• July 14, 2010
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Analyze This!

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It has been said, famously, that you can’t manage what you can’t measure. I’d like to attribute this quote, but there are nearly a dozen conflicting citations. This maxim is nowhere truer than in CRM, a discipline that has been devoted to corporate self-measurement from the get-go. Based on what I’ve seen the past few years, analytics will continue to grow as an important part of CRM practices, and rightly so. Understanding why your customers do what they do so you can serve them better is a laudable goal—one with the added bonus of enabling you to squeeze more money out of them—but achieving that goal hasn’t always been easy. Hell, it hasn’t even always been reasonable.

Efficiency experts, the forerunners to management consultants, were all the rage in the 1950s. Back then, it was thought that streamlining your operations was the path to profitability (a sentiment that fit nicely with the streamlined motif in jet aviation that carried over into automobile design and, eventually, pretty much everything else from that era). When businesses realized that they could only squeeze a nickel ’til it bled five pennies, the focus shifted to business processes—internal ones at first, but expanding to customer-facing ones as best practices emerged.

Only one problem with all this: It makes no bloody sense. Looking at processes and efficiencies to better serve customers is like looking at your feet as you try to find your way through a maze. No battle plan survives contact with the enemy, and no CRM plan survives deployment to the real world—unless the customer has been involved from the start.

Lucky for us we’re entering—in fact, we’re actually smack in the middle of—the social CRM era, in which we have more ways to involve customers than ever before. If anything, there are too many ways, and we’d like some of them to shut up a little bit. The advent of social CRM meant instead of navel-gazing for fun and profit, businesses had to behave like middle schoolers and obsess over what everybody was saying about them. (“My customers like me, but do they like me like me?”)

Prior to the advent of tools for social media analytics, a business that tried to listen to its customers could only get anecdotes and random chatter, with results that could be delightfully crazy and wrong-footed. There are too many ways businesses can (and have) gotten social engagement wrong. Think of it as a middle-aged dad trying to connect with his middle-school-aged kid by using outdated and/or poorly applied slang: “Yo, dawg, I don’t wanna hear from your peeps that you been huffin’ at some rave on the DL, ’cuz that’s totally whack.” (Makes me cringe. Fo’shizzle.) Any kid would tune out, and so do customers.

Today, there are a great number of vendors hawking tools for social media analytics that promise to pump data into CRM. There’s little point in naming them here, because whether I list one or a dozen, some twerp will chime in recommending one I missed. The availability of analysis might seem like an obvious boon, but I’m not sure yet. Quirks and differences in a particular vendor’s package could lead to “Dewey Beats Truman” results, or have a company wondering if it’s listening to the right customers. Paranoia will reign as executives second-guess their data, wondering if they aren’t dining on—or being force-fed—false information.

Worse, we’re well on the way to generating more raw data than most folks can imagine: According to a report in The Economist, in 2010 we’ll produce 1,200 exabytes (each of which equals 1 billion terabytes) of data, 95 percent of which will be unstructured—the kind of data that social media analytics is designed to sort and understand. Assuming that tonnage of data could be analyzed, even the (minuscule) portion applicable to a given company might be far more than anybody’s willing to rationalize. Entire departments will be paralyzed by the simple act of trying to make sense of what customers are saying.

So, yes, you can never manage what you can’t measure. But now it’s possible to measure so much you can’t manage. 

As the managing principal of Third Idea Consulting, a company dedicated to helping businesses handle the social explosion, Marshall Lager is no stranger to analysis. Contact him at marshall@3rd-idea.com, or on Twitter via @Lager.

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