Get Your Facts Straight
magazine: What is the number one data issue right now, and how are companies handling it and turning it into a positive?
But the most compelling issue, as it relates to data, is just the vast amount of data that's out there. [Organizations should] really follow a four-step process: You want to first define the information that's going to be critical to achieving your business objectives. Then you want to find a way to integrate that information. Third is providing employees the opportunity to view and analyze that information in a meaningful way in their daily work lives. But the most fundamental issue is changing your business processes to transform how you act upon that information, and how you act differently with your customers.
It is a big issue out in the marketplace in general and it's not so much about trying to get more data, but it is about trying to manage the data that you already have. The volumes of data that are presented to users sometimes make it difficult to see the forest for the trees. It's also difficult to get the single version of the truth. Data duplication [is common] as a result of, typically, a diversity of different systems within an enterprise landscape, as well as data coming in from the outside. It's not often the case that you have one customer record but, often, you have many customer records from many different systems and consolidating that is key.
I think we all agree that a 360-degree understanding of customers is important. And how we've gone at that traditionally is, "OK, I have information in finance, I have information in sales, marketing, fulfillment," but, somehow, provide some visibility to that.
First of all, it's very expensive to build those integrations and those insights to these disparate systems, much less to reconcile the data. But the way going forward is to actually establish a system of record--a master customer record-- and use that operationally in all those different systems that you have across your organization. It takes some discipline, it takes some foresight, and it takes some flexibility on the part of the vendors that you're working with.
Customer data aggregation is the biggest issue that we see. A lot of companies want to, to use a golfing analogy, leave the data where it lies and to play it where it lies. But what that requires on the CRM technology is not to be the system of record that contains all the master data, but to know where it is and to be able to fetch it in real time and bring it back to the sales user or marketing user from the 17 or 50 different systems.
So I would challenge you to think about whether it makes sense for you to have a single master customer master record or whether or not it's in your best interest to leave the data where it lies, and pull it and aggregate it.
magazine: Is it important to embed analytics into the CRM process?
As marketing budgets have been constrained in the past couple of years, as we've been in a flat economy, no time has it been more important to be very metrics-and-performance driven. If you, as the VP of marketing, can't look your CEO and CFO in the eye and say, "These marketing campaigns that we're running, these marketing events, this sales training is returning this reward," as far as pipeline growth or converted deals or revenue, then you're going to be in for some very tough executive meetings.
So every bit of the marketing- and sales-planning process--from defining your go-to-market strategy, defining your value propositions, defining your campaign, allocating your budget to running those campaigns, delivering those leads to the sales force, following up, seeing the conversions, seeing the impact on the pipeline--is all big process, preceded with the budget expectations in delivering the return, delivering the converted leads, etc. The economy has forced marketing and salespeople to be less artists and more scientists as far as being very metrics-driven.
And being able to use metrics and performance measures throughout the business process flow has then become a baseline requirement.
magazine: Do companies need to conduct ROI analyses? What are the benefits?
Absolutely. It's imperative. First of all, understand clearly and document what are the pain points that are driving this project? Do I need better visibility to a sales process? Do I need to cross-sell, upsell? Measure that at whatever starting point, whether you're midproject or at the beginning of vendor evaluation, and then set the organizational goals around those objectives--and, of course, measure going forward.
I think every organization has a unique planning cycle. Those pain points change over time. You need to periodically, systemically sit down and say, OK, what are we working against at this point, with this particular project? What can we look to improve on? Again, it's all about documenting the numbers.
CRM magazine: If someone has started on their CRM initiative, is it too late to create metrics? How would they go about that?
I don't think it's too late at all. People change job positions all the time and, if you are the guy who just got hired in to be the vice president of sales or vice president of marketing, a smart strategy is to establish the baseline of how the operation is performing when you get hired into that job. So, whether it's related to the system that you implemented or whether you're tracking the limitations and constraints and challenges that you have in your business, it's a smart strategy to track the key operational metrics that define whether you succeed or fail, and then track the trending of that over time.
If you as a marketing executive can show a conversion rate bump from 4 percent to 5 percent, that's herquality--type stuff within some organizations. But you have to be able to have those baseline metrics to, a) identify how your pain points change over time, and b) show that either your performance is trending improvement or that your pain points have changed.
CRM magazine: Is there an ideal time frame in which to check your results or reset the metrics?
There certainly is, but the first thing one needs to do is to separate ROI analysis from measuring the performance of your CRM initiative.
ROI, in its purest sense, is understanding the financial benefits of an investment relative to the costs. [To analyze it,] establish what we call value trees to decompose financial performance.
So if you're trying to increase your revenue, you need to start looking at, What are the leading metrics that are relevant to achieving that objective? How many salespeople have you got? What is their close rate? What is their coverage of accounts? And further, you have to decompose it into, How many of these people have trained? How much time are they spending in front of customers?
So, it's important to set up a KPI tracking mechanism where you can track all of these metrics and understand what relates to what, because then you need to assign ownership of the metric performance at the right level. So a senior-level executive may be looking at top-line revenue, but a sales manager needs to be looking at things like close rates and coverage.
This needs to be part of your ongoing management of your CRM initiatives, and the metrics themselves need to be tracked on a monthly basis.
CRM magazine: Will CRM users' companies achieve better results because of tracking metrics?
There's a lot of good documentation out there from analysts and from management consulting companies that clearly shows that when you are tracking your metrics you're driving your focus and your energy and your resources in the right direction. If you look at successful implementations, they are the ones that either started or, after a hard start and some hard-learned lessons, tracked ROI.
Contact Editor-in-Chief Ginger Conlon at gconlon@destinationCRM.com