilizing outdated data.
How to Collect Good Data Before Measuring CRM Performance
Simplify Web Form Design
Most customer data is collected these days via web forms. If you want users to spend time completing your web forms accurately, you have to make sure they’re quick and easy to use. Online users have the attention span of only about 8 seconds.
So when creating your form design, you’ve got to keep your end users in mind. Too many fields or sub-grids can slow the process and lose the attention of the user. Keep the fields relevant and provide expanded sections for use only when necessary. This keeps the required fields relevant to the specific end user, speeds up the process, and avoids deterring uninterested users.
Validation Error Messages
There are also a number of ways to use validation error messages to make form submission quicker and easier for the users. Not only do users appreciate a fast, seamless process, but validation error messages also help to ensure that only correct data gets entered into your database.
For example, when entering their phone numbers users might add or omit a digit. When this information is entered into your database, it can’t be used because it will be invalid and unreachable. And there’s no way for you to tell by looking at it what the exact mistake is. If you have a lot of data, you might not even realize you have an invalid number in your midst until you’ve already wasted resources trying to utilize that data.
With a validation error message, the user is unable to submit the form until that phone number is formatted properly with the correct number of digits. This prevents the hassle of having to weed out incomplete data since it can’t be uploaded in the first place.
Data Validation APIs
You can also incorporate data validation APIs into your website that verify information at the point of entry. This is useful in instances where a user enters a fake phone number—formatted correctly, but still unreachable—to avoid receiving marketing calls. The API can check the validity of a phone number before it gets entered into your database.
Finally, you might consider adding a CAPTCHA or similar safeguard against bot form submissions. Web form data submitted by robots does you no good, skews your numbers, and wastes resources. Utilizing data submitted by spambots also hurts your reputation, especially if you rely heavily on email marketing.
You can prevent these submissions in most cases, but when you can’t, you still have the option to verify the data before utilizing it.
Batch Data Verification
Once you’ve collected your data, you can vet it before you use it. Using a batch processing tool, you can clean and append all of that data, adding missing names and numbers to existing information, and only upload it once it’s been vetted. This leads us to the second step: regularly clean your data.
How to Clean Your Data Before Measuring CRM Performance
CRM data is not evergreen. It decays over time. This is because users change phone numbers, move, abandon email addresses. And there’s no way for you to know when this happens unless those users update their information with you manually.
Fortunately, using the same batch processing tool we talked about before, you can and should check existing data against public records to catch any potential information changes. You should clean your data at least once every six months to maintain your CRM data integrity.
Results are only as good as the data itself when measuring CRM performance. You’ll get back what you feed it.
3. Failure to Learn from Analytics
Now that you’ve got good, clean data, it’s time to start analyzing it. Your sales and marketing tactics should be influenced by your customer data. Without it, your growth will be limited. Customize offers based on your customers’ geographic locations. Personalize messages by addressing them by name. Use their purchase history to optimize upsell opportunities.
If not used correctly, CRM initiatives can fail to deliver profitable growth and even damage long-standing customer relationships. Don’t make the mistake of building relationships with the wrong customers or with the right customers the wrong way.
You have to analyze the responses to your campaigns to gauge how and how often to contact your customers to build relationships with those customers that value them and avoid harassing those that don’t. CRM cannot and does not manage customer relationships for you. It is a software tool that enables you to manage those relationships effectively.
4. Implementation of CRM Before Creating Customer Strategy
CRM does have the ability to weed out low-margin customers and attract high-margin ones. But this only works if you have already developed a customer acquisition and retention strategy. Once that is set up, your CRM software can automate the process from there.
Don’t rely on your CRM to create that strategy for you. Remember, it’s only a tool. You still need to draw up the blueprints. Then you can use the tool to help execute the plan.
Remember our hammer analogy. Say we give the carpenter the hammer to build the house but leave him no time to create an architectural plan. That hammer is going to help put pieces of the house together, but how structurally sound will it be? How many gaps? How many errors could have been avoided if he’d had time to map out a plan, a strategy, first?
The same is true of your implementation of CRM. If you try to use it without a tried and true customer strategy, you’re not going to get the best results.
When you thoroughly calculate your customer strategy, you give your employees a clear idea of what targets they’re aiming for, why they are aiming for them, and how they are going to hit the targets. This is why, also, your employees need to be properly trained to make sure your CRM works.
5. Inadequate Training
When measuring CRM performance, inadequate training of employees could be one reason why you aren’t getting the results you want. Again, CRM is just a tool. You and your employees have to know how to use the tool properly in order for it to work its best.
