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.
Middle market companies now have some options available because companies like QlikTech have brought affordable alternatives to the market that are not short on features. The big boys now have some explaining to do.
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!
I find some of the "dashboards" out there to be useless and extremely confusing. They either look like a vintage sports car, or there are so many low level "KPI's" on them that there no better than raw data. Let's be serious. Solutions for effectively monitoring business intelligence should provide information, not raw data. Why would you want to think about what you're looking at? Wouldn't it be better to know either everything's OK, or something is wrong with out having to process data in your head?
The first time I was shown an executive information system was 20 years ago when I was in banking. The simplicity was beautiful. All it had were three simple colored rectangles. Each represented a different area of responsibility. If it was green, everything was cool. If it was yellow, someone was probably already looking into things, but he or she could click for more info. It it was red, heads would probably roll. The key is that the executive trusted these colors.
Strategic Business Metrics
I like making up headlines like that. Since I consider CRM to be a strategic, customer-centric way of doing business, you should have decided up front what was going to improve and how you were going to measure it. To do this you'll need a means of presenting the results. You might be trying to...
1. Increasing revenues - changing to a customer-centric strategy can raise the rate of new referrals, possibly from word of mouth. You'll want to distinguish these from the rest, so plan for ways to measure it.
2. Reduce costs - when you reduce the friction in the moving parts of your business by realigning information flows to focus on your customers, costs savings are going to occur, especially when you introduce CRM technology to support these process. Your plan should identify these reductions and how you plan to take advantage of them. Measurement of those goals is key to evaluating your success.
3. Gains in profitibility - while creating efficiencies and identifying more profitable product and services mixes are great goals, they key is in planning for ways to measure them so you're not guessing at where you've succeeded and where you need improvement. Most of this could be done in a spreadsheet if absolutely necessary.
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. - 15246
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.
Middle market companies now have some options available because companies like QlikTech have brought affordable alternatives to the market that are not short on features. The big boys now have some explaining to do.
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!
I find some of the "dashboards" out there to be useless and extremely confusing. They either look like a vintage sports car, or there are so many low level "KPI's" on them that there no better than raw data. Let's be serious. Solutions for effectively monitoring business intelligence should provide information, not raw data. Why would you want to think about what you're looking at? Wouldn't it be better to know either everything's OK, or something is wrong with out having to process data in your head?
The first time I was shown an executive information system was 20 years ago when I was in banking. The simplicity was beautiful. All it had were three simple colored rectangles. Each represented a different area of responsibility. If it was green, everything was cool. If it was yellow, someone was probably already looking into things, but he or she could click for more info. It it was red, heads would probably roll. The key is that the executive trusted these colors.
Strategic Business Metrics
I like making up headlines like that. Since I consider CRM to be a strategic, customer-centric way of doing business, you should have decided up front what was going to improve and how you were going to measure it. To do this you'll need a means of presenting the results. You might be trying to...
1. Increasing revenues - changing to a customer-centric strategy can raise the rate of new referrals, possibly from word of mouth. You'll want to distinguish these from the rest, so plan for ways to measure it.
2. Reduce costs - when you reduce the friction in the moving parts of your business by realigning information flows to focus on your customers, costs savings are going to occur, especially when you introduce CRM technology to support these process. Your plan should identify these reductions and how you plan to take advantage of them. Measurement of those goals is key to evaluating your success.
3. Gains in profitibility - while creating efficiencies and identifying more profitable product and services mixes are great goals, they key is in planning for ways to measure them so you're not guessing at where you've succeeded and where you need improvement. Most of this could be done in a spreadsheet if absolutely necessary.
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. - 15246
About the Author:
Mike Boysen consults and writes on topics related to customer relationship management (CRM). His website, Effective CRM Consulting, is designed to educate businesses and consultants alike in what CRM truly stands for. He works with a top CRM consultancy that provides services from workflow realignment to technical implementations. You'll find more about effective business intelligence on his website
