When to Invest in a PIM Software—The Facts, the Need & the Indicators
When companies pursue aggressive growth strategies, they cannot leave digital strategies out of the equation. Product data is a crucial pillar in any digital strategy. Customers use product data to make informed buying decisions, and brands use it to optimize their digital commerce initiatives and manage inventory. But with the increasing influx of data, ensuring consistent and accurate product information across various customer touchpoints becomes cumbersome.
A well-defined product data management practice ensures your products are easily discoverable and accessible to potential customers. By creating the leverage of product data, you can amplify productivity, improve data accuracy and consistency, and ultimately boost sales.
Succinctly, a robust product information management (PIM) strategy has an undeniable strategic importance for digital success.
What is PIM?
A Product Information Management (PIM) system is a software that helps businesses efficiently manage their product data. It allows companies to store all the product information in a centralized system and distribute it across various sales and marketing channels.
It enables businesses to improve their product data quality, keep data consistent and accurate, and streamline their distribution process. With the help of a PIM system, organizations can enhance their customer experience and increase their sales by delivering a more compelling and engaging product experience.
PIM comes to rescue as a superhero and the below statistical findings are worth noting:
- Around 80% of businesses using PIM software say it has improved their product data quality.
- More than 68% of the companies that use PIM software say it has helped them increase their sales.
- Nearly 60% of the companies that use PIM software say it has improved their customer experience.
- 50% of the companies that use PIM software say it has facilitated them to reduce their costs.
- Around 40% of the companies that use PIM software say it has increased their productivity.
These statistics show that PIM software is a valuable asset for businesses of all sizes. So, to improve your business outcomes, consider investing in a PIM software.
Every company is engaged in the business of fulfilling end customer’s needs profitably while ensuring ultimate customer experience. Now this constant drive for growth leads to quick increase in product lines and all associated complexities.
In the pre-digital era, the complexities like vendor management, inventory management, quality management, production management, sales and marketing management and logistics and channel management were enough to take the business to the brink of collapse with manual processes and thus the advent of ERP and all associated tools happened.
With increased focus on customers, CRM suites came into being. For automating the sales process, Salesforce is commonly used.
PIM (Product Information Management) systems were invented to streamline the management of product data across various channels and platforms. In the past, traditional ways of managing product data involved manual entry into spreadsheets or databases, which were prone to errors and inconsistencies.
As businesses started expanding their product offerings and channels, managing product data became increasingly complex.
Today customers across age groups prefer to buy online, particularly the Generation Z. The new challenges that are being faced now cannot be addressed by legacy systems that were not built to address these challenges in the first place.
Modern ways of managing product data involve smarter PIM systems that centralize and automate data management with product analytics and the contextualization of product data for brands, customers and channels.
What could possibly go wrong without a PIM system?
For example, a company that sells shoes might store product information in various places, such as its spreadsheets, master data files, ERP system, CRM system, or other home-grown systems.
This can make it challenging to keep the information accurate and consistent. For instance, if a customer asks about the availability of a particular shoe in their preferred color choice and size in a nearby store, the employee might have to check multiple systems to find the answer.
In addition, if the information does not land timely, it can lead to a frustrating customer experience
Now, the company is about to launch its new product line. It is planning and preparing for the launch without PIM software.
Here are the possible scenarios where the company could face several challenges.
- The product metadata and media assets are stored in a variety of different systems. This makes it difficult to manage and keep it up-to-date.
- When product data comes from multiple places, keeping it accurate and consistent can be difficult. This can lead to errors in pricing, availability, and other important information.
- When data is updated, then it may get duplicated in different systems. This leads to confusion and errors.
- Manually managing product data is time-consuming and error-prone. This can lead to wasted time and resources, as employees spend hours finding and correcting errors.
- The ability to reach a wider audience. The company won’t be able to reach a wider audience by making their products and services available through multiple channels.
- Customers who do not get the information they need about a product are less likely to buy it, leading to poorer customer experience.
