William Band on defining metrics and building a CRM metrics strategy

In this installment of the SearchCRM.com CRM Metrics video series, William Band, principal analyst at Forrester Research, shares his thoughts on how an organization can determine the right metrics and find a balance between operational and internal metrics. He also discusses the ideal time to start thinking about metrics in a CRM initiative, how to find the proper total number of metrics and balance business and IT skills in a project.

---

Read the full text transcript from this video below. Please note the full transcript is for reference only and may include limited inaccuracies. To suggest a transcript correction, contact editor@searchsecurity.com.   

William Band on defining metrics and building a CRM metrics strategy

SearchCRM.com: Are people having trouble coming up with the metric that they're
interested in? Are they having trouble kind of finding out things like
cross-sell and up-sell opportunities because their data doesn't have order,
or kind of where is the?

William Band: Yeah, so I think that there's two levels. What I have been talking
about is, first of all, they're not quite sure what a metric is or what
metric they ought to even be thinking about tracking. That's why we
have this kind of laundry list, to get as idea starters. So, they actually
are confused about what we should be measuring in the first place,
and then once they do that, then there's a whole sort of questions about
how would we define that particular metric? It's one thing to say we want to
improve our cross-sell or up-sell ratio so how do you define cross-sell and
up-sell ratio in this company?

How would we get the data to be able to determine whether something
is changing? How would that data be presented to somebody who is
going to do something with it? So there's a bunch of subsidiary questions.
But the first one is that they typically are not sure as to even what kind of
a relevant metric, and they ask us, well, what are other people measuring?
You wouldn't want to measure every possible metric, you'd only want to.

SearchCRM.com: Right, is there a kind of a set number or a range?

William Band: Yeah, well, I kind of advocate what I would call a balanced
score card for CRM in that sense that I don't think that the number is one.
I think that, for example, some people are focused on, well, we'll have an
MPF score or even a Forrester Customer Experience Index score and say
that that's it, but I think that you need to think around customer perception
as well as customer operational metrics, and do a lot of deep thinking about
maybe, a half-dozen or something like that that kind of cross different elements
of the domain that you are trying to care about. I wouldn't have 40.

SearchCRM.com: Right, OK, have you seen customers that have done that?

William Band: Well yeah, I mean, particularly again back to customer
service and some operational areas. Some things are easier to measure
so some people get really crazy about, if you can measure it they start to
measure it even though it may not be important, and they might have lots
of measures but they may not be relevant. So to me it's having a smaller number,
but important.

SearchCRM.com: And sort of at what point in the process are people generally
coming or when do you advise them to come in with metrics? Are they buying
a system and then identifying a business problem and then the metrics and
then the software?

William Band: So what we say, what we advise them to do and what they
do are two different things.

SearchCRM.com: Right.

William Band: So the ideal scenario is that you're going to have done your
strategy, figured out what it is that, what business outcomes you are trying
to drive, you're going to relate those to some metrics, and that you do some work
about not only what they are but you can get the data together and you do
a baseline. And then you're going to implement some kind of initiative and be
tracking whether or not you have improvement. The reality is that many times
we work with clients and they come to us, and they've done something already
and they don't have any metrics. So then it's very hard to go back and create
baselines, but, at least, you can at that point go back and rethink the metrics
and track as you go forward. But I mean we would definitely recommend
strategy, metrics, and then implementation, but the real world isn't always
as clean as that.

SearchCRM.com: Yeah.

William Band: I think that we are really seeing that is coming on strong is
this whole voice of the customer trend, and with that, that's kind of companies
have always had some mechanisms by which they would collect information
from their customers about how the customer perceives them, and they would
do that through periodic surveys, customer satisfaction surveys and then
more recently maybe post transaction. If you go on a website, they'd send
you a…how did you feel about this web interaction or if you get on the phone,
there's more software available that'll allow the customer immediately to be
asked how satisfied they were.

With the advent of social though, there's a lot more appetite or desire to
try to figure out what customers think about brands, and then with the
social sentiment platforms that are available that's come on stream. So
this is all kind of coalescing into companies wanting in formalized and more
broad-based outreach to collect data from a bunch of different sources
about how their brands are perceived, but then to bring that back into
operational situations so that you can do something about it. So voice
of the customer as a kind of trend in the market is pretty hot amongst our
customers now. And that's again only around the metrics of brand perception,
that's not really the more operational side.

SearchCRM.com: Generally, do you need a bunch of math people in your
department? Is it the business people or the IT people that are trying to establish
and track and…

William Band: Yeah, I think you need a combination of both business
and IT for a couple of reasons. One is that usually it's the business people
that have the acumen to be able to work through what business outcomes
are we trying to achieve. Often you can't measure directly what it is you
want the CRM initiative to drive more revenue.

SearchCRM.com: Right.

William Band: For example, you can measure that but you'll probably want
to develop subsidiary metrics or things that we expect if these metrics improve
then revenue will improve. So business people can help figure that out. But
what they often don't know is how would we get the data? And how would we
do the calculation, literally? And so you need IT folks to help you with that
regard, and so that's usually the team that I see doing this kind of stuff. And
then that relates to arguments of automated dashboards and maybe get the
IT business analytics reporting people involved.

SearchCRM.com: Well great, thanks very much.

William Band: All right. Good.