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Customer Relationship Management

Notes adopt, but also helps front-line employees and managers perform regular tasks. Often, this is
the predominant focus for CRM measurement systems.

Example: For those businesses with call centres, managers frequently run reports from
the call centre technology systems, such as Automatic Call Distribution (ACD) systems, on how
well the call centre is performing and if customers are being serviced at the prescribed level.
If managers see problems with performance, those problems can be diagnosed and resolved.
Since a company interacts with customers through a variety of different business units in a
variety of methods, each business unit measures customers very differently. The way a brand
manager measures its customer-facing activities is very different from the way the field service
staff may measure its customer-facing activities. It is this different way of “touching the elephant”
that contributes to a company’s inability to deliver on the promise of CRM systems. Given the
diverse nature of these measurement frameworks, it is not surprising that CRM practitioners
are often skilled in one measurement framework and unaware of the issues, complexities and
importance of the other frameworks.
Specific measures in each of these measurement frameworks can be focused internally towards
company employees and productive processes that generate and deliver products and services
or externally towards customers and their behaviour.

Example: A call centre frequently measures the cost per call as a measure of economic
productivity. This is an internally focused measure. Call centres frequently survey customers to
determine the level of customer satisfaction.
What makes CRM measurement difficult is that the measurement problem is not confined to
just measuring customer behaviour and mindset. Instead, businesses need to measure activities
that occur inside the company, too. CRM measurement also sometimes goes beyond measuring
those activities that directly touch the customer (value delivering capabilities). Companies
frequently 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.
When it comes to coordinating customer-facing activities, the level of interconnectedness within
companies and within value chains can be surprisingly high. In the retail Consumer Packaged
Goods (CPG) industry, when a grocery store chain changes its consumer promotion schedules,
at least seven groups within a CPG firm are impacted: sales, marketing, trade promotions,
warehouse, transportation, manufacturing and finance (Rubin, 2001). Rubin reports the lack of
coordination costs manufacturers $100,000 in lost revenue per promotion. Collaborative supply
chain tools, planning, forecasting and replenishment applications, address these issues and all
are heavily dependent on customer insight capabilities within each company in the value chain
to work.
When CRM measurement is looked at in this way, one can get the impression that CRM is too
wide of a discipline and a technology set since it encompasses nearly every aspect of a company.
While this is true, that is because companies exist to sell to and serve customers and it is natural
that a wide set of measurements would need to be managed. Companies also have to manage all
sorts of measures and measurement frameworks that customers are typically not interested in,
such as stock price volatility, bank financing interest rates, overall accounts receivables, day’s
sales outstanding and so on. So where does CRM measurement begins and end? One way to

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