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4 Ways You're Misusing Your CRM Data Using your CRM data the right way can help boost revenue and deepen customer relationships. Here are four mistakes to avoid when it comes to utilizing that data.

By Jonathan Herrick Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

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A properly used customer relationship management system can turn a tiny operation into an industry leader. Unfortunately, some small business owners don't make full use of their CRM data -- or worse yet, don't utilize a CRM system at all.

Auto dealers have begun to use data analytics to determine the right price points to attract the right buyers. But they often find their efforts stymied by one major problem: inaccurate data resulting from a lack of (or misuse) of CRM tools and a rushed process that fails to account for the right metrics.

Diving into small business data analysis can feel like a Catch-22. You can't analyze the right metrics and glean the right insights without first gathering the right data. Leveraged correctly, though, a CRM solution will help keep your contacts organized and increase both the quantity and quality of leads. According to Software Advice, 74 percent of CRM users report seeing improved access to customer data through their systems. What's more, digging into our own data revealed that nurtured leads make substantially larger purchases than those who are not nurtured.

The facts are clear: CRM users outperform their competitors. So why don't all companies employ these tools, and how can current users make the most of their systems?

The rocky road to better data.

CRM solutions providers have targeted enterprise companies for years. As the adoption curve matured, vendors started creating solutions focused on small and medium-sized businesses.

The difference between the CRM needs of a younger startup and an established enterprise are stark. Most systems lack the ease of use that lean small businesses require. Smaller companies barely have time to keep the ship afloat, much less dedicate precious resources to learning cumbersome systems.

Related: 10 Apps and Tools to Make Your Small Business Better and More Efficient

When team members wear multiple hats, getting everyone up to speed on proper CRM use is a daunting task. Further complicating matters, small business owners often buy tools with more options than they need and usually fail to train employees to use those bells and whistles. Fancy features such as click-to-call, document tracking, direct mail integrations and e-commerce integrations sound nice, but their high price tag might not provide the kind of return your growing company needs.

Seeing the fruit of your CRM labor.

A CRM system isn't a miracle cure for sales and marketing woes, but with time, education and a commitment to learn, you can transform a basic CRM solution into a revenue-generating powerhouse.

Your small business CRM system can either become a powerful tool or a graveyard where time and money go to die. Avoid these four mistakes to get the most out of your CRM.

1. Capturing the wrong data.

If your customer profile seems incomplete, you might not be capturing actionable information. For example, if your sales team focuses on email outreach, forms should require email addresses. But do your sales rely on email?

Experian reports that companies lose 12 percent of their revenue on average to bad data. Streamline your data collection processes to reduce that number -- don't ask for data you don't need. If you have no plans to send direct mail, asking for contact addresses only reduces the number of people filling out your too-long forms.

Related: 4 Unconventional Ways To Use Your CRM Software

We've found that phone calls are a fantastic way to begin a sales conversation. Our business development representative reaching out to leave personal messages yields higher response rates than cold, impersonal bulk emails. We still do a lot of email marketing, but because we're able to segment based on user behavior, company size, location and other data that we've captured, our sales team can start relationships off on the right foot.

2. Focusing on the wrong metrics.

The fun parts of your data can easily distract you, but if you see a million site visitors and no form submissions, something is wrong. Eschew vanity metrics in favor of information that tells you where prospects are in your pipeline.

To avoid getting distracted by vanity numbers, Baseline recommends identifying metrics that impact your bottom line, establishing standard outcomes and measuring performance against those numbers. Provide the right metrics to the right departments. Marketers don't care about close rates -- salespeople do. Salespeople don't care about click-through rates -- marketers do.

We've used our own product to grow revenue by 2300 percent. We aren't distracted by vanity metrics such as opens and visits; we focus on user behavior. What are our visitors clicking on? We figure out what's working and what isn't in our marketing strategy and constantly pivot to improve those metrics.

3. Ignoring disorganization.

A well-organized CRM is as helpful as a disorganized one is harmful. If your CRM data is inconsistent (or worse, missing), you can't transform that data into revenue. For example, if a customer profile lacks information about past communications, the onboarding team might not have the information it needs from sales.

Related: What Happened When This Customer Relationship Management CEO Couldn't Remember the People In His Own Network

By analyzing our own data at Hatchbuck, for example, we've found that 86 percent of customers are willing to pay more for a superior customer service experience. Personalized customer interactions rely on relevant data to inform their development -- and that means keeping your CRM data as updated, organized and accessible as possible.

4. Failing to act on good data.

In my experience, an alarming number of businesses don't act on the data they capture, even when it's good data.

Quality CRM data should impact every aspect of the business from sales to marketing to support. Leveraging data allowed us to reimagine our buyer persona and start targeting the people most likely to purchase from us. Without action, the best data is as useless as no data at all. Metrics can help you understand how to create relationships, but they can't forge those connections on their own.

To illustrate, consider how companies such as Amazon, Airbnb and Patagonia treat their customers. Amazon connects people to a network of products and information they need. Patagonia provides outdoorsy types with a place to interact with each other and build community. Airbnb speaks to people who want to make new connections in new places.

How did they figure out and fill such clear-cut niches? By acting on their CRM data. If all these companies tracked were conversions, they'd never have arrived as such a valuable, deep understanding of the radical buyer: their ideal customer.

Successful companies don't stop at data collection -- they use their data to build relationships with customers that will last. With a robust CRM system, even the smallest companies can discover what their customers need and use that data to deliver welcome solutions.

Don't fall prey to these common CRM mistakes. Using this advice, you can leverage your data collection and turn your CRM into the engine that drives both your relationships and your revenue.

Jonathan Herrick

Entrepreneur Leadership Network® VIP

CEO of Benchmark

Jonathan Herrick is CEO and chief high-fiver at Benchmark Email, BenchmarkONE and Contacts+, bringing together 150 employees serving over 25,000 customers and 1 million users in 15 countries and nine languages worldwide.

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