What are the right metrics to track the success of a CRM initiative? I just updated my report on this topic for 2011. The report illustrates over 70 different metrics and describes how to link them to business strategies and tactics.
What’s new in the report? My clients are incorporating new measures into their portfolio. In addition to traditional operational metrics, they are adding externally focused customer perception metrics. In particular, I see a rise in adoption of voice of the customer (VoC) metrics and “social metrics”:
- VoC programs are now widespread. 63% of large North American companies have established companywide customer feedback metrics; nearly as many have built structured VoC programs. Despite widespread collection of customer feedback, only 30% of firms systematically incorporate insights about customer needs into their decision-making processes. Examples of VOC metrics include customer satisfaction level, Net Promoter Score (NPS), and brand preference.
- Social technologies are proliferating rapidly. The social web phenomenon, which Forrester calls Social Computing, forces organizations to expand their thinking about CRM beyond optimizing a two-way relationship between enterprises and customers to include simultaneous interactions and conversations that customers have among themselves. All of the places where these conversations continue to grow — blogs; wikis; forums; rating and review sites like Yelp; social networking sites like Facebook; social media and user-generated content sites like Twitter and YouTube; and platforms like Jive Software and Lithium Technologies that support public and private customer communities — are potential rich sources of information about customer sentiment toward your brand that you should monitor and act upon. Examples of social metrics include sentiment, influence, and share of voice.
What is the goal of your CRM initiative? Is it to increase revenue per sales rep, increase average order size, decrease customer acquisition costs, improve customer retention, or decrease service response times? The process of defining a value-based CRM plan starts with linking the highest-level corporate business goals to a clear set of specific CRM strategies and tactics. Align CRM metrics with the business outcomes you are trying to accomplish so that you can track progress toward those goals.
I am very interested in hearing about the CRM metrics that you are using. What the metrics you have found most useful?
Check out the full report on the Forrester site.