All of these scenarios are real. In the first one, the call center agent's success is measured based on the number of calls he can deal with without passing the call on to a supervisor. The agent's been so indoctrinated that escalation is bad that he keeps the customer on the line even when he has no way of helping him. That call's going to end badly for all involved. Now, what was the goal of having the call center in the first place? Greater customer satisfaction. The metric applied is designed to minimize call center costs; its use results in the goal not being met.
Example 2 is a classic: sales' definition of a qualified lead and marketing's definition are at odds, so there's really no way that marketing can satisfy sales' needs. Instead of clearing up this misalignment, marketing sets out a quantity metric: if we get more leads, then just as a matter of percentages we'll get more leads that sales will like. Sadly, that approach just gives sales more chaff to wade through - and in this economy, who has time for that? The original goal was to deliver more qualified leads to sales; the metric of lead quantity does not measure marketing's success in doing so.
Example three exemplifies why CRM is perceived as a failure in many cases. A loyalty program is targeted at keeping existing profitable customers, not at attracting droves of new ones. However, all too many executives still view CRM as a panacea to all a company's sales woes. In this case, the CEO failed to understand that the success of the company's loyalty program is measured in greater loyalty, not in new customer acquisition. The data that comes out of CRM has to be employed in alignment with the goals of the company - and if those goals are uncertain from the start there's no way CRM will succeed. If a company's focus swings wildly from loyalty to new customer acquisition and back, and the resources aren't there to manage multiple efforts across the scope of these activities, in too many cases CRM is judged a failure. And it ain't so.
When buyers ask about the first thing they should do when looking for a CRM solution, I always tell them to examine their own businesses first. That's not always what they want to hear - they want to know what to buy, how to install it and when the money will start rolling in. But without goals you can't use any technology properly. In CRM's case, if you don't understand your goals from the outset, all you're going to end up doing is making the same errors you've made in the past, only faster. And once you do have those goals in place, the only way you'll know if you're meeting them is to pick the right metrics.
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