Page 268 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Unit 11: CRM Measurements

activities that directly touch the customer (value delivering capabilities). Companies frequently Notes
need to measure specific attributes about how a product or service is produced (value production
capabilities), especially if the product or service is customized for the customer. Value production
capabilities extend through to suppliers and partners. Hence CRM measurement may also involve
supply chain management activities. In fact, supply chain management, as a discipline, exists to
better deliver value to customers and therefore is often a key component in CRM activities.
Many businesses have bought technology solutions at a rate faster than those solutions can
deliver real value. While the reasons for this are varied, the ability to properly measure customer-
facing activity is obviously crucial for successfully managing CRM programs. To complicate
matters further, measuring customer-facing activity is one of the most complex and varied
measurement endeavours businesses can undertake. The area of study is relatively new and
undergoing significant change as new technologies are beginning to blur the lines of distinction
between information channels. Customers are interacting with businesses across far more
information channels than they did 25 years ago. More and more activity is being pushed to
interactive, real-time digital information channels, providing businesses with unprecedented
potential for observing and measuring customers in new ways.
The way businesses have been traditionally organized, along functional and product lines, may
be insufficient to take full advantage of the apparent and latent opportunities in measuring
customer activity. Many companies are seeking to shift the central focus of corporate activity
away from products and on to customers or at the very least to learn new ways of managing
customer-facing activities. To effect this change, businesses will need to build out new, more
robust measurement systems, replacing or standing alongside existing product oriented
measurement systems. Designing and managing these measurement systems and the CRM
technologies around them requires new combinations of skills and roles, for which many
companies have not planned.
Change begins with knowing. In order to successfully build out these new customer-oriented
capabilities, companies will need to build out new ways of knowing customers.

11.1 Objectives for CRM Measurement

There are three main purposes for CRM measurement: to influence or validate decision making,
to guide ongoing activities or tactics, and to predict future states.

11.1.1 Influencing Decision-making

Companies implement CRM measurement very differently based on their internal decision
making styles. As companies make decisions about customer strategies, they look to customer
measurement to help influence specific decision makers or the decision making process or
validate initial ideas about how to manage customer relationships.

Many companies frequently adopt more than one style. The styles adopted, consciously or not,
shape how the company will measure customer activity. The company’s business model,
approach to the market and history of measuring customers also influences which of the
measurement styles seem more appropriate or expedient for the company.

11.1.2 Guiding Ongoing Activities

CRM measurement frameworks are not only used to help managers collectively formulate
plans and make decisions, but they are also used to inform and guide ongoing daily activities
related to customers. This is related to but somewhat different from influencing decision-making.
Measuring customer activities not only helps companies decide which customer strategies to

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