A new report from Validity Inc., the Massachusetts-based provider of data integrity solutions, indicates that many businesses may either overlook or not know that the data they keep on customers could be of poor quality, impacting their bottom line and employee morale as a result.

In its survey of more than 1,240 workers who use customer relationship management (CRM) systems and tools in the US, UK, and Australia, the Validity report revealed a worrisome disconnect: While 76% of the survey’s respondents initially characterized their CRM data to be “good” or “very good” at the onset of the survey, the respondents revealed later that poor-quality CRM data was, in fact, costing their company new sales.

Furthermore, the respondents said subsequent customer care initiatives proved inadequate because the efforts were based on faulty customer data. This caused organizations to lose customers altogether, noted the findings from Validity’s The State of CRM Data Health in 2022 report.

The burden imposed by poor data had other deleterious effects as well. Unethical practices sprang up, as 75% of the respondents, citing a lack of good customer data to work with, admitted to fabricating data to push out a narrative that their company’s decision-makers wanted to hear. Similarly, 82% said that rather than being asked to provide accurate data, employees were instead told to find worthwhile data to support a specific storyline. This meant that, in many organizations, company leaders were making important business decisions based on manipulated and inaccurate data.

Low-quality data also has negative effects on the relationship of co-workers, the report added. Two-thirds (67%) of the respondents said poor data quality created tension between the CRM maintenance team and the marketing department, jeopardizing employee satisfaction in an already difficult hiring climate. The findings extend to current CRM employees, who say they have less patience for the low-quality data and usability roadblocks that render their jobs difficult to carry out.

On top of everything was the long shadow cast by COVID-19. The pandemic served to heighten the tension between confidence and reality, the report pointed out, with 79% of the respondents agreeing that data decay has accelerated at an unprecedented rate because of the pandemic.

Kate Adams, senior vice president of marketing at Validity, stressed the importance of maintaining accurate CRM data. “Everything an organization does starts with, and relies on, accurate CRM data—from marketing campaigns to sales development activity to providing an excellent customer experience and beyond,” Adams said.

“While the findings of this report may initially be bleak, there is hope. As the initial shockwaves of the pandemic ebb, many organizations are realigning their budgets and planning to invest in the betterment of their data health and quality. The upward trends of companies dedicating a portion of their budget to hire a full-time CRM data quality employee, and taking data quality more seriously, in light of COVID-19-related data decay, are highly encouraging,” Adams added.

The Validity report includes many other findings of interest. For instance, 44% of respondents estimate that the companies they work for lose more than 10% in annual revenue because of poor-quality CRM data. Even so, only 19% of respondents say that CRM data quality is a high-priority initiative for leadership.