Why Metrics Matter

Metrics (you may prefer to say statistics or reports) matter because good information about the business allows you to make good decisions. Getting better information about customers is often one of the reasons why companies are interested in implementing a CRM tool in the first place. This benefit can only be realized if you plan for metrics along the way so that the tool captures the right data and you can extract it in ways that are meaningful for managers and executives within the organization. Metrics are also critical in measuring the success of the CRM project itself. As discussed earlier in the tutorial, you want to define measurable goals for the project as you start it. For instance, you may decide to cut the average sales cycle from 3 months to 2.5 months. Or you may want to decrease the average effort time per support case from 30 minutes to 25. A measurable goal has both a baseline measurement (the three-month average cycle or the 30-minute average effort time) and a target for improvement (cut .5 months off the sales cycle, or 5 minutes off the effort time per case). Sometime it is difficult to establish a baseline since the data required to create it is not tracked in the first place, and indeed the lack of tracking could be one of the main justifications for the CRM project as a whole. You can make an educated guess, or you may want to set up a short-term measurement project to get a good baseline. You could ask the sales reps to recall when they started working on deals they closed this month, or ask the support reps to track their time manually for a few days. A quick and dirty estimate is useful, even if you know it's not completely reliable. Targeting ambitious but realistic improvements isn't easy either. It is best approached by breaking down each task into smaller components and estimating improvements for each component. For instance, you can break down the sales cycle into the initial assessment, planning, sales calls, creating proposals, etc., and define the impact of the new tool on each phase. Despite the genuine difficulties of setting meaningful and reasonable quantitative objectives, it's essential to define measurable goals, for without them the success of the CRM project will always be open to questions and doubt.

Didn't We Talk About ROI Already?

Yes, we did. We talked about creating an ROI analysis as part of making a CRM purchase in . ROI analyses include many of the same techniques used when creating metrics, in particular in the areas of cost containment and efficiency, and this chapter may be useful to you as you prepare the ROI analysis. However, metrics go well beyond ROI considerations as they include topics other than cost, revenue, and profit. This chapter discusses both how to measure the success of the CRM project itself and how to use the CRM tools to measure the health of the business in the short term and the long term. It shows how to make reasonable choices in defining and implementing metrics so that you get the right information for a minimum amount of effort and cost. It concludes with many examples of metrics you can use to create your own set.