Measure the success of your CRM strategy
I’m fairly new to the business intelligence game. Until recently, prices have far outreached the pocket books of most middle market companies. Not only was the software expensive, the consulting dollars were making a lot of consultants rich.
Fortunately, and much to the dismay of many of those companies, companies like QlikTech have come along and allowed me and my peers to provide some really cool stuff to the middle market.
Tactical Business Metrics
I just made that term up. I throw anything that supports measurements to things like the sales process tactical. Just because someone names a methodology Strategic Selling doesn’t make it strategic. Keep in mind that the sales organization derives it’s initiatives from a corporate vision. Let’s hope it’s customer centric!
Did you ever see one of those marketing brochures for an executive dashboard and think “man that’s cool!” Take another look because I generally find them to be somewhat of a joke. They’re designed with so many gadgets and KPI’s that the average human cannot possible process what they are seeing. Effective business intelligence should provide the user with information, not raw data. It’s the job of the consultant to make sure you don’t go down the marketing path when designing your metrics. You need something that tells you, right away and without thinking, whether things are good or bad.
I remember the first Executive Information System (EIS) I saw back in my banking days. It was so darned simple it was nearly perfect. There were three rectangles on the screen with labels. If the labels were green, the CEO could go back to his golf game. If they were yellow, he could click to get more information. If they were red, I assume people got fired. Of course, you have to trust that the color changes with some well defined risk guidelines, but you get the picture. To me, that was effective business intelligence in it’s purest form.
Strategic Business Metrics
I made this one up too. Since I write about about Customer Relationship Management (CRM), I want to emphasize that as you put your business case together for CRM, one of the things you should be doing is identifying what is going to improve. So, if you’re going to do that, you need a way to measure it. You could be trying to…
1. Incrementally increase revenue – your customer focused realignment could lead to the attraction of new customers at an increased rate. Referrals are great that way. If this is part of your plan, then plan to measure this increase relative to the implementation of your strategy.
2. Cost Reduction – Reducing the friction in your business by re-working your processes to be customer-centric will allow you to reduce your staff and increase your throughput. Your plan should identify where this will occur and how you will gain from them. You cannot justify the investment if you can’t measure them.
3. Improve your profitability – a reduction in friction is a gain in efficiencies, or maybe you’ll just come up with a better product mix. Whatever you do to extend the average customer lifecycle, you will need a plan in advance to measure your successes or failures. Slick business intelligence tools can help, but you can track a plan in a spreadsheet too.
4. Reduce lost opportunities – when you lose a customer you’ve lost an inexpensive future sale. When you’re customers get tired of you, there’s a reason and if you’ve addressed it in your plan, it needs to be measured. Prove that your new plan is working, don’t work off feelings.
Effective business Intelligence tools can help you measure the goals you’ve set. They are a horrible waste of money if you don’t set goals for your business. The KPI’s that come with most of these are focused on periodic accounting benchmarks and have little or no relationship to measuring CRM metrics. But if looking at pretty dials and sparklines makes your business more profitable…I’m happy for you. Don’t call me.