The first step is going to be getting everyone on board. Depending on the number and diversity of your employees, it might take some extra work to get them all to adopt new technology. There might be some differing opinions about the need for it at all. This is especially why proper training is necessary.
If you ask an employee to start using new technology, and that person resists it, then it isn’t going to work to its full potential. Say you give a nail gun to a bunch of carpenters who have been using hammers for their entire careers. You tell them you want them to build the next house using a nail gun instead of a hammer because it will speed up the process.
But you don’t show them how to use the nail gun. Some of those carpenters are going to reject it and stick with what they know, the hammer. Other carpenters might be open to the idea of using new technology to make their jobs easier, but without proper training they are slow and perhaps even inaccurate in their execution. So in the end, did you really improve that project?
By showing your employees how to use CRM and the potential benefits of using it properly, you ease them into adoption. Training works on two levels: it relieves resistance and ensures that the technology is used correctly therefore optimizing your CRM performance.
6. Roll Out of CRM Without Changing Organization to Match
Number 6 really encompasses 4 and 5 as well. If you want to improve your business, and you’ve decided to use CRM to assist you, you have to understand that you can’t add a new tool to your business and expect it to get your results if something else is broken.
Take our carpenters again. They are given their hammers and are told to fix a broken house. The hammer can help put some pieces back together, but the windows are still cracked, the paint is still chipped, the pipes still leak. So it’s better, but is it what the manager really envisioned when he asked for a fixed house?
The same is true of your business. Say, for example, you want to improve your customer acquisition to get more leads and sales. You add CRM to find out where you can meet your target audience. But your customer service is still lacking.
So you might get more leads from your CRM data, but if you have poor customer service processes, you’ll lose existing customers. In this case, you won’t make much progress. You might bring in more customers, but you’ll also lose existing ones. And those are your most valuable relationships!
Can CRM help you scale your business? Absolutely! Is it the only thing you should be changing to your business model? Absolutely not. In order to retain customers, you have to make sure you use customer feedback and CRM data to make necessary changes to all key business processes from order fulfillment to customer service. Only then will you get noticeable results.
This applies to more than just customer-facing processes as well. Don’t make the mistake of thinking that customer-facing processes are the only ones that matter. Internal structures and systems need to be adjusted as well to meet the needs of the company goals. You have to take all processes into consideration when measuring CRM performance.
Would you try to sell a house that was newly painted on the outside but dilapidated on the inside? Would anyone buy that? No, because the integrity of a house relies upon more than just the surface. Would you fix a leak with a piece of tape? Maybe temporarily, but it wouldn’t suffice as a long-term solution.
In your business, you might need to adjust roles among your employees, incorporate more training, or create goals and milestones. You might have to pay your employees more! Whatever it is, you can’t expect CRM to do all of the heavy lifting for you. It is one tool among many in your toolbelt. So make sure you’re properly equipped.
7. Assumption That More CRM Technology is Better
Finally, you can’t use all of the technology available if it doesn’t address the needs and wants of your customers. Just because it’s there doesn’t mean you have to use it. It’s up to you to analyze your data and make strategic decisions. If that means you need more technology, great! If it doesn’t, don’t force it.
CRM software was designed to improve customer loyalty and increase company profitability. It does this by gathering customer data that allows you to identify who your most valuable customers are, create customized products and services, reduce the cost of serving existing customers, and acquire lookalike customers.
If you can do all of this from your CRM data, then that’s all you need. What you do with the data is the key. Customer strategy is more important to your success than the amount of technology you deploy. Once you have your data, it’s then your job to make the appropriate decisions and adjustments. No amount of technology can do that for you.
Now, you can increase the speed of your CRM, but it doesn’t necessarily mean you should. Only do as much as you can without compromising the customer experience. As far as CRM speed is concerned, the most important factor is the perception of the end user.
If your customers are happy with the current speed of your CRM system, then don’t remove customizations to try to make it faster. Your focus should be on ease, functionality, and minimal bugs. That’s what the customer values, not how quickly you get their data.
Measuring CRM Performance
When measuring CRM performance, it’s important to make sure every aspect of your business is working with the CRM software and not relying solely on it. If you’re using CRM but aren’t seeing desired results, go back through the list we outlined in this article and make sure you aren’t making mistakes in other areas.
CRM software is a tool that can be used to optimize your systems, but only if you make associated adjustments. Implement training, learn from the data, and change your business to match what the data tells you.
There are many tools that can be used in conjunction to ensure the best performance. Searchbug offers API and batch solutions that can be used to automate your systems and keep your data clean. CRM is just one of the tools in your toolbelt. Use it wisely.