Data Privacy

CRM Data: What It is and How to Use It to Your Advantage

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Your customer and prospect data is the key to driving sales. So you should collect as much information as you can, right? 

Not necessarily. There is such a thing as having too much data—it makes your CRM data unmanageable. Not to mention the fact that having excess data makes it even more difficult to follow relevant consumer privacy laws.

As your business grows and you interact with your customers across an increasing number of channels, it becomes tricky to know how to engage individual contacts and use their data in helpful ways. 

Over time, your contacts will become duplicated and your team may store their information across different databases. Your data can quickly become outdated and stale, making it harder for your CRM users to know how to engage with their contacts. Eventually, your reps may end up spending more of their time managing your CRM (Customer Relationship Management) than communicating with your customers. 

Luckily, all of these challenges are easy to manage or avoid, and we’ll teach you how.  

Regardless of if your team is looking to implement a new CRM platform, start a data migration, or clean your existing database, let’s look at the benefits of using a CRM, the types of data you might store in one, and tips for keeping your customer data organized

Types of CRM data

CRM data refers to information or records about customers that are stored within a CRM system.

There are many pieces of data that you can store in your CRM, such as a contact’s name, email, phone number, city or location, address, gender, education, work history, and marital status. See what we mean when we said it’s easy to have too much data?

Remember: the goal is to only store information in your CRM that is actually useful for improving your customer experience. Nowadays, most sales and marketing professionals think about this in terms of personalization. Seventy-one percent of consumers now expect companies to deliver personalized interactions. Which data points does your team need to deliver the truly personalized communications customers and prospects now expect?

There are many ways that you can collect CRM data, including:

  • Direct interactions with the customer through email or other communication channels
  • Surveys sent to the customer through SMS text or email or when they visit your site
  • Customer preference centers that allow your subscribers to provide their details and customize their communication preferences

Reps will manually add data to your CRM, or the data will automatically generate if someone gives you their information through a web form or at the point of sale.

When considering what data to store in your CRM, it helps to understand the following four categories of CRM data. But keep in mind that for virtually all consumer data, you’ll want to make sure you’ve read up on relevant local consumer privacy laws like GDPR in the EU, PIPL in China, and various statewide laws in the United States. These laws will determine exactly which data points you’re able to collect, what level of consumer consent is required, how long this data can be stored, etc.

Descriptive data

Descriptive data provides personal insights into your customers and their shopping behaviors, which can include information like the customer’s job, education level, family details, and lifestyle information (for example, whether they own or rent a home, hobbies, and other general interests). Descriptive data can be difficult to acquire—you’ll have to rely on surveys, social listening, and direct customer interactions to acquire descriptive data—but it is incredibly helpful for personalizing the customer experience.

Identity data

Identity data refers to any information that can be used to identify a customer or prospect. Identity data includes information like the customer’s first and last name, mailing address, contact information like their email address or phone number, social media links, and other relevant personal information. Identity data is fairly easy to acquire and verify—especially if you’re a retailer or ecommerce company, as your customers will give you some of this information at the point of sale—and it is the most basic level of detail you should house in your CRM. That said, identity data can be highly sensitive and can be most vulnerable in the event of a data breach. In general, it’s best to limit your identity data to only the essential information you need. 

Qualitative data

Qualitative data can measure your customer’s opinions and satisfaction with your brand. It includes findings from customer surveys and reviews, social media activity, and direct feedback from conversations with your team. Qualitative data helps your sales and marketing reps know how to approach a customer and how the customer generally feels about your company. This is another difficult type of data to collect, but it can be the most helpful for knowing how to engage individual prospects and retain existing customers. 

Quantitative data

Quantitative data involves hard stats and figures about your customer and how they’ve interacted with your brand. Quantitative data in your CRM can include a customer’s total number of purchases with your brand, the average amount they spend each time, how often they’ve contacted your company support team, and how many times they’ve visited your website. This type of data is relatively easy to capture and track at the point of sale or through your analytics tools. Integrating your CRM with your POS software will keep your quantitative data updated. 

What is a CRM database?

A customer relationship management (CRM) database stores your customer data and prospect information that has been collected.

A CRM serves as the hub for all of your customer data, providing a one-stop shop for sales and marketing teams to plan and manage their outreach campaigns. Ideally, your customer relationship management data will integrate with the rest of your marketing and sales technology stack to continually add, verify, and update your CRM data.

There are hundreds of CRM platforms, including on-premise and cloud-based solutions. Each offers a different range of features and industry-specific uses. Some of the most popular CRM vendors include Salesforce, Hubspot, Nimble, Oracle, SAP, and Zoho. 

If you’re in the market for a new CRM software, ask your marketing and sales connections about the CRMs they’ve used in the past and peruse software-specific review sites like G2—this will greatly streamline your search. 

