Managing product master data in a CRM might seem convenient, but anyone who’s ever tried quickly discovers its limitations. CRMs are designed primarily for customer relationship management, focusing on organizing customer interactions, sales pipelines and marketing efforts. While they are excellent tools for these areas, they can’t handle the complexities of detailed product data.
The risks associated with using a CRM for product master data include data integrity issues, operational inefficiencies and challenges with integration and scalability. Ultimately, these limitations can lead to outdated or inconsistent product information, impacting everything from compliance to customer satisfaction.
Instead, a dedicated master data management (MDM) platform is better suited for this task, offering robust data enrichment, validation and seamless integration capabilities that ensure your product data is up-to-date, accurate and complete.
Understanding Product Master Data Management
What Is Product Master Data?
Product master data is all information related to your products, including:
Descriptions
Specifications
Attributes
SKUs
Safety data
Accurate and consistent product data is crucial for efficient operations, regulatory compliance and customer satisfaction.
Product master data generated by chemical and ingredient companies is complex. It must account for raw material inputs, formulations and dozens of specification attributes.
What Is Customer Data?
Customer data is any identifying information your customers provide while interacting with your business, including:
Identity data: email, phone number, address, etc.
Descriptive data: market, industry, company size, etc.
Qualitative data: answers to questions such as “what are you hoping to achieve by purchasing this tool”
Quantitative data: transactions, customer acquisition costs, average purchase amount, etc.
Strengths and Limitations of CRM Systems
Strengths of CRM Systems
CRM systems offer several strengths that make them valuable tools for businesses:
Customer Data Management: CRMs centralize and organize customer information, making it easy to access and update customer profiles, purchase history and preferences.
Sales Pipeline Tracking: CRMs allow businesses to monitor and manage the entire sales process, from lead generation to closing deals, helping to optimize sales performance.
Marketing Automation: CRMs often include tools for automating marketing campaigns, tracking customer engagement and analyzing the effectiveness of marketing efforts.
Improved Customer Service: CRMs help businesses track customer interactions, allowing for personalized support and quicker issue resolution.
Data Analytics and Reporting: CRMs provide insights through data analysis, helping businesses make informed decisions based on customer behavior, sales trends and more.
Collaboration Across Teams: CRMs facilitate collaboration by giving different departments (e.g., sales, marketing, customer service) access to the same customer data, improving coordination and consistency.
Scalability: Many CRM systems can scale with a business as it grows, accommodating increasing amounts of customer data and more complex processes.
Limitations of CRM Systems When Managing Product Data
CRM systems, while powerful for managing customer relationships, have several limitations when it comes to efficiently managing product data:
Lack of Support for Complex Product Hierarchies: CRMs are not designed to handle intricate product structures, such as multi-level categories or variants, making managing large and diverse product catalogs difficult.
Inadequate Data Validation and Enrichment: CRMs typically lack advanced tools for validating and enriching product data, leading to potential inaccuracies, inconsistencies and incomplete product information.
Limited Scalability for Large Product Catalogs: As the number of products grows, CRMs struggle to manage and organize vast amounts of product data efficiently, often resulting in slower performance and increased errors.
Challenges in Data Synchronization: CRMs often face difficulties in synchronizing product data with other business systems (e.g., ERP, PIM, e-commerce platforms), leading to discrepancies and data silos.
Insufficient Handling of Product-Specific Attributes: CRMs generally don’t provide the flexibility needed to manage detailed product attributes, specifications or technical data, which are crucial for accurate product representation.
Difficulty Maintaining Up-to-Date Information: Updating and maintaining product data across multiple systems, including CRMs, can be unmanageable and prone to errors, leading to outdated or inconsistent product information.
Limited Reporting and Analytics for Product Data: CRMs primarily focus on customer-related data, offering limited reporting and analytics capabilities for product performance, trends and lifecycle management.
Risks of Managing Product Master Data in CRM
Managing product master data in a CRM system poses several risks that can impact business operations and efficiency:
Data Integrity Issues: CRMs are not built to manage complex product data, leading to potential inaccuracies, duplication or inconsistencies in product information across different systems.
