Measuring the Success of Your CRM Program without Succumbing to "Analysis Paralysis"

(Originally published as a Customer Relationship Management column in the January/February 2002 issue of AFSMI's Sbusiness.)

By William K. Pollock

Customer Relationship Management (CRM) is more than just a means for supporting your constituent (and prospective) customer base - it also provides the tools for measuring, monitoring and managing your success in doing so. However, unlike some of the more formal and structured business disciplines, such as ISO 9000, CRM affords its practitioners a great deal of flexibility in terms of what they may measure, monitor and track over time. Still, there are two things that remain certain with respect to managing the overall CRM process:

  1. Too little information will prevent the organization from ever knowing whether or not its CRM initiative is really doing the job it was intended to do, and
  2. Too much information can bring the organization's management down to its knees in terms of "analysis paralysis".
In a recently published report, Gartner, Inc. states it believes that, "CRM analytics will command attention in 2002". We couldn't agree more! The firm goes on to say that, "Most enterprises recognize the value of customer data; however, transforming data into insight is challenging. Enterprises must go beyond basic metrics and reporting to leverage more-valuable insights."

Basically, what Gartner is saying is that no data or information are ever "wasted" if they are actually used - especially if their usage can lead to improvements in the way in which an organization supports its customers. However, even "actionable" data and information can be underutilized if there are no documentable means for assessing their impact on the organization's ability to improve its service delivery. Conversely, no matter how well-documented the data may be, if they do not lead to improvement, why continue to collect them?

There are several "rules of thumb" that can help to ensure that the data you need to monitor your CRM progress will be properly collected and used, and that "analysis paralysis" can be avoided. They are:

  1. Plan what data you will need as part of the total CRM planning process
    The initial CRM planning stage is the best time to lay out exactly what types of data you believe you will need, how you will want the data structured and presented, how you will want it distributed, and what you will want to do with it once you get it. While not all future data applications will be obvious at this stage, the key point will be to make sure the data is collected in the proper format, so that it will be distributed to the appropriate parties and, ultimately, used in the most effective manner. To ensure that this happens, it is critical to involve as many functional roles as possible in the initial planning process, and affording each party the opportunity to provide input and feedback as to what data will be collected, monitored and tracked over time.

  2. Never collect data that you do not plan to use
    Collecting data is expensive - doubly so, if you ultimately determine that you have no plan to use it. The critical rule is to only collect data that you will plan to use. If the data are collected, but not used, there are a number of potential downsides that could end up costing a great deal of money - or worse. For example, any data that are collected, but not used, will still result in allocatable costs for collecting and processing, following-up, correcting and updating, and distributing. Storage costs may also be involved, as well as incremental database management. However, a far more "dangerous" cost might be that some data - even though they may be determined not to be "relevant" to the overall success of the CRM operation, may still be used - and acted upon - simply because they exist. There are few things more counter-productive to the success of any business venture than acting upon - or reacting to - data that would otherwise not be considered as relevant.

  3. Always use the data you collect - or don't collect it anymore
    The converse of the previous point is also true: if you collect the data - use it! Collected data that are not used end up being especially expensive. However, collected data that are used - to make corrections, changes or improvements - end up being "bargains" in terms of their return-on-investment, impact and general "bang for the buck". Building this rule into the initial planning process will ensure that your organization will always have just the right data available - in terms of both quality and quantity - with nothing missing, but also, nothing extra (as in extraneous).

  4. Distribute the necessary data to the appropriate personnel
    Many companies make the mistake of collecting the right data, but not making it available to the right people. Managers should not necessarily have a monopoly on data - many non-managers also work on a "need-to-know" basis, and will have to have the data made available to them as well. Not distributing the data to the right individuals is equivalent to not having the data at all. By distributing it to the appropriately empowered personnel, you can ensure that it will be used as it should be.

  5. Track changes in data from period to period
    Knowing where you stand in each period, with respect to satisfying customers, meeting goals, improving operations, etc., is important enough. However, by tracking your performance over time (i.e., from period to period), you can take essentially "static" data and make it more "fluid". In other words, each set of your organization's periodic data can be used to establish a "snapshot" of exactly where it stands at any given moment. However, by tracking the data from period-to-period, you can establish a "moving picture" not only of where you stand, but also where you've come from, and where you're likely to be heading.

  6. Change/refine/update the data collection process as needed
    Not every piece of data that you suspect will be helpful at the outset of the planning process will ultimately prove to be useful in the long run. Therefore, it will be essential to monitor the use and impact of the collected data over time to determine whether or not some changes will need to be made. For example, some units of measurement may need to be changed (e.g., an increased number of calls per month may lead you to change your metric to number of calls per week, etc.), or some functions may require further distinction or separation (e.g., breaking out web-based self-help support activity from telephone support, etc.). These cases suggest that it is always good to evaluate the metrics you are using, the data you are collecting and how you are using the collected data on an ongoing basis.
Your customer base is always changing, your CRM program is constantly adapting and evolving, and your data needs are continually growing over time. It is for these reasons that you should always ensure that you are collecting the data you need; distributing it to those in the organization who have a "need-to-know"; empowering them to use the data effectively; tracking your success in transforming the data into measured improvements; and monitoring when it is time to make the changes that are needed. By doing this - but not overdoing it you can avoid falling into a pattern of CRM "analysis paralysis".

William K. Pollock is president of Strategies For GrowthSM (SFGSM), the Westtown, Pennsylvania-based services consulting firm specializing in strategic business planning, services marketing, CRM consulting, market/survey research, and customer satisfaction measurement and tracking programs. Bill may be reached at 610-399-9717 or via e-mail at wkp@s4growth.com.


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