Why collect CRM data?

Your CRM data is one of the most valuable assets your company owns. Its use—or misuse—will directly affect your business success. 

When you keep a clean CRM database with only the most useful information for your reps, you can unlock many business advantages, including the following.

Enhanced customer experience

Your customers expect highly personalized experiences when engaging with your brand. Every message you send needs to prove that you understand the customer as an individual, their unique needs, and their relationship with your brand—or you risk losing them to a competitor.

Your CRM data is essential for personalizing each customer’s experience, such as using their name in your messages, providing them recommendations based on their past purchases, and using their location (if they provide it) to spotlight local offers or opportunities. Additionally, your CRM can help you segment customers based on their preferences, making it easier to personalize your campaigns. 

Ensure business growth

We’ve mentioned that your CRM is a tool for both sales and marketing teams, meaning your CRM is a direct factor in your revenue growth. CRM metrics help your team appropriately label and filter your customers to better engage with them. Most CRMs can run helpful reports, too, that forecast your sales, identify hot leads, and empower your sales reps to act fast.

Increase your conversion rate

By using your customer data, you can more accurately approach your customers with relevant offers and suggestions at times when they matter the most. This gives you a greater chance of driving sales and increasing your conversion rate.  

Improve analysis and forecasting accuracy

A fine-tuned CRM can give your sales leaders greater confidence when forecasting your quarterly sales and help you analyze your results. The CRM reports we mentioned earlier—we’ll explain those in the next section—provide your leaders the data they need to understand their sales cycles, identify areas of opportunity, and improve the accuracy of their forecasts. 

Tips for keeping your CRM database clean and organized

One of the main challenges that sales and marketing professionals face with their CRM database is keeping it clean. As your contacts grow from hundreds to thousands and your entries come from multiple sources, your CRM will need regular maintenance.

Contacts become duplicated. Information gets stale. Reps cut corners when manually inputting data. 

It’s inevitable that your CRM data quality will decrease with time, but you can keep your CRM up to date by making data cleaning a priority and following these best practices. 

Follow a regular maintenance/update schedule

Given the multiple ways that customer data can enter your CRM, you need to follow a regular data maintenance schedule to catch and correct any outdated or incorrect customer information. At a minimum, your team should manually review its CRM database once every eight weeks—which is typically how long an email nurture campaign is—and before any major outreach seasons, like the holidays.

But the better option is to implement a data management platform like Validity DemandTools, which automatically dedupes, standardizes, and assigns records as they come in from different sources.

Get rid of unnecessary data

Don’t be a data hoarder. Too often, marketers collect every possible piece of customer information they can, but this often distracts them from the details that actually matter. Plus, privacy laws like GDPR require marketers to delete customer information after a certain amount of time. Revisit your customer journey maps and identify the information that is most important for you to improve the customer experience. Remove everything else.

Be aware of usability

Your CRM should help your team work better and seamlessly integrate with their day-to-day workflow. Regularly speak with your reps and ask about their experience with the CRM. How is it helpful? How can it be challenging? Take this feedback and create guides or training to coach your team. If most of your team dislikes your CRM or finds it too time-consuming, it might be time to make a switch. (See how Meta reduced the time they spent updating CRM records by 50 percent with Validity GridBuddy Connect.)

Run regular reports

A CRM can provide many different reports that help you understand where your revenue is coming from, how customers are progressing through the pipeline, and how your campaigns are measuring against their goals. CRM reports are essential for optimizing your sales and marketing strategies, and running regular reports can also help you catch if there may be an issue with your CRM data quality. 

Merge duplicate records

As we mentioned, some of your contacts will become duplicated. Every CRM user battles with duplicates and it’s best to merge them (otherwise known as data deduplication) before they create duplicate workstreams—and waste your team’s time. The best way to manage duplicates is with a tool that can detect, eliminate, and prevent duplicate records, like Validity DemandTools (get a free trial here). Otherwise, your reps will have to manually review fields like first and last name, email address, and home address to potentially identify your duplicates. 

Train your team

Navigating any CRM can be tough for even the most seasoned sales and marketing professionals, especially if they’re unfamiliar with the software. Regularly train your team on how to use your CRM and thoroughly explain how new customer information should be added and how profiles should be reviewed.

You cannot assume that your team will know exactly how to enter information or your company’s ideal way to manage data. So, ongoing training and reminders are necessary to empower everyone to keep your CRM clean. 

Overcoming the challenges of CRM data management

It’s natural for your CRM data quality to fluctuate over time, but by optimizing the data you store and training your team on the best ways to manage your data, you’ll have a much easier time engaging your customers in meaningful ways.

There are many other tips and best practices for you to effortlessly clean your CRM data and optimize your strategy to drive revenue. Download our free Ultimate CRM Admin Toolkit for more resources to overcome the challenges of CRM data management.