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Don't Get Trapped

At about the same time that Tata announced that one subsidiary would be acquiring Jaguar and Land Rover from Ford another Tata subsidiary was announcing the results of a study measuring CRM program effectiveness. To be frank, I hope they do better with the luxury cars because the study results feel a little embarrassing to me. What is most disappointing is that the evaluation focused on metrics such as finishing projects and on time and on budget as a measure of success. Even back in the 80’s we were looking for more than that from project evaluations.

So, what should we be measuring? I think there are four levels of metrics, which include project level measurements such as completing on time, but go beyond into three more advanced categories. By the way, it is not bad to measure projects at the project level – it is useful to monitor how well projects are being managed. It is just not sufficient.

A second level of measurement for technology-based CRM projects is to measure whether the technology is functioning correctly. When it is not working as expected, it needs to be adjusted. If it is working as expected, but there are still issues with performance, then you need to look at the next level of measurement.

I think a focus on capabilities, the third level of measurement, is probably the most critical for CRM projects. CRM is all about building more effective customer-facing capabilities, such as campaign management, lead management, account management, and service delivery. If your CRM program is not actually achieving more effective customer facing results, such as campaign lift, close rate, penetration, and service quality, then it is truly not making the mark. It does not matter too much if the campaign automation implementation was completed on time if ultimately it does not improve lift.

Then of course there is always the fourth level of success, actual business outcomes that justify the investment. We do want to improve revenue, efficiency or customer satisfaction and it is important to monitor this level as well. However, it is not always easy to make a solid connection between CRM program investments and business outcomes, primarily because of all the variables that are hard to rule out. Not impossible, but it is hard. This is why I place my emphasis on the third level.

If you do improve the performance of your customer facing functions, you are more than likely going to see bottom line results. If you don’t see the improvement, any bottom line change is pretty much going to be due to some other reason, not your CRM program. Therefore I place the biggest emphasis here.

By the way, just because your CRM project takes longer than expected, it may not be that you have a problem with anything other than your time estimation skills. It is far more important to build capabilities than be finished on time. If you have to take one over the other, go for the capabilities (although I have had clients that believed being on time was more important than actually building the needed CRM requirements.). Sometimes a focus on good project management takes a priority over good business results. Better not to get caught in this trap.


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