Page 285 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes This makes it difficult to pull the data together. Davenport distinguished between several types
of customer knowledge:
1. Quantitative, data-driven knowledge found in transactional systems

2. Knowledge derived from interactions with people including: experiential observations,
comments, lessons learned, qualitative facts, etc.
3. Tacit knowledge which is unstructured and difficult to express and must be converted to
explicit knowledge
When it comes to customer knowledge, companies can (and a few do) measure three aspects of
customer knowledge:

1. The value customer knowledge has (intangible asset measurement)
2. The process by which it is produced and consumed (knowledge management operations)
3. The quality of the knowledge or data (data quality)

An approach to measuring knowledge involves measuring the flow of communications between
people (Krebs, 1998). “An organization’s data is found in its computer systems, but a company’s
intelligence is found in its biological and social systems,” he argues. Kreb’s approach involves
using surveys and observation to uncover the formal and informal communication links between
people and groups within a company to uncover the social links within and across the boundaries
of the organization. Link frequency is scored and visually depicted in a network diagram that
clearly shows the nature of the linkages.

Knowledge is externally derived in this scheme in the perceive and adjust phase and is internally
generated within the plan and adjust phases. Knowledge within this flow is communicated and
retained. One “knowledge turnover” is the completion of one perceive->plan->act->adjust cycle.
This measurement schemes quantifies the collection and use of knowledge without regard to its
inherent value. However, as measurements of actions based on knowledge collect data, the
indirect or direct value of the knowledge can be derived.

Self Assessment

Fill in the blanks:
1. A leading indicating measurement is a predictor of ………………… financial performance.

2. …………………… are internal and external indications of accomplishment.
3. CRM measurement is …………………… in nature.
4. Influencing decision making is one of the …………………… of CRM measurement.
5. CRM measurement calculates …………………… activities/behaviour.

11.4 Implementing CRM Measurement

When customer behaviour is fluid due to a dynamic and changing market, existing tools designed
to find significant patterns of customer behaviour cannot be calibrated on old data or assumptions.
The tools must evolve as the market evolves.
A company’s ability to perceive the market must be as fluid as its ability to adapt to or shape the
market. In complex, dynamic markets, it is quite conceivable that known causal linkages between
layers within a company’s working theories of customer or market behaviour can be invalid or
worse still, be correct but irrelevant. When it comes to measuring something as dynamic as
customers, most measurement frameworks need continual reassessment and recalibration.

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