Measuring Customer Service Performance - CRM Metrics

Most CRM programs what I have seen are comprised of two parts:

• Processes for building relationships with customers that spell out behaviors and
sequences for those activities

• Software for creating customer data bases and reporting progress in the
sales/relationship building process with each account.

CRM has become a nice way of referring to cross-selling.

There are several flaws in the logic behind most CRM programs I have seen:

Building a relationship requires a systematic process and
management system

CRM software provides the data needed to improve your
ability to build relationships with customers

It will be easy for the salespeople to use the CRM software
and they will love it when they see how it helps them sell more.

To Measure CRM Success

No single chart will actually tell about whether or not CRM is working or not.

What is needed is an index that is comprised of four types of metrics:

• Input metrics – measures of quality, accuracy, thoroughness, and the degree to

which data are current and verifiable

• Process metrics – measures of behavior or activity proven to link to good

performance

• Output metrics – Quantifiable things that can be counted such as orders, samples distributed, proposals submitted, new clients acquired, brochures sent, phone calls made, meetings held, accounts visited, demos conducted, etc.

• Outcome metrics – gross margin dollars, sales revenue, reduced marketing costs, partnerships with important customers

Companies have invested millions of dollars in software, training, and meetings over the years to improve their ability to build relationships with customers. What many have not done is to measure the effectiveness of their CRM efforts. A single measure of
something as complex as customer relationships is unlikely to reflect your performance.
What is needed is a Customer Relationship Index that summarizes results for four
different aspects of performance:
• Inputs
• Processes or behaviors
• Outputs
• Outcomes.

Such an index can provide executives with the data they need to monitor the progress of their company in creating and sustaining positive and profitable relationships with
important customers.