How do I update fields with blank values?

To replace fields with null values, you must use Data Loader.

To open Data Loader, choose Start | All Programs | Salesforce | Data Loader | Data Loader.
Click Export and complete the wizard. When the operation finishes, click View Extraction.
To open your data in Excel, click Open in external program. Blank out the fields you want to update.
In Data Loader, choose Settings | Settings, and select Insert null values. To save your settings, click OK.
To reimport your data, click Update and follow the instructions.

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