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Metrics Should Define Results
Operational goals require effective operations--and that's where systems metrics come into play.
For the rest of the November 2004 issue of CRM magazine please click here
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Setting benchmarks to determine the success of a CRM initiative is a must. But according to Jonathan Becher, CEO of Pilot Software, measurement simply for measurement's sake is essentially useless. Metrics can't be the first step, he says, because most companies can't tell what the right metric is. It's easy enough, for example, to measure the number of calls handled by each contact center agent; but that figure alone doesn't convey any meaningful information if the goal is customer satisfaction. "Until you articulate the strategic objectives, you can't know what the metrics [should be]," he says. "Too often, people create the metrics [simply] because they can." Of the benchmarks used to gauge success in CRM, return on investment (ROI) has become today's most popular yardstick. ROI relies on meeting or exceeding the operational goals of the CRM initiative. Some companies are also using performance metrics, which measure how well the CRM system is supporting those operational goals. Today's CRM also requires forward-looking metrics, Becher says: "More operational metrics and less financial ones, more leading metrics and less lagging metrics, more 'outcome' and less 'activity.'" The problem, he says, is that "often we measure things we do as opposed to things that accomplish results." The former includes the traditional financial metrics: revenue, sales, profitability, and so on. "They're typically lagging metrics, ones that measure the past," Becher says. "CRM-focused organizations more than others need to look at forward metrics." Among these, he says, are brand awareness, lead quality, and sales forecast accuracy. These operational goals require effective operations--and that's where systems metrics come into play, according to Dan Koloski, director of product management for Empirix. "The line-of-business metrics are centered around the qualitative side: How well are we serving the customers, and how efficiently?" he says. "The systems metrics are telling us how well we're enabling that side." Koloski says metrics reduce controversy. "You can debate qualitative measures all day long," he says. "Business doesn't care about network bandwidth; they care that a caller sat on hold for 45 seconds. Detailed metrics are a language the line-of-business [exec] and IT can both understand--the response times and the system performance as seen by the end users."
According to Koloski, the metrics that matter most are those taken "when agents are serving customers... relating to how well we are able to serve those customers at a cost level that we [can] support. "End-user metrics are the critical set of data that have the ability to unite the conversation," Koloski says. "All the rest is noise."
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