When these challenges grow more significant, the product launch can become cumbersome. Customers may start complaining about insufficient information, leading to low trust in the new range of products. Eventually, the sales targets may not meet the desired expectations.
As in any real situation, the need for a dedicated product information management or PIM solution does not arise suddenly. The need arises over an extended period of time during which the companies first try to address the challenge using some patch ups of existing ERP or CRM or any other existing file systems.
Obviously, the chaos is only going to increase with time, as the company scales and adapts to the new digital reality.
1. Organization-level indicators
- Whether product information management is a problem that needs to be solved immediately — Is it a common or unique business problem?
- The number of products being launched each year. The more products being launched each year, the more difficult it is to manage product information manually.
- The urgency to improve product data quality. Difficulty in centralizing and managing product data more effectively. Different departments complain about data accuracy and consistency, reducing sales and decreasing customer satisfaction.
- The need to improve productivity. The operational team spends a lot of time finding the required product data and struggles to utilize it optimally. This can lead to slower decision-making, compromised customer service, and reduced sales.
- The necessity to support omnichannel commerce. Customers increasingly shop across multiple channels, such as online, in-store, and through mobile devices. Without a PIM system, it is hard to synchronize product data across multiple channels, such as online, in-store, and mobile devices.
- The mission-critical requirement to support global sales. If the organization sells products in multiple countries, it faces the challenge of managing product information in multiple languages and currencies.
- The need to improve data governance. Data governance is essential for organizations of all sizes. The organization can improve data quality, reduce data risks, improve decision-making, and comply with regulations by improving data governance.
- The importance of cross-sell/up-sell. Organizations miss out on a number of opportunities if they do not cross-sell or up-sell their products. Without up-to-date data, segmenting their lists and sending targeted offers is hard.
- Better preparation for future customer experience. Data is a powerful tool that can be used to improve customer experience. The organization can gain insights into customer’s behavior and preferences by collecting and analyzing data. This information can be used to personalize their products and services, target your marketing efforts, and identify areas for improvement.
2. Capability specific indicators
In addition to the signals mentioned above, organizations must keep track of the below indicators too:
The current state of product information management
Organizations should assess the current state of their product information management processes. This includes identifying the challenges that they are facing, the resources that they have available, and the goals that they hope to achieve.
Some common challenges that organizations face include:
- Lack of a central repository for product information
- Inaccurate and outdated product information
- Manual processes that are inefficient and error-prone
- Difficulty in complying with regulatory requirements
Assess the product information management capabilities that enable the contributions to the overall enterprise strategy, such as:
- Data governance: The ability to define, manage, and enforce data policies and standards.
- Data quality: The ability to ensure that data is accurate, complete, and consistent.
- Data access: The ability to provide users with access to the data when needed.
- Data integration: The ability to combine data from different sources into a single, unified view.
- Data analysis: The ability to use data to identify trends, patterns, and insights.
- Data visualization: The ability to present data in a way that is easy to understand and interpret.
3. Customer-driven indicators
- Customer expectations: Customers increasingly expect a seamless, personalized shopping experience across all channels. They want to be able to start a purchase on their phone and finish it in-store, and they want to receive recommendations based on their past purchase history. A PIM solution can help organizations deliver on these expectations by providing a single source of truth for product information and enabling them to personalize the shopping experience for each customer
For example, a PIM solution can be used to create a customer profile that tracks a customer’s purchase history, browsing behavior, and preferences. This information can then be used to personalize the shopping experience for each customer by recommending products that they are likely to be interested in.
- Competition: The competition is fierce, and organizations must find ways to differentiate themselves. As an organization grows, it becomes increasingly difficult to manage product data. Moreover, they must maintain a competitive advantage regarding product information quality, accuracy, and availability.
For example, a PIM solution can be used to ensure that product information is accurate and up-to-date across all channels. This can help organizations to improve their customer satisfaction and to increase sales.
- Regulations: Organizations are subject to various regulations governing the accuracy and presentation of product information. Organizations must comply with these regulations by providing a central repository for product information and automating the process of updating product information.
