When we started building Luru, we spoke to around 200+ revenue leaders and revenue operations leaders to understand what the top 3 problems in their mind were. Broken CRM hygiene, incorrect forecasting and poor adherence to processes were the top 3 issues that emerged. Almost 70% of the leaders believed that their CRM hygiene was poor. That is a staggeringly large number and we dived a little deeper to understand what was causing this. At the core of the challenge of good CRM hygiene was the “Phantom Data Stack” problem. It was not that there was no data about deals and the pipeline; just that it existed outside the CRM as a "Phantom Data Stack". In this article, let us discuss the nature of the Phantom Data Stack, the problems it creates, and some strategies to address these issues.
What is the Phantom Data Stack?
The Phantom Data Stack refers to customer data that lives outside of the CRM system, often distributed across various applications and tools. These can include email clients, spreadsheets, project management tools, note-taking apps, and more. This data, while critical for understanding customers and making informed decisions, is often hidden, fragmented, or difficult to access, leading to several problems for businesses.
“Only 32% of executives and 27% of employees believe their CRM system provides a complete, single view of customer information, but 90% of executives and a whopping 94% of employees find value in having this single source of truth.”
- State of CRM study by Salesforce and Forrester
Why does the Phantom Data Stack exist?
Understanding the reasons behind why the Phantom Data Stack exists is crucial for addressing the issue effectively. Here are some common factors that contribute to the existence of this hidden data:
- Rapid adoption of multiple tools: With the growing number of specialized applications and tools available to businesses, it is common for organizations and employees to adopt multiple platforms and new shiny tools to handle different aspects of their operations. This can lead to data being scattered across various tools, contributing to the Phantom Data Stack.
- The Underserved Stakeholder: A crucial factor leading to the problem is that a critical stakeholder has become an afterthought - the sales rep. Though the leaders use the CRM for reporting, analysing and forecasting, the person responsible for filling the CRM is the sales rep. While CRMs have become powerful tools that provide the ability to implement complex workflows and reporting, it misses the important role of making it simpler for the sales rep. CRMs unfortunately have non intuitive UI making the AE jump through hoops to achieve even simple tasks. Slow interfaces, multiple clicks to perform simple tasks and complex configurations have become the death knell for sales productivity resulting in sales reps using alternate tools to keep their data needed for selling
- Evolving Sales Workflows: The way sales teams work has evolved. Work happens across multiple mediums - in person, over the phone, on email, in zoom calls as well as on communication channels of Slack. CRMs have not adapted to this change.
- Lack of integration between systems: When businesses use multiple applications, they may not always integrate these tools with their CRM system. This can lead to important customer data remaining isolated in different platforms, rather than being centralized within the CRM.
Strategies to Address the Phantom Data Stack
- Centralize data: To prevent data from living in multiple locations, businesses should strive to centralize their customer data within their CRM system. This might require integrating various applications and tools with the CRM or using APIs to automatically import and sync data.
- Simplify processes: The answer to broken processes is not more processes. Revisit your process workflows. A common pitfall is to create processes for the 0.1% case. When processes to handle corner cases become part of the daily workflow, it leads to fatigue and frustration. When that happens processes get abandoned or shoddily followed
- Clean up your CRM : When we helped audit CRM for around 30+ customers, on an average 65% of the fields were legacy fields that were not used more than 10% of the time. This debt can keep mounting and result in unused fields workflows and processes
- Solve for the sales rep: Solve for the crucial stakeholder. Implement in tools like Luru that makes the life of sales rep easier. The lesser the friction and context switches, better is the quality of data in CRM. This is the reason there is a rise in the adoption of revenue productivity tools like Luru.
- Leverage automation: Utilize automation tools to reduce manual data entry and streamline data management processes. This can help minimize the risk of errors and ensure that data is updated in real-time.
The Phantom Data Stack is a significant challenge faced by businesses in managing their customer data effectively. By addressing the root causes of this issue and implementing strategies to centralize, organize, and maintain high-quality data, organizations can improve decision-making, enhance customer experiences, and ultimately, achieve better results.