Let me ask you one question: Do you have a CRM evaluation method or a full set of measurement metrics to judge how good (or bad) your CRM initiative is?
Most business leaders would answer, "No," despite the fact that it doesn’t make sense not to measure when you spend huge resources, both monetary and in labor, on any customer relationship management initiative. No matter how you name it—focusing on the customer, on customer service, on being customer-centric, on customer experience management—is crucial to all enterprises around the globe.
It’s important to have an objective and scientific approach to judge how good your CRM initiative is. Since 2002, our Best CRM Practice Awards has adopted CRMBodyCheck as its set of evaluation criteria. It was developed by Global CEM’s 24 global advisors, after three years of field experience and fine-tuning.
Key to CRM success
There are numerous factors determining the success or failure of customer relationship management. One of the most critical and fundamental elements is "implementation sequence." Once you’ve bought or built your technology, you try to build the process complementing it, then recruit people who can manage it and, finally, devise a strategy to wrap it all in. At the end of the day, you realize that you don’t recognize your customer enough, and customer strategy is something you never think of. It was the most classic and popular approach—and one that led to a high project failure rate (reportedly as high as 70 percent, according to some researchers).
At Global CEM, we have a different thought about the implementation sequence. Instead of starting with technology, you start from a base of understanding your customer. You formulate your customer strategy based on your customer needs, which gives you a solid ground on your CRM strategy. You can derive the type of people you need and you hire them, train them, motivate them and retain them in line with your overall strategy. Process can be built on a logical and practical ground following this customer-centric approach. In such an approach, the final step is to determine your technology support by choosing an appropriate software or tool that can fulfill the needs, as assessed on the basis of your customer strategy. Proper implementation sequence is the foundation to CRM success.
CRMBodyCheck: 17 measurement metrics
CRMBodyCheck (see Figure 1) consists of a full set of measurement metrics based not only on technology but also on customer, strategy, people and process. They are the following:
- LIVE Customer. Loyalty, Intelligence, Value, Experience
VSOP Strategy. Vision, Strategies, Objectives and Performance Metrics
CEO People. Change Management, Employee Buy-in, Organizational Structure
IPO Process. Information Flow, Process Design, Organizational Alignment
RISE Technology. Requirements Mapping, Integration and Compatibility, Selection of Vendor and Evaluation
Not all measurement metrics carry the same weight. To allocate the proper weighting, we have had our 24 global advisors summarize their collaborative intelligence. The customer sector carries the heaviest weight, accounting for 31 percent of the total value. Strategy and people each come in second, with 22 percent. And process accounts for 15 percent, with technology at 11 percent (see Figure 2).
In individual metrics, employee buy-in scores the highest, with 8.4 percent of the total, with customer experience (8.22 percent), customer value (8.09 percent) and change management (8.08 percent) following. All four metrics fall in the "customer" and "people" sectors. Comparatively speaking, the least important ones are evaluation, selection of vendors, Integration and compatibility and requirements mapping. They all belong to "technology" sector.
Technology and process have been—and to some enterprises, are still regarded as—the biggest priorities in CRM projects. However, based on the weighting of our 24 Global CEM global advisors, the key factors affecting the degree of success or failure of CRM initiatives are not in technology and process but, rather, in customer, strategy and people.
Interesting, isn’t it? Where does the truth lie? Only with an objective and scientific approach can you answer that—and judge how good (or bad) your CRM initiative is.