Operational Inefficiencies: Relying on a CRM to handle product data can slow down processes like updating product details or launching new products. CRMs lack the specialized tools needed for efficient data management.
Difficulty in Integration: CRMs often fail to integrate seamlessly with other essential systems like ERP, websites or product catalogs, resulting in data silos and misaligned product information across channels.
Increased Workload for Teams: Managing product data in a CRM can create additional responsibilities for sales, marketing and operations teams. These teams may have to manually input or update product information, leading to errors and pulling their focus from their primary goals.
Compliance and Governance Risks: CRMs typically lack robust data governance features. This makes it harder to ensure compliance with industry regulations, such as data privacy laws, and to maintain strict control over who can access or modify product data.
Poor Customer Experience: Inaccurate or outdated product data in a CRM can lead to misinformation being passed to customers, damaging trust and negatively affecting customer satisfaction.
Scalability Challenges: As the product catalog grows, CRMs may not scale effectively, leading to performance issues, data management challenges and increased risk of product information errors.
Advantages of a Dedicated Master Data Management Platform for Product Data
A dedicated master data management (MDM) platform offers a dedicated solution for managing all aspects of product data. Unlike CRMs, MDM platforms are built for product data management, allowing companies to maintain a single source of truth for all product data and related documents.
Centralized Data Repository for Product Information
An MDM platform creates a central repository for all product information, eliminating data silos and ensuring consistency across different departments and functionalities. This streamlines workflows, improves data accuracy and facilitates collaboration across teams.
Advanced Data Validation and Enrichment Capabilities
A purpose-built chemical industry MDM platform offers preset data fields and structures that accommodate the intricacies of chemical and ingredient products. This allows companies to capture detailed information about formulations, safety data, regulations and various product variations.
Integration Capabilities with CRM and Other Software
MDM platforms excel at integrating with various software solutions, including CRMs, ERPs, LIMS and e-commerce platforms. This seamless integration ensures a single source of truth for product data across all systems, eliminating manual data entry and reducing the risk of errors.
Product MDM integrated with a CRM ensures that the CRM is consistently fed up-to-date, accurate and consistent product data. This provides a better customer experience and ultimately results in efficiency in the sales process.
Real-world Horror Story of Managing Product Master Data in CRM
A multi-billion dollar silicon materials manufacturer embarked on a digital transformation project to improve its customer experience and streamline its internal processes. They started by repurposing a CRM to create a PIM and TDS builder.
The manufacturer wasted a year building a custom solution that didn’t provide a data model to handle the details and nuances of chemical technical information. The project exceeded the budget by 1000 percent, and the company still couldn’t move their product data into the system.
Success Story: Managing Product Data in the Knowde Master Data Management Platform
Knowde helped a global leader in specialty chemicals extract, organize and enrich product data from over 2,500 documents in 3 days. Knowde’s AI-driven Knowledge Engine ingested their product data, extracted all the relevant product attributes from every source, and mapped the clean data back to a structured product hierarchy.
Each product attribute was tied to a single taxonomical term to ensure standardization across all suppliers and products. As a result, each product record is now enriched with data extracted from the company’s product documents, ERP and 3rd party databases.
The Takeaway
While CRMs are indispensable tools for managing customer relationships, they fall short when it comes to handling product master data. The complexities of product data, especially in industries like chemicals and ingredients, demand a specialized approach that CRMs simply cannot provide. Relying on a CRM for this purpose can lead to data inconsistencies, operational inefficiencies and integration challenges that hinder your business’s ability to scale and meet customer expectations.
To overcome these challenges and ensure your product data is accurate, up-to-date and fully integrated across all business systems, investing in a dedicated MDM platform is essential. An MDM platform not only addresses the limitations of CRMs but also empowers your business to drive digital transformation with a reliable single source of truth for all product information. By making this strategic shift, you can unlock greater efficiency, enhance customer experiences, and position your business for long-term success.
Your central source of truth for master data.
Easily manage your clean master data from within your dedicated data platform.
