Measurement
How is success or failure determined?
19/01/10 17:39
Although there are multiple methods for determining success or failure with your CRM implementation the two best are (1) Increase in Revenue and (2) Increase in productivity. Although the first is fairly easy to track the second has always been difficult to not only track but to score.
Although their have been multiple studies done by Gartner Group and other organizations that track CRM implementations a relative modest 10% improvement in productivity is a fairly easy and acceptable number to set for any CRM implementation. Once you have determined the percent of productivity improvement it is then easy to set a revenue increase based on the productivity improvement.
Tracking these numbers is easier described then accomplished. To determine the increase you need to be able to set a base line to measure both of them against and without the starting base line how do you determine success or failure.
Although their have been multiple studies done by Gartner Group and other organizations that track CRM implementations a relative modest 10% improvement in productivity is a fairly easy and acceptable number to set for any CRM implementation. Once you have determined the percent of productivity improvement it is then easy to set a revenue increase based on the productivity improvement.
Tracking these numbers is easier described then accomplished. To determine the increase you need to be able to set a base line to measure both of them against and without the starting base line how do you determine success or failure.
Do you need a success matrix?
07/01/10 17:37
Without a success matrix it is impossible to measure the success or failure of any CRM implementation. Many organizations can tell you their close ratios, the number of calls the revenue producers are making and other sales related data. What the management is unable in most cases to tell you is simply; are their people working at maximum efficiency and what is defined as maximum efficiency.
As part of a CRM project it is important to gather as much intelligence on the revenue producer’s activities and their management and support staffs. Once this data is collected a matrix for success can and should be determined to set the percent of improvement the company is attempting to achieve with its CRM implementation. You need to look at a lot of different elements and cross correlate them.
An example is number of phone calls to in person meetings, close ratio to proposals, suspect to prospect ratios and other sales related data including time periods for all the items. Start and end times for each phase of the process are as important as any other data. Most organizations find when they begin collecting the data that much of it is missing and may need to part of the CRM system design so the data can be collected to build a success matrix.
As part of a CRM project it is important to gather as much intelligence on the revenue producer’s activities and their management and support staffs. Once this data is collected a matrix for success can and should be determined to set the percent of improvement the company is attempting to achieve with its CRM implementation. You need to look at a lot of different elements and cross correlate them.
An example is number of phone calls to in person meetings, close ratio to proposals, suspect to prospect ratios and other sales related data including time periods for all the items. Start and end times for each phase of the process are as important as any other data. Most organizations find when they begin collecting the data that much of it is missing and may need to part of the CRM system design so the data can be collected to build a success matrix.
When can I reasonably begin measuring?
04/01/10 18:19
Depending on the quality of the data the organization has to begin with you can tier the measurements for success. It will take 3 – 6 months for the staff once you have implemented the system to be proficient with it.
Any attempt to measure success during this time period is difficult and could be considered dangerous to the overall health of the project and staff to start too soon. You will need a good solid 6 months to a year worth of data to compare with your original data to determine the success or failure of the project.
Also you will need the willingness to modify the application and your measurement standards to insure success with the project. One of the issues we have seen is a management team that thinks it fully understands its market and what its representative are doing only to find out they were doing something totally different. I once remember a manager who wanted to change a feature in their sales process which we thought was incorrect.
After being told they new their system and we were wrong they came back to us about 30 days later and advised us to not make the change they had requested. It seems that once they began checking with the mid level management team they discovered we were correct. You need to be willing to make changes to the system and your measurement metrics as both the system matures and your market changes.
Any attempt to measure success during this time period is difficult and could be considered dangerous to the overall health of the project and staff to start too soon. You will need a good solid 6 months to a year worth of data to compare with your original data to determine the success or failure of the project.
Also you will need the willingness to modify the application and your measurement standards to insure success with the project. One of the issues we have seen is a management team that thinks it fully understands its market and what its representative are doing only to find out they were doing something totally different. I once remember a manager who wanted to change a feature in their sales process which we thought was incorrect.
After being told they new their system and we were wrong they came back to us about 30 days later and advised us to not make the change they had requested. It seems that once they began checking with the mid level management team they discovered we were correct. You need to be willing to make changes to the system and your measurement metrics as both the system matures and your market changes.
Measuring CRM success?
28/12/09 07:17
How do you actually measure success?
You measure success in several ways. We have already discussed a couple of measurements, one being increase in revenue The other increase in productivity is more difficult to measure. What actually makes up the increase in productivity number? Let’s look at some of the elements you can track to determine if you are measuring the productivity number successfully.
Accounts Managed: If under your current plan a representative is managing 400 accounts, you would expect them to be able to manage an addition 40 accounts on average across your organization.
Weekly Meetings: If your average weekly meetings across your organization are 2 per rep, you would expect that to increase to 3 a week.
Close Ratio: If your average close ratio is 4 per ten proposals, you would expect that to increase to 4.4 per 10 proposals.
Don’t Forget Soft Measures: The above are some of the tangible targets you can set for measuring the success or failure of the project. Some of the other measures of success are softer than the above measurements but may be more critical to your organization:
You measure success in several ways. We have already discussed a couple of measurements, one being increase in revenue The other increase in productivity is more difficult to measure. What actually makes up the increase in productivity number? Let’s look at some of the elements you can track to determine if you are measuring the productivity number successfully.
Accounts Managed: If under your current plan a representative is managing 400 accounts, you would expect them to be able to manage an addition 40 accounts on average across your organization.
Weekly Meetings: If your average weekly meetings across your organization are 2 per rep, you would expect that to increase to 3 a week.
Close Ratio: If your average close ratio is 4 per ten proposals, you would expect that to increase to 4.4 per 10 proposals.
Don’t Forget Soft Measures: The above are some of the tangible targets you can set for measuring the success or failure of the project. Some of the other measures of success are softer than the above measurements but may be more critical to your organization:
- Provide more information on the individual performance of the representative.
- Allow the management team to concentrate on the problems instead of general broad brush management techniques.
- Reduce turn over: This one may be the most important of any, the cost and lost productivity of turn over are always hard to measure but just in lost opportunity costs it is an important matrix. If you can reduce your turn over ratio, it impacts customer retention, improves revenue, reduces cost and a whole host of other intangible items.
- Reduce the amount of the time a new representative takes to become productive in his territory.