You Are What You Measure
The measurements you track are an indication of the customer relationships you want to have.
For the rest of the October 2009 issue of CRM magazine please click here

Can we measure how much has been written about metrics and measurements for customer relationships? There’s obviously boundless interest: At every conference, at least one person approaches me with a version of the classic “What should be the average handling time of calls for financial services customers in the Midwest?”

But the questions themselves are often flawed. The person asking is seeking any number that will prove to her superiors that her customer service operation is better than average. The questions she should ask include “What do my measurements say about me?” and “What do those measurements say to my customers?” and “How do the measurements determine the future profitability of my business?”

Since the measurements you track are an indication of the customer relationships you want to have, let’s examine the options.

The Self-Centric: First there are those who measure themselves according to operational numbers — average handling time, sales costs, and other internal metrics. It’s all about them and their ability to meet their operational numbers. They are self-centric — and their customer relationships are characterized by the same nature. Every move they make is based on what they get out of it.

The Lip-Servicers: This second group comprises those who need to fake it. They know that they ought to involve the customer in the measurements, but they do so as lip service only, with no true commitment. They’ll ask general satisfaction questions that will read as “You forgot to write us a ‘Thank You’ letter, so we decided to give you a second chance.” Customers see through this fake commitment and will reciprocate with no commitment at all. One Forrester Research study noted that, even among satisfied customers, only 17 percent stated they would never consider the competition.

The Crowd-Followers: These people are trying — they want to do better — but they don’t know how. They score well on intentions but low on understanding and depth. They will rush to the Net Promoter score (NPS) because they read about it and heard it’s the gold standard. NPS is a good measure but not sufficient. [Editors’ Note: See the Connect column, August 2009, for more on how to move past NPS.] You need to know what makes you unique and what drives customer actions in your specific relationship. NPS is too generic for that. It’s a demanding metric to pursue — I give them credit for that. I just wish they knew what to do with it.

The Differentiators: These are the rare few who measure true customer actions as a measure of their success. They subject themselves to the ultimate measure: “Did we exceed your expectations?” They do not seek to please but to surprise. They do not rest on satisfaction laurels but demand ideas for continual improvement. They seek ways to differentiate themselves and measure against their unique brand promise. They form true, lasting relationships because their measurements are authentic and unique to their value proposition.

What your measurements say about you goes beyond the questions you ask, to the actions you take. If customers’ insight is not translated to actions — fast — they register a breach of trust: “Don’t ask for ideas if you’re not planning to use them,” they say, emphasizing the sentiment with their wallets as they head to your competitors.

Your employees notice as well. They see those customer survey reports resting on a shelf gathering dust and they understand exactly where your customer commitment is. They take operational guidance from your actions, related to your measurements.

When deciding on your measurements, the first question you ought to ask is, “What relationship do I want to drive?” A self-centric relationship will require the operational models. A noncommittal one-night stand aims for fake satisfaction. But for a long-term, profitable relationship, you better think carefully before you set your measurements. They better drive inspirational performance on a regular basis, and that means they must be demanding and uncompromising. Measure what matters to you, based on the type of relationship you want.

Lior Arussy (lior@strativity.com) is the founder and president of Strativity Group (www.strativity.com). He is the author of several books, including Excellence Every Day (Information Today, Inc., 2008), his most recent, an excerpt of which appeared in CRM’s May 2008 issue. To learn more about customer strategies, sign up for his newsletter at Strativity Group's homepage.

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