Customer data is underutilized and the traditional approach of using a customer relationship management (CRM) platform to collect data from sales transactions is no longer enough, according to a new report.
The report, Engineering Data Mastery: Beyond Customer Obsession, from Virtusa, examines how companies leverage customer data for success. (You can download the report from Virtusa’s website — no registration required.)
The report found customer data is underutilized because many companies are not effectively collecting or using data from digital channels. This is especially true of data on product usage and customer feedback from social media and review sites.
Your CRM is not enough
CRM systems alone are insufficient, the report said, because collecting data from sales transactions, customer service interactions and marketing indicators, while essential, is now merely table stakes.
According to the report, customer satisfaction has only slightly increased despite significant investments in CRM software. In 2023, companies worldwide spent over $100 billion on CRM software, four times the amount spent eight years prior. However, customer happiness has barely increased since 2017.
The report found that companies don’t effectively use customer data and struggle to use the customer data they collect. There’s also a gap between collecting data and using it to improve marketing, sales, service, and product development.
But CRMs are only one issue identified in the report. IT infrastructure, systems and processes struggle to keep pace with the explosion of data. The report found digitizing data in a usable format is also a challenge, especially with unstructured data like audio, pictures and video.
Dig deeper: 5 ways to integrate LinkedIn with your CRM for better sales-marketing collaboration
Customer centricity impacts revenue growth
The report identified a spectrum of businesses, ranging from “customer-ignorant” to “customer-clairvoyant,” with the latter demonstrating higher revenue growth by collecting and utilizing more data.
The report found that customer-obsessed companies have 15% higher revenue, and customer-clairvoyant firms have 18% higher revenue than in 2020, while customer-ignorant and indifferent firms have only 4%.
According to the report, companies can use technology like digital sensors and smartphone apps to tap into customer data regarding how customers use their products and better monitor what customers say on social media and external sites, like product review platforms.
Companies can also leverage generative AI to analyze customer feedback, transform data and improve their data foundation, according to the report. It found customer-obsessed and customer-clairvoyant firms are more likely to use generative AI to transform their data. Companies using generative AI in data engineering have cut costs of adding new data by an average of 27% and time by 40%.
Dig deeper: Are you focusing on valued customers or volume customers?
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