CRM KPIs as Potentially Very Useful Tools
Customer relationship management is becoming a popular business strategy, and the proper use of CRM KPIs or key performance indicators is one useful tool to maintain and improve CRM performance.
Customer relationship management has, in recent years, become widely recognized as an important business strategy. This basically has to do with the creation of value via obtaining, keeping, and serving highly profitable clients or customers. As can be expected, this is in most cases a multi-faceted process that can get quite complex to implement and monitor. As such, CRM KPIs or key performance indicators are often used to help managers get a grip on the various aspects of customer relationship management.
Essentially, CRM consists of various basic processes. There is what is called new acquisitions or selling existing services or products to new customers. Another is cross selling or selling additional or new products to existing or returning customers. Upselling refers to selling higher-end and more expensive services and products to existing customers. Customer retention would refer to keeping the current customer base happy and coming back for more, which is also related to customer service or support activities and processes. These different aspects of managing customer relationships are all interrelated, and no particular one should be emphasized too greatly over the others.
Keeping track of even just one of these aspects can be a real challenge, especially as the organization gets larger and the procedures get more complicated. The difficulty is compounded almost exponentially when all of the relationships between the various aspects have to be factored in, as well. Hence, it becomes of utmost importance to be able to effectively utilize some sort of tool or paradigm to manage the jumbled mess, and here is where key performance indicators may be of great utility.
KPIs represent a way to measure a very specific performance goal or objective. A KPI in its simplest form would consist of a metric, or a quantity that can be measured, and an objective, which, for instance, would be to increase, decrease, or maintain the value of the associated metric. For example, in organizations with a small customer base, a relevant KPI might include as metric the number of new acquisitions per salesman per month, with the goal of increasing this number by 50%. As another example, in organizations with a sizable but still relatively young or new customer base, a good KPI might have the metric customer satisfaction ratio, with the goal of maintaining this ratio at or above 80%. Many more examples may be given, but the idea behind the use of these indicators remains the same.
It can hence be seen that the use of CRM KPIs is by no means simple. For starters, managers would have to be able to identify the appropriate KPIs, metrics, and objectives for each aspect of the customer relationship management strategy. However, it should also be noted that putting effort into implementing a good KPI system will be well worth it. The KPI paradigm has the potential of describing CRM accurately and usefully, and can greatly aid in maintaining and improving an organization’s performance in terms of its dealings with its various customers. Such potential should not be wasted and should be considered by any CRM manager as worth pursuing.
