October 27, 2020
Did you know that 62% of organizations rely on marketing and prospect data that’s up to 40% inaccurate? Or that 65% of people’s titles and/or job function change annually? It seems daunting, right?
We know how impossible it can feel, and the way that businesses worldwide struggle with keeping their data clean and up-to-date. While some firms have the ability to make data integrity a full-time job, we realize this isn’t the case for everyone, and that many firms can’t afford to add a full-time position specific to data integrity.
Most of us within the investment industry want CRM adoption within our firms; everyone knows their sales team needs a CRM, however, it’s the data within the CRM that becomes a problem.
For this reason, databases have gotten a bad reputation throughout the investment industry. In fact, many firms are hesitant to invest in a database at all, because they fail to see them as anything more than an expensive, administrative nightmare.
But what happens to data that remains inaccurate and incomplete? It feels like an uphill battle to update it properly, but it’s more than just that. There are several hidden costs stem from letting your data linger without updating it. These costs come in the form of lost revenue for your sales team, as well as time wasted researching and doing administrative tasks.
Some firms remedy this with the help of a Database Administrator. The problem here is that they don’t have the industry expertise to truly understand the pieces of data that are missing or incomplete. So, more often than not, data management falls to the sales team.
At Dakota, an investment sales team that has raised over $30B since 2006, we know that good data can make or break a sales team, which is why we created Dakota Marketplace. Marketplace is an institutional investor database created for salespeople by salespeople, using the very same data we use ourselves every day. We’ve streamlined our own sales process, and want to share that value with you.
In this post, we’ll break down four of the hidden costs that come from inaccurate and incomplete data. We’ll also show you how to improve it so that your sales team can spend their time wisely: setting up meetings and driving revenue for the business.
Knowing your data has a problem is the first step. Next is determining which kind of data problem you are encountering. There are two primary problems we run into often: inaccurate data, and incomplete data. Here’s how they’re different:
When you hire a salesperson to bring their expertise in their field to your company, it’s probably safe to assume that you expect them to sell. However, if the salespeople you’re hiring are spending more time chasing down leads and accurate contact information, chances are they’re doing more research work than sales work.
This wastes their time and expertise and requires them to spend less time setting meetings and making calls. With accurate information, they could solely focus on maximizing their time moving through a list of leads that has already been developed. In even a short amount of time, this wasted time and energy adds up, but you might just find that it’s the most inexpensive loss on this list. This wasted effort can also take a toll on the salesperson’s overall job satisfaction and motivation, leading to a further decrease in productivity and results.
A more expensive loss is not having a large and broad total addressable market (TAM), which occurs as a result of incomplete data. When you miss out on opportunities in the investment industry, that means missing out on hundreds of thousands, if not millions of dollars in investment opportunities.
After all, you can only sell to the people you know about, and if your CRM is missing a large segment of your market, you’re missing out on the opportunity to earn that business. The lost opportunity in sales becomes massively expensive to make up as time goes on.
At Dakota, our motto is to always sell the apple to the apple buyer. It’s a waste of your time to try to convince an orange buyer that he might like an apple. Take it a step further. Say there are 100 people in your city who buy apples. The question is, how many people that grow apples know all 100 of those buyers? How many people know 30 buyers and are missing the other 70?
When your sales team doesn’t know everyone they can call on, you lose out on a large pool of potential buyers and sales.
We’ve talked a lot about how bad and inaccurate data comes at the expense of the salesperson, but it impacts your sales leaders and managers, too. It hinders their ability to set expectations and hold their team accountable for things over time.
Knowing your TAM, as well as the accuracy of your TAM, is critical for a sales leader. It means more emails, more contacts, more people to call on, and therefore more ways to win business.
It comes down to the law of large numbers in sales. Calling on more people who buy what you sell gives you more business. This may seem like common sense, but not everyone focuses on having a truly complete TAM.
However, don’t stop there. It’s equally important for sales leaders to continue growing the TAM as well, as the key is to not only know what you have and to always be growing it. If you’re constantly growing your TAM, this means you can continue to set stretch goals for your team. This helps them feel more motivated and drive more sales that you might not have thought possible before.
One of the biggest advantages of having a complete dataset is the ability to build a robust email marketing list and continue to grow your prospect base. When properly maintained, an email list can be a huge asset for a company. You can leverage email marketing more effectively if you have more emails in your database. The stronger your email marketing list is, the more reach you’re going to have.
Below is a look into the amount of contact turnover that can occur in just three months within the industry:
If your database of contacts is incomplete or full of inaccurate email addresses, you’ll see one of two outcomes. You’re either going to be left with bounced emails or a small list size that is not able to maximize the potential of your marketing efforts. If your emails are being bounced, this could have the compound effect of hindering your company’s sender reputation over time. This means that even when you do have accurate contact information, your messages may be marked as spam and will not be delivered.
This once again goes back to your TAM and knowing who you can potentially market to and sell to. If you’re missing 70% of your market, you’re missing out on marketing opportunities, and the efforts you are making are likely being wasted.
Every business should aim to have their CRM data accurate and updated on a daily basis (we realize this is easier said than done, but this is the goal). This allows salespeople to focus on selling, and removes the administrative component from their day to day.
There are a variety of software products available that help ensure your data is clean (check out the tools we recommend) so that you can maximize the time and effort spent on selling. This is really a band-aid type solution that can temporarily solve some of these issues.
The biggest problem facing most firms is not knowing the complete TAM, which costs investment firms hundreds of thousands, if not millions, of dollars in missed opportunities. The investment industry is a huge space, and we know it can be difficult to get your arms around it all. With everything from RIAs to MFOs, family offices, banks, broker dealers, consultants, TAMPFs, foundations, and endowments, etc., it’s a vast landscape of potential customers.
This is why you need a partner: someone to bring it all together for you and help identify your complete TAM. By investing in an outsourced database of accounts and contacts, you have a ready-made lead generation strategy, as well as a data source that is constantly updating itself.
Amy Sariego is the Director of Content Marketing at Dakota.