For example, a PIM solution can be used to ensure that product information is translated into the appropriate languages for each market. In addition, it can help organizations to comply with regulations governing the accuracy of product information in different languages.
- Track customer complaints: One of the best ways to improve customer experience is to listen to your customers. What are their complaints? What are their suggestions? By listening to your customers, you can identify areas for improvement and make changes that will make them happy.
Take action before customers complain. Be proactive in identifying and addressing potential problems. It will show your customers that you care about their experience and are committed to providing a great experience.
Results comparison: With PIM software vs. without PIM software
Organizations that use PIM software
- Improved product data quality: PIM software can help businesses to centralize their product data and make it easier to manage. This can lead to improved data accuracy and consistency, leading to increased sales and improved customer satisfaction.
A study by Gartner found that organizations that use PIM Software have an average of 90% accurate product data, compared to only 60% for organizations that do not use PIM software.
- Increased sales: PIM software can help businesses to make their products more visible to potential customers. This can be done by creating and managing product catalogs, optimizing product listings, and distributing product information across multiple channels.
A study by Forrester found that organizations that use PIM software see an average increase in sales of 15%, compared to only 5% for organizations that do not use PIM software.
- Improved customer experience: PIM software can help businesses to provide customers with accurate and up-to-date product information. This can help customers to make informed purchasing decisions and improve their overall experience with the company.
A study by McKinsey found that organizations that use PIM software see an average increase in customer satisfaction of 10%, compared to only 3% for organizations that do not use PIM software.
Organizations that do not use PIM Software
- Poor product data quality: Organizations not using PIM software often have inaccurate and inconsistent product data. This can lead to customer dissatisfaction, lost sales, and fines
A study by the National Retail Federation found that 70% of consumers have had a negative experience with a retailer due to inaccurate product information.
- Reduced sales: Organizations that do not use PIM software often have difficulty making their products visible to potential customers. This can lead to lost sales and missed opportunities
A study by the Aberdeen Group found that organizations that do not use PIM software lose an average of 10% of potential sales due to poor product information.
- Poor customer experience: Organizations that do not use PIM software are at risk of delivering customers with inaccurate and outdated product information. This can lead to customer dissatisfaction, lost sales, and negative reviews.
A study by the American Marketing Association found that 60% of consumers are less likely to do business with a company that provides inaccurate product information.
Key recommendations during PIM software investment
Know the skills and experience of the team
Organizations should assess the skills and experience of the team that will be responsible for managing the PIM solution.
This includes identifying the gaps in knowledge and expertise and developing plans to address them.
Validate the level of customization required
- Are there limits on how the PIM software can be customized or configured when implemented?
- Will the selected solution work out of the box, or do they need special training and tuning?
- Does the PIM solution need to integrate with specific enterprise applications or business processes?
- How much data needs to be combined and shared from different lines of business, and with what frequency?
- Does the PIM solution need a tailored workflow and user experience for specific roles or the industry vertical?
Assess the implementation timeline
Organizations should assess the timeline for the PIM implementation. This includes identifying the key milestones and developing a plan to meet them.
- Does it need to be up and running in a few days or weeks?
- Or is having a custom solution more critical?
- What type of PIM deployment is more convenient (cloud or on-premises)?
Measure the overall cost
Product Information Management (PIM) system investment cost can vary depending on several factors, including the size and complexity of the organization, the features and functionality required, and the type of system (cloud-based or on-premises).
Here are some of the different costs associated with a PIM system:
- Initial purchase price
- Subscription fees
- Implementation costs
- Training costs
- Maintenance costs
A PIM system can provide many benefits for organizations, including improved decision-making, customer service, compliance, and the ability to scale the business. Investing in product information management software at the right time is like planting a seed in the right season.
Just as a seed needs the right conditions to grow into a healthy plant, investing in PIM software at the right time can help your business grow and thrive.
Source: Minds Task Technologies Knowledge Center