Page 288 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Unit 11: CRM Measurements

The term field here is defined as those customer-facing and customer-impacting activities to be Notes
measured that can include processes within the company, among its suppliers and certainly
with its customers. Each of these vectors competes with each other for management funding and
attention. Field breadth refers to how much of the total set of activities needed to be measured
are actually measured.
Are all customer segments, product categories, business processes measured? Field depth refers
to how granular is the measurement approach. Systemic? At the customer segment level? At the
customer level? How far are sub-attributes broken down? How frequently is data measured?
Field tractability refers to how explainable and provable is the CRM measurement framework
employed.
With these attributes in mind, here are the principles companies should consider for establishing
the proper measurement framework:

1. The measurement framework designed must cover the field width, depth and tractability
in a cost effective manner that meets the company’s strategic goals. Tradeoffs between
these vectors will ensue to address the cost of measurement and applicability to meeting
strategic goals.
2. The measurement framework designed must consider the level of stability or complexity
within the market or within the enterprise. The more complex and volatile the market, the
more adaptive and timely the measurement framework needs to be.

3. The measurement framework needs to be able to function with partial and incomplete
measures. It is impossible for companies to measure everything at once. A starting point
must be had. One can be determined by restricting any combination of field breadth,
depth and tractability.
4. For highly complex markets, the measurement framework itself will evolve, perhaps
rapidly. The measurement framework needs to be either self adapting or measured in
some way (meta-measurement) so that it can be reconstituted as needed. This requires a
different knowledge management approach and organizational model than most
companies possess. Analogies from the complexity sciences provide some future directions
for thinking about adaptable measurement systems.

11.5.1 Building a Composite Measurement Framework

If they haven’t done so already, most companies will need to build composite CRM measurement
frameworks to get the optimal combination of measurement breadth, depth and tractability.
Measurement frameworks are not a one-size-fits-all proposition. They need to be tailored for
the company and its conditions. With the abundance of measurement approaches and lack of a
comprehensive theory of customer behaviour to guide them, companies will be designing
frameworks themselves. Based on the issues discussed so far, here is an approach to consider.
Consider the planning time horizon, competitive market stability or volatility and other market
of company factors.

1. Are current market conditions stable or chaotic with rapid unpredictable change?
2. What is the company’s current competitive posture? Is the company attempting to shape
the market significantly, adapt as a fast follower to the market, or sitting it out for a while
and doing nothing?
3. What is the balance of focus needed between measuring internal capabilities and measuring
customer behaviour?

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