| By Pam Baker
Measuring the Wrong Customer Metrics Impedes High Impact Progress
Not all CRM analytics measures and performance indicators are created equal, meaning not all of them are terribly useful. The challenge is in being able to tell which customer analytics will spur your company forward and which will leave you groping for profits in the dark.
"While traditional customer metrics, like average handle time and abandon rate are still commonly used throughout the call center and customer service industries, forward thinking companies are working toward balancing these operational results with contextual behavior analysis, ultimately, with an eye on business outcomes," says Mariano Tan, senior vice president of Professional Services at TeleTech, a customer relationship management company.
"Organizations that continue to exclusively pursue core operational metrics will likely never elevate customer satisfaction or win customer brand ambassadors," he added. Prioritizing the highest impact performance metrics enables management to achieve the most strategic goals in the shortest time.
Dire words indeed in today's economically challenging climate. Obviously, changes in your CRM analytics are necessary, but be forewarned. You may not be able to find the analytics you need conveniently packaged in out-of-the-box (OOTB) CRM programs. Expect to add a third party business intelligence (BI) tool or do some customizing.
"There are gaps in current CRM analytics available out-of-the-box even from major vendors," warns L. N. Balaji, president of US Operations at ITC Infotech. "For example, the same loyalty system cannot fit all and that is why Out-of-the-Box analytics solutions need heavy customization. At times they almost need complete rewriting because analytics systems depend on an organization's data classifications and maturity level."
In the interest of perfecting your processes and increasing your profits, here are five low value CRM analytics that you should re-evaluate, pull, plug, customize, extend or consider eliminating.
Analytics programs with missing integration points and critical functions. "Loyalty, Marketing, Sales, including point-of-sale (PoS), and Call Center/Customer Feedback Systems are usually missing from out-of-the-box CRM analytics and need to be acquired separately or developed from scratch, says Balaji. "Integration of multi-touchpoint business scenarios is fairly complicated to handle with out-of-the-box packages."
The following features are missing in most of out-of-the-box CRM analytics packages, according to Balaji:
» Exception Reporting
» Alerts and Notifications
» Guided Analytics
» Linked Reports
» Leading and Lagging KPI usage
» Threshold based flagging and reporting
» Storyline based report usage
» Predictive Analytics
» Pre-Built Data Mining models
Analytics leading to departmental, silo'd or tactical reporting. Too few business intelligence or CRM analytics tools possess the structure to directly align performance measures across business units and with the company's top business objectives. "Business Alignment is completely missing, leading to confusion among the users," says Balaji. You'll get lots of numbers and summaries with this, but such will only deliver piecemeal information, tell you what you already know, or give you meaningless data.
AHT (Average Handle Time) is still a staple of many call center reports. "It is a one dimensional measure which takes no account of outcome, be it sale or satisfaction," says Mitch Lieberman, Sword Ciboodles' Product Strategist. "It should always be part of a formula that represents cost versus value—essentially the ROI of each and every contact." As contact centers become smarter and more efficient, they can and should take time to actually listen to what their customers have to say. "Unfortunately, efficiencies are grabbed by the operational report readers and the ability to connect with customers at a human level is lost," he said.
Email open vs click-thru rates. Marketers still tend to believe that 'email open versus click through' rates are accurate indicators of campaign success. But that's simply not true anymore. "Most modern email systems block the required messaging, ore read-receipts, and we're seeing less and less useful data being generated for email campaigns," says Lieberman. Instead, more sophisticated campaign metrics available in part from lead management systems deliver more useful metrics.
"How did you hear about us" polling. The answer to this question is more likely to reveal which media source is top-of-mind and on the tip of your customer's tongue than it is to tell you which marketing channel is actually working for you. "Better to track visits, referrals and the like directly, or get smarter with how links and phone numbers are published so that the response rate can be accurately measured, i.e. unique links or discount codes for given channels," advises Lieberman. "Add to this NPS (Net Promoter Score) which is often a misused and misunderstood statistic."
But don't stop with these five problematic or less than useful analytics. Look hard at all your analytical measures and determine if the information you're getting is truly impacting your business results.
"People configuring CRM software should understand that it's not the tool, but how you use it," says Adrian Sanders, CEO and Chief Value Migration Architect at VM Associates, a cloud-based business development consulting firm. "All CRM philosophies and metrics are the 'best' provided you apply them to the appropriate business objectives."
"The best approach is to start with the business objectives THEN find the software solution," he added.
Categories: CRM Analytics
Tags: business intelligence, BI
Author: Pam Baker
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||I have been a follower and believer in NPS almost since it was developed by Fred Reichheld and Bain & Company. Simplicity is brilliant and the simple question of "How likely are you to recommend?" shares volumes and proves valuable metrics need not necessarily be complex. This particular customer metric is the most widely accepted measure among businesses. In a recent Satmetrix Customer Experience Industry survey NPS was confirmed as a key customer satisfaction and loyalty measure for 69% of more than 1000 companies surveyed. NPS is now looking to expand with the rise of social media and volumes of unstructured data. I'm hopeful this evolution will add to this metric without voiding its simple and valuable underlying